Goodyear Dunlop Tires Operations, S. A. v. Brown
Headline: Families’ overseas wrongful-death suit against foreign Goodyear subsidiaries cannot proceed in North Carolina; Court reversed and limited state courts’ power to sue foreign subsidiaries on claims unrelated to the State, protecting foreign firms.
Holding: The Court held that North Carolina cannot force foreign Goodyear subsidiaries to defend unrelated lawsuits there because their limited, occasional product sales in the State do not make them essentially at home.
- Limits state courts’ power to sue foreign subsidiaries for unrelated claims.
- Requires plaintiffs to sue where the company is essentially at home or where harm occurred.
- Sporadic product sales do not make a foreign firm subject to all-purpose state suits.
Summary
Background
Two North Carolina families sued after a bus accident outside Paris killed their 13-year-old sons, blaming a tire made by a Goodyear subsidiary in Turkey. The parents filed wrongful-death claims in Onslow County, North Carolina, naming Goodyear USA and three foreign Goodyear subsidiaries organized in Luxembourg, Turkey, and France. Goodyear USA, which has plants and regular business in North Carolina, did not contest the State’s authority. The foreign subsidiaries, which have no offices, employees, bank accounts, or registration in North Carolina, argued the state courts lacked power over them.
Reasoning
The Court considered whether North Carolina could exercise broad, all-purpose power to make the foreign subsidiaries defend suits there when the accident and the tire’s manufacture occurred abroad. The Justices explained the difference between specific power tied to the accident and general power to hear any claim. They held that merely placing some products into distribution that eventually reach the State is not enough for all-purpose power. Relying on earlier cases, the Court found the subsidiaries were not “at home” in North Carolina and that the tire at issue was never distributed there. The Court therefore reversed the North Carolina Court of Appeals’ judgment that had allowed general power based on the stream of commerce.
Real world impact
The decision limits when state courts can force foreign subsidiaries to defend lawsuits unrelated to their contacts with the State. Plaintiffs will often need to sue where the company is essentially at home or where the harm occurred. The Court also declined to reach a late argument asking it to treat all Goodyear entities as a single enterprise, a point the respondents forfeited.
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