Tuesday, June 28, 2011

SCOTUS Decides Goodyear

The Supreme Court has issued a unanimous opinion in Goodyear Dunlop Tires Operations v. Brown, rejecting the claim that general jurisdiction can be asserted over a foreign corporation whose product caused harm outside of the forum state but who also has products that reach the forum state through the stream of commerce. Here is an excerpt from the Syllabus:

Held: Petitioners were not amenable to suit in North Carolina on claims unrelated to any activity of petitioners in the forum State. Pp. 6–14.

(a) The Fourteenth Amendment ’s Due Process Clause sets the outer boundaries of a state tribunal’s authority to proceed against a defendant. The pathmarking decision of International Shoe Co. v. Washington, 326 U. S. 310 , provides that state courts may exercise personal jurisdiction over an out-of-state defendant who has “certain minimum contacts with [the State] such that the maintenance of the suit does not offend ‘traditional notions of fair play and substantial justice.’ ” Id. , at 316. Endeavoring to give specific content to the “fair play and substantial justice” concept, the Court in International Shoe classified cases involving out-of-state corporate defendants. First, the Court recognized that jurisdiction could be asserted where the corporation’s in-state activity is “continuous and systematic” and gave rise to the episode-in-suit. Id., at 317. It also observed that the commission of “single or occasional acts” in a State may be sufficient to render a corporation answerable in that State with respect to those acts, though not with respect to matters unrelated to the forum connections. Id. , at 318. These two categories compose what is now known as “specific jurisdiction.” Helicopteros Nacionales de Colombia, S. A. v. Hall , 466 U. S. 408 , n. 8. International Shoe distinguished from cases that fit within the “specific jurisdiction” categories, “instances in which the continuous corporate operations within a state [are] so substantial and of such a nature as to justify suit against it on causes of action arising from dealings entirely distinct from those activities.” 326 U. S., at 318. Adjudicatory authority so grounded is now called “general jurisdiction.” Helicopteros, 466 U. S., at 414, n. 9. Since International Shoe , this Court’s decisions have elaborated primarily on circumstances that warrant the exercise of specific jurisdiction. In only two decisions postdating International Shoe has this Court considered whether an out-of-state corporate defendant’s in-state contacts were sufficiently “continuous and systematic” to justify the exercise of general jurisdiction over claims unrelated to those contacts: Perkins v. Benguet Consol. Mining Co. , 342 U. S. 437 ; and Helicopteros , 466 U. S. 408 . Pp. 6–9.

(b) Petitioners lack “the kind of continuous and systematic general business contacts” necessary to allow North Carolina to entertain a suit against them unrelated to anything that connects them to the State. Helicopteros , 466 U. S., at 416. The stream-of-commerce cases on which the North Carolina court relied relate to exercises of specific jurisdiction in products liability actions, in which a nonresident defendant, acting outside the forum, places in the stream of commerce a product that ultimately causes harm inside the forum. Many state long-arm statutes authorize courts to exercise specific jurisdiction over manufacturers when the events in suit, or some of them, occurred within the forum State. The North Carolina court’s stream-of-commerce analysis elided the essential difference between case-specific and general jurisdiction. Flow of a manufacturer’s products into the forum may bolster an affiliation germane to specific jurisdiction, see, e.g. , World-Wide Volkswagen Corp. v. Woodson , 444 U. S. 286 ; but ties serving to bolster the exercise of specific jurisdiction do not warrant a determination that, based on those ties, the forum has general jurisdiction over a defendant. A corporation’s “continuous activity of some sorts within a state,” International Shoe instructed, “is not enough to support the demand that the corporation be amenable to suits unrelated to that activity.” 326 U. S., at 318.

The opinion of the Court is available here.


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