GOODYEAR v. BROWN
The families of two North Carolina teenagers killed in a bus crash in France brought suit in North Carolina state court, alleging faulty tires. The tires were made in Turkey, and the plaintiffs sued Goodyear's Luxembourg affiliate and its branches in Turkey and France. A North Carolina appeals court held that the foreign defendants had sufficient contacts in the state to support general personal jurisdiction.
May a consumer sue a foreign manufacturer in a U.S. court when the manufacturer’s only connection with the United States is that another company sells its products in this country?
Legal provision: Fourteenth Amendment, Due Process Clause
No. The Supreme Court reversed the lower court order in a unanimous decision by Justice Ruth Bader Ginsburg. "A connection so limited between the forum and the foreign corporation, we hold, is an inadequate basis for the exercise of general jurisdiction," Ginsburg wrote. "Such a connection does not establish the 'continuous and systematic' affiliation necessary to empower North Carolina courts to entertain claims unrelated to the foreign corporation's contacts with the State."
Opinion of the Court
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SUPREME COURT OF THE UNITED STATES
GOODYEAR DUNLOP TIRES OPERATIONS, S. A.,
ET AL., PETITIONERS v. EDGAR D. BROWN,
ET UX., CO-ADMINISTRATORS OF THE ESTATE
OF JULIAN DAVID BROWN, ET AL.
ON WRIT OF CERTIORARI TO THE COURT OF APPEALS OF
[June 27, 2011]
JUSTICE GINSBURG delivered the opinion of the Court.
This case concerns the jurisdiction of state courts over corporations organized and operating abroad. We address, in particular, this question: Are foreign subsidiaries of a United States parent corporation amenable to suit in state court on claims unrelated to any activity of the subsidiaries in the forum State?
A bus accident outside Paris that took the lives of two 13-year-old boys from North Carolina gave rise to the litigation we here consider. Attributing the accident to a defective tire manufactured in Turkey at the plant of a foreign subsidiary of The Goodyear Tire and Rubber Company (Goodyear USA), the boys’ parents commenced an action for damages in a North Carolina state court; they named as defendants Goodyear USA, an Ohio corporation, and three of its subsidiaries, organized and operating, respectively, in Turkey, France, and Luxembourg. Goodyear USA, which had plants in North Carolina and regularly engaged in commercial activity there, did not contest the North Carolina court’s jurisdiction over it; Goodyear USA’s foreign subsidiaries, however, maintained that North Carolina lacked adjudicatory authority over them.
A state court’s assertion of jurisdiction exposes defendants to the State’s coercive power, and is therefore subject to review for compatibility with the Fourteenth Amendment’s Due Process Clause. International Shoe Co. v. Washington, 326 U. S. 310, 316 (1945) (assertion of jurisdiction over out-of-state corporation must comply with “ ‘traditional notions of fair play and substantial justice’ ” (quoting Milliken v. Meyer, 311 U. S. 457, 463 (1940))). Opinions in the wake of the pathmarking International Shoe decision have differentiated between general or allpurpose jurisdiction, and specific or case-linked jurisdiction. Helicopteros Nacionales de Colombia, S. A. v. Hall, 466 U. S. 408, 414, nn. 8, 9 (1984).
A court may assert general jurisdiction over foreign (sister-state or foreign-country) corporations to hear any and all claims against them when their affiliations with the State are so “continuous and systematic” as to render them essentially at home in the forum State. See International Shoe, 326 U. S., at 317. Specific jurisdiction, on the other hand, depends on an “affiliatio[n] between the forum and the underlying controversy,” principally, activity or an occurrence that takes place in the forum State and is therefore subject to the State’s regulation. von Mehren & Trautman, Jurisdiction to Adjudicate: A Suggested Analysis, 79 Harv. L. Rev. 1121, 1136 (1966) (hereinafter von Mehren & Trautman); see Brilmayer et al., A General Look at General Jurisdiction, 66 Texas L. Rev. 721, 782 (1988) (hereinafter Brilmayer). In contrast to general, allpurpose jurisdiction, specific jurisdiction is confined to adjudication of “issues deriving from, or connected with, the very controversy that establishes jurisdiction.” von Mehren & Trautman 1136.
Because the episode-in-suit, the bus accident, occurred in France, and the tire alleged to have caused the accident was manufactured and sold abroad, North Carolina courts lacked specific jurisdiction to adjudicate the controversy. The North Carolina Court of Appeals so acknowledged. Brown v. Meter, 199 N. C. App. 50, 57–58, 681 S. E. 2d 382, 388 (2009). Were the foreign subsidiaries nonetheless amenable to general jurisdiction in North Carolina courts? Confusing or blending general and specific jurisdictional inquiries, the North Carolina courts answered yes. Some of the tires made abroad by Goodyear’s foreign subsidiaries, the North Carolina Court of Appeals stressed, had reached North Carolina through “the stream of commerce”; that connection, the Court of Appeals believed, gave North Carolina courts the handle needed for the exercise of general jurisdiction over the foreign corporations. Id., at 67–68, 681 S. E. 2d, at 394–395.
A connection so limited between the forum and the foreign corporation, we hold, is an inadequate basis for the exercise of general jurisdiction. Such a connection does not establish the “continuous and systematic” affiliation necessary to empower North Carolina courts to entertain claims unrelated to the foreign corporation’s contacts with the State.
On April 18, 2004, a bus destined for Charles de Gaulle Airport overturned on a road outside Paris, France. Passengers on the bus were young soccer players from North Carolina beginning their journey home. Two 13-year-olds, Julian Brown and Matthew Helms, sustained fatal injuries. The boys’ parents, respondents in this Court, filed a suit for wrongful-death damages in the Superior Court of Onslow County, North Carolina, in their capacity as administrators of the boys’ estates. Attributing the accident to a tire that failed when its plies separated, the parents alleged negligence in the “design, construction, testing, and inspection” of the tire. 199 N. C. App., at 51, 681 S. E. 2d, at 384 (internal quotation marks omitted).
Goodyear Luxembourg Tires, SA (Goodyear Luxembourg), Goodyear Lastikleri T. A. S. (Goodyear Turkey), and Goodyear Dunlop Tires France, SA (Goodyear France), petitioners here, were named as defendants. Incorporated in Luxembourg, Turkey, and France, respectively, petitioners are indirect subsidiaries of Goodyear USA, an Ohio corporation also named as a defendant in the suit. Petitioners manufacture tires primarily for sale in European and Asian markets. Their tires differ in size and construction from tires ordinarily sold in the United States. They are designed to carry significantly heavier loads, and to serve under road conditions and speed limits in the manufacturers’ primary markets.1
In contrast to the parent company, Goodyear USA, which does not contest the North Carolina courts’ personal jurisdiction over it, petitioners are not registered to do business in North Carolina. They have no place of business, employees, or bank accounts in North Carolina. They do not design, manufacture, or advertise their products in North Carolina. And they do not solicit business in North Carolina or themselves sell or ship tires to North Carolina customers. Even so, a small percentage of petitioners’ tires (tens of thousands out of tens of millions manufactured between 2004 and 2007) were distributed within North Carolina by other Goodyear USA affiliates. These tires were typically custom ordered to equip specialized vehicles such as cement mixers, waste haulers, and boat and horse trailers. Petitioners state, and respondents do not here deny, that the type of tire involved in the accident, a Goodyear Regional RHS tire manufactured by Goodyear Turkey, was never distributed in North Carolina.
Petitioners moved to dismiss the claims against them for want of personal jurisdiction. The trial court denied the motion, and the North Carolina Court of Appeals affirmed. Acknowledging that the claims neither “related to, nor . . . ar[o]se from, [petitioners’] contacts with North Carolina,” the Court of Appeals confined its analysis to “general rather than specific jurisdiction,” which the court recognized required a “higher threshold” showing: A defendant must have “continuous and systematic contacts” with the forum. Id., at 58, 681 S. E. 2d, at 388 (internal quotation marks omitted). That threshold was crossed, the court determined, when petitioners placed their tires “in the stream of interstate commerce without any limitation on the extent to which those tires could be sold in North Carolina.” Id., at 67, 681 S. E. 2d, at 394.
Nothing in the record, the court observed, indicated that petitioners “took any affirmative action to cause tires which they had manufactured to be shipped into North Carolina.” Id., at 64, 681 S. E. 2d, at 392. The court found, however, that tires made by petitioners reached North Carolina as a consequence of a “highly-organized distribution process” involving other Goodyear USA subsidiaries. Id., at 67, 681 S. E. 2d, at 394. Petitioners, the court noted, made “no attempt to keep these tires from reaching the North Carolina market.” Id., at 66, 681 S. E. 2d, at 393. Indeed, the very tire involved in the accident, the court observed, conformed to tire standards established by the U. S. Department of Transportation and bore markings required for sale in the United States. Ibid.2 As further support, the court invoked North Carolina’s “interest in providing a forum in which its citizens are able to seek redress for [their] injuries,” and noted the hardship North Carolina plaintiffs would experience “[were they] required to litigate their claims in France,” a country to which they have no ties. Id., at 68, 681 S. E. 2d, at 394. The North Carolina Supreme Court denied discretionary review. Brown v. Meter, 364 N. C. 128, 695 S. E. 2d 756 (2010).
We granted certiorari to decide whether the general jurisdiction the North Carolina courts asserted over petitioners is consistent with the Due Process Clause of the Fourteenth Amendment. 561 U. S. ___ (2010). /p>
The Due Process Clause of the Fourteenth Amendment sets the outer boundaries of a state tribunal’s authority to proceed against a defendant. Shaffer v. Heitner, 433 U. S. 186, 207 (1977). The canonical opinion in this area remains International Shoe, 326 U. S. 310, in which we held that a State may authorize its courts to exercise personal jurisdiction over an out-of-state defendant if the defendant 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 (quoting Meyer, 311 U. S., at 463).
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, as in International Shoe itself, jurisdiction unquestionably could be asserted where the corporation’s in-state activity is “continuous and systematic” and that activity gave rise to the episode-in-suit. 326 U. S., at 317. Further, the Court observed, the commission of certain “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. The heading courts today use to encompass these two International Shoe categories is “specific jurisdiction.” See von Mehren & Trautman 1144–1163. Adjudicatory authority is “specific” when the suit “aris[es] out of or relate[s] to the defendant’s contacts with the forum.” Helicopteros, 466 U. S., at 414, 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 today called “general jurisdiction.” Helicopteros, 466 U. S., at 414, n. 9. For an individual, the paradigm forum for the exercise of general jurisdiction is the individual’s domicile; for a corporation, it is an equivalent place, one in which the corporation is fairly regarded as at home. See Brilmayer 728 (identifying domicile, place of incorporation, and principal place of business as “paradig[m]” bases for the exercise of general jurisdiction).
Since International Shoe, this Court’s decisions have elaborated primarily on circumstances that warrant the exercise of specific jurisdiction, particularly in cases involving “single or occasional acts” occurring or having their impact within the forum State. As a rule in these cases, this Court has inquired whether there was “some act by which the defendant purposefully avail[ed] itself of the privilege of conducting activities within the forum State, thus invoking the benefits and protections of its laws.” Hanson v. Denckla, 357 U. S. 235, 253 (1958). See, e.g., World-Wide Volkswagen Corp. v. Woodson, 444 U. S. 286, 287, 297 (1980) (Oklahoma court may not exercise personal jurisdiction “over a nonresident automobile retailer and its wholesale distributor in a products-liability action, when the defendants’ only connection with Oklahoma is the fact that an automobile sold in New York to New York residents became involved in an accident in Oklahoma”); Burger King Corp. v. Rudzewicz, 471 U. S. 462, 474–475 (1985) (franchisor headquartered in Florida may maintain breach-of-contract action in Florida against Michigan franchisees, where agreement contemplated ongoing interactions between franchisees and franchisor’s headquarters); Asahi Metal Industry Co. v. Superior Court of Cal., Solano Cty., 480 U. S. 102, 105 (1987) (Taiwanese tire manufacturer settled product liability action brought in California and sought indemnification there from Japanese valve assembly manufacturer; Japanese company’s “mere awareness . . . that the components it manufactured, sold, and delivered outside the United States would reach the forum State in the stream of commerce” held insufficient to permit California court’s adjudication of Taiwanese company’s cross-complaint); id., at 109 (opinion of O’Connor, J.); id., at 116–117 (Brennan, J., concurring in part and concurring in judgment). See also Twitchell, The Myth of General Jurisdiction, 101 Harv. L. Rev. 610, 628 (1988) (in the wake of International Shoe, “specific jurisdiction has become the centerpiece of modern jurisdiction theory, while general jurisdiction plays a reduced role”).
In only two decisions postdating International Shoe, discussed infra, at 11–13, 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 (1952) (general jurisdiction appropriately exercised over Philippine corporation sued in Ohio, where the company’s affairs were overseen during World War II); and Helicopteros, 466 U. S. 408 (helicopter owned by Colombian corporation crashed in Peru; survivors of U. S. citizens who died in the crash, the Court held, could not maintain wrongful-death actions against the Colombian corporation in Texas, for the corporation’s helicopter purchases and purchase-linked activity in Texas were insufficient to subject it to Texas court’s general jurisdiction).
To justify the exercise of general jurisdiction over petitioners, the North Carolina courts relied on the petitioners’ placement of their tires in the “stream of commerce.” See supra, at 5. The stream-of-commerce metaphor has been invoked frequently in lower court decisions permitting “jurisdiction in products liability cases in which the product has traveled through an extensive chain of distribution before reaching the ultimate consumer.” 18 W. Fletcher, Cyclopedia of the Law of Corporations §8640.40, p. 133 (rev. ed. 2007). Typically, in such cases, a nonresident defendant, acting outside the forum, places in the stream of commerce a product that ultimately causes harm inside the forum. See generally Dayton, Personal Jurisdiction and the Stream of Commerce, 7 Rev. Litigation 239, 262–268 (1988) (discussing origins and evolution of the stream-of-commerce doctrine).
Many States have enacted long-arm statutes authorizing courts to exercise specific jurisdiction over manufacturers when the events in suit, or some of them, occurred within the forum state. For example, the “Local Injury; Foreign Act” subsection of North Carolina’s long-arm statute authorizes North Carolina courts to exercise personal jurisdiction in “any action claiming injury to person or property within this State arising out of [the defendant’s] act or omission outside this State,” if, “in addition[,] at or about the time of the injury,” ”[p]roducts . . . manufactured by the defendant were used or consumed, within this State in the ordinary course of trade.” N. C. Gen. Stat. Ann. §1–75.4(4)(b) (Lexis 2009).3 As the North Carolina Court of Appeals recognized, this provision of the State’s long-arm statute “does not apply to this case,” for both the act alleged to have caused injury (the fabrication of the allegedly defective tire) and its impact (the accident) occurred outside the forum. See 199 N. C. App., at 61, n. 6, 681 S. E. 2d, at 390, n. 6.4
The North Carolina court’s stream-of-commerce analysis elided the essential difference between case-specific and all-purpose (general) jurisdiction. Flow of a manufacturer’s products into the forum, we have explained, may bolster an affiliation germane to specific jurisdiction. See, e.g., World-Wide Volkswagen, 444 U. S., at 297 (where “the sale of a product . . . is not simply an isolated occurrence, but arises from the efforts of the manufacturer or distributor to serve . . . the market for its product in [several] States, it is not unreasonable to subject it to suit in one of those States if its allegedly defective merchandise has there been the source of injury to its owner or to others” (emphasis added)). 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. See, e.g., Stabilisierungsfonds Fur Wein v. Kaiser Stuhl Wine Distributors Pty. Ltd., 647 F. 2d 200, 203, n. 5 (CADC 1981) (defendants’ marketing arrangements, although “adequate to permit litigation of claims relating to [their] introduction of . . . wine into the United States stream of commerce, . . . would not be adequate to support general, ‘all purpose’ adjudicatory authority”).
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. Our 1952 decision in Perkins v. Benguet Consol. Mining Co. remains “[t]he textbook case of general jurisdiction appropriately exercised over a foreign corporation that has not consented to suit in the forum.” Donahue v. Far Eastern Air Transport Corp., 652 F. 2d 1032, 1037 (CADC 1981).
Sued in Ohio, the defendant in Perkins was a Philippine mining corporation that had ceased activities in the Philippines during World War II. To the extent that the company was conducting any business during and immediately after the Japanese occupation of the Philippines, it was doing so in Ohio: the corporation’s president maintained his office there, kept the company files in that office, and supervised from the Ohio office “the necessarily limited wartime activities of the company.” Perkins, 342 U. S., at 447–448. Although the claim-in-suit did not arise in Ohio, this Court ruled that it would not violate due process for Ohio to adjudicate the controversy. Ibid.; see Keeton v. Hustler Magazine, Inc., 465 U. S. 770, 779–780, n. 11 (1984) (Ohio’s exercise of general jurisdiction was permissible in Perkins because “Ohio was the corporation’s principal, if temporary, place of business”).
We next addressed the exercise of general jurisdiction over an out-of-state corporation over three decades later, in Helicopteros. In that case, survivors of United States citizens who died in a helicopter crash in Peru instituted wrongful-death actions in a Texas state court against the owner and operator of the helicopter, a Colombian corporation. The Colombian corporation had no place of business in Texas and was not licensed to do business there. “Basically, [the company’s] contacts with Texas consisted of sending its chief executive officer to Houston for a contract-negotiation session; accepting into its New York bank account checks drawn on a Houston bank; purchasing helicopters, equipment, and training services from [a Texas enterprise] for substantial sums; and sending personnel to [Texas] for training.” 466 U. S., at 416. These links to Texas, we determined, did not “constitute the kind of continuous and systematic general business contacts . . . found to exist in Perkins,” and were insufficient to support the exercise of jurisdiction over a claim that neither “ar[o]se out of . . . no[r] related to” the defendant’s activities in Texas. Id., at 415–416 (internal quotation marks omitted).
Helicopteros concluded that “mere purchases [made in the forum State], even if occurring at regular intervals, are not enough to warrant a State’s assertion of [general] jurisdiction over a nonresident corporation in a cause of action not related to those purchase transactions.” Id., at 418. We see no reason to differentiate from the ties to Texas held insufficient in Helicopteros, the sales of petitioners’ tires sporadically made in North Carolina through intermediaries. Under the sprawling view of general jurisdiction urged by respondents and embraced by the North Carolina Court of Appeals, any substantial manufacturer or seller of goods would be amenable to suit, on any claim for relief, wherever its products are distributed. But cf. World-Wide Volkswagen, 444 U. S., at 296 (every seller of chattels does not, by virtue of the sale, “appoint the chattel his agent for service of process”).
Measured against Helicopteros and Perkins, North Carolina is not a forum in which it would be permissible to subject petitioners to general jurisdiction. Unlike the defendant in Perkins, whose sole wartime business activity was conducted in Ohio, petitioners are in no sense at home in North Carolina. Their attenuated connections to the State, see supra, at 4–5, fall far short of the “the continuous and systematic general business contacts” necessary to empower North Carolina to entertain suit against them on claims unrelated to anything that connects them to the State. Helicopteros, 466 U. S., at 416.5
Respondents belatedly assert a “single enterprise” theory, asking us to consolidate petitioners’ ties to North Carolina with those of Goodyear USA and other Goodyear entities. See Brief for Respondents 44–50. In effect, respondents would have us pierce Goodyear corporate veils, at least for jurisdictional purposes. See Brilmayer & Paisley, Personal Jurisdiction and Substantive Legal Relations: Corporations, Conspiracies, and Agency, 74 Cal. L. Rev. 1, 14, 29–30 (1986) (merging parent and subsidiary for jurisdictional purposes requires an inquiry “comparable to the corporate law question of piercing the corporate veil”). But see 199 N. C. App., at 64, 681 S. E. 2d, at 392 (North Carolina Court of Appeals understood that petitioners are “separate corporate entities . . . not directly responsible for the presence in North Carolina of tires that they had manufactured”). Neither below nor in their brief in opposition to the petition for certiorari did respondents urge disregard of petitioners’ discrete status as subsidiaries and treatment of all Goodyear entities as a “unitary business,” so that jurisdiction over the parent would draw in the subsidiaries as well.6 Brief for Respondents 44. Respondents have therefore forfeited this contention, and we do not address it. This Court’s Rule 15.2; Granite Rock Co. v. Teamsters, 561 U. S. ___, ___ (2010) (slip op., at 16).
* * *
For the reasons stated, the judgment of the North Carolina Court of Appeals is Reversed.
1 Respondents portray Goodyear USA’s structure as a reprehensible effort to “outsource” all manufacturing, and correspondingly, tort litigation, to foreign jurisdictions. See Brief for Respondents 51–53. Yet Turkey, where the tire alleged to have caused the accident-in-suit was made, is hardly a strange location for a facility that primarily supplies markets in Europe and Asia.
2 Such markings do not necessarily show that any of the tires were destined for sale in the United States. To facilitate trade, the Solicitor General explained, the United States encourages other countries to “treat compliance with [Department of Transportation] standards, including through use of DOT markings, as evidence that the products are safely manufactured.” Brief for United States as Amicus Curiae 32.
3 Cf. D. C. Code §13–423(a)(4) (2001) (providing for specific jurisdiction over defendant who “caus[es] tortious injury in the [forum] by an act or omission outside the [forum]” when, in addition, the defendant “derives substantial revenue from goods used or consumed . . . in the [forum]”).
4 The court instead relied on N. C. Gen. Stat. Ann. §1–75.4(1)(d), see 199 N. C. App., at 57, 681 S. E. 2d, at 388, which provides for jurisdiction, “whether the claim arises within or without [the] State,” when the defendant “[i]s engaged in substantial activity within this State, whether such activity is wholly interstate, intrastate, or otherwise.” This provision, the North Carolina Supreme Court has held, was “intended to make available to the North Carolina courts the full jurisdictional powers permissible under federal due process.” Dillon v. Numismatic Funding Corp., 291 N. C. 674, 676, 231 S. E. 2d 629, 630 (1977).
5 As earlier noted, see supra, at 6, the North Carolina Court of Appeals invoked the State’s “well-recognized interest in providing a forum in which its citizens are able to seek redress for injuries that they have sustained.” 199 N. C. App., at 68, 681 S. E. 2d, at 394. But “[g]eneral jurisdiction to adjudicate has in [United States] practice never been based on the plaintiff’s relationship to the forum. There is nothing in [our] law comparable to . . . article 14 of the Civil Code of France (1804) under which the French nationality of the plaintiff is a sufficient ground for jurisdiction.” von Mehren & Trautman 1137; see Clermont & Palmer, Exorbitant Jurisdiction, 58 Me. L. Rev. 474, 492–495 (2006) (French law permitting plaintiff-based jurisdiction is rarely invoked in the absence of other supporting factors). When a defendant’s act outside the forum causes injury in the forum, by contrast, a plaintiff’s residence in the forum may strengthen the case for the exercise of specific jurisdiction. See Calder v. Jones, 465 U. S. 783, 788 (1984); von Mehren & Trautman 1167–1173.
6 In the brief they filed in the North Carolina Court of Appeals, respondents stated that petitioners were part of an “integrated worldwide efforts to design, manufacture, market and sell their tires in the United States, including in North Carolina.” App. 485 (emphasis added). See also Brief in Opposition 18. Read in context, that assertion was offered in support of a narrower proposition: The distribution of petitioners’ tires in North Carolina, respondents maintained, demonstrated petitioners’ own “calculated and deliberate efforts to take advantage of the North Carolina market.” App. 485. As already explained, see supra, at 12–13, even regularly occurring sales of a product in a State do not justify the exercise of jurisdiction over a claim unrelated to those sales.
ORAL ARGUMENT OF MEIR FEDER ON BEHALF OF PETITIONERS
Chief Justice John G. Roberts: We will hear argument next in Case 10-76, Goodyear Dunlop Tires Operations v. Brown.
Mr. Feder: Mr. Chief Justice, and may it please the Court:
The North Carolina Court of Appeals asserted jurisdiction over Petitioners in this case on claims that arose from a bus accident in France that was unrelated to any North Carolina contact.
Although the Petitioners are located overseas and do not conduct any business in North Carolina, the court held that North Carolina had general jurisdiction over these defendants based solely on the sale in North Carolina of a small fraction of their products.
Under this Court's cases, the mere sale of a defendant's products in a State does not permit the State to reach out to assert judicial power over all of that defendant's worldwide conduct.
If that were permissible, every significant seller of products would be subject to suit everywhere on any claim arising anywhere.
Justice Ruth Bader Ginsburg: There's one piece of this I don't quite comprehend.
You -- there's no contest that there is jurisdiction over the parent, right?
Mr. Feder: Yes, Your Honor.
The parent company consented to jurisdiction in North Carolina.
It's appointed an agent for service of process there.
Justice Ruth Bader Ginsburg: So it's -- it's based on consent?
Mr. Feder: Yes.
They also have other business that the parent does conduct in North Carolina, but there's no objection to jurisdiction over the parent here.
This case solely concerns the Petitioners, who are corporations from Turkey, France and Luxembourg.
Justice Elena Kagan: Do you think there is general jurisdiction over the parent?
If the consent were not in the picture, is there?
Does general jurisdiction go beyond State of incorporation, principal place of business?
Mr. Feder: I think that that is a hard question.
Your Honor, the short answer is I think the answer is no, but I think that that is probably a close case, again putting aside the consent.
But I do think that general jurisdiction is about suing a company -- at least in the case of corporations, is about suing the corporation essentially where it's located or at home.
It's always fair to bring a suit against the corporation there.
I think that once you get beyond that, which is a situation that would be analogous to a State's power over a citizen or a resident of the State, I think you run into great difficulty finding a basis for the State to assert authority over claims completely unrelated to any business that -- or any contacts that the corporation has with the State.
That said, it wasn't contested here, and there is a consent to service of process, which may or may not create general jurisdiction.
There's a disagreement in the lower courts on that, but none of that is contested in this case.
And without having to get to that particular question of whether in fact it's limited to -- whether general jurisdiction is limited to place of incorporation or principal place of business, first of all, there's much more directly controlling authority.
In this case, the most directly relevant cases are Helicopteros and Consolidated Textile v. Gregory, working in tandem.
In Helicopteros, which was this Court's last corporate general jurisdiction case, the Court said that there was no general jurisdiction based on $4 million in purchases in the State and some other contacts; and the key is that -- on that point, is that the Court held that mere purchases could not provide the basis for general jurisdiction because the pre-International Shoe Decision in Rosenberg was controlling on that point.
Justice Anthony Kennedy: Again, this is preliminary and it just goes back to Justice Ginsburg's question.
Suppose you could help me out.
I assume that there is general jurisdiction over the parent company.
Then under respondeat superior, it would be liable in North Carolina for the -- all the acts of its agents?
Mr. Feder: I think that's a fair assumption.
Justice Anthony Kennedy: Well, then why isn't it automatically liable for all the acts of its subsidiaries?
Mr. Feder: Well, because I think--
Justice Anthony Kennedy: And does that get -- and does that get into what in the Federal practice would be necessary parties?
Mr. Feder: --What -- Your Honor, I think that really what it gets into is the difference between a subsidiary and an agent, because a subsidiary is not automatically acting as the agent of the parent company in a way where you would get respondeat superior.
And I think that part of what is going on in this case is that when this does go back to North Carolina for trial or for litigation against the parent company, I think that under North Carolina or whatever State's or nation's vail piercing or agency standards the North Carolina courts will apply, the plaintiffs will have great difficulty actually with the substantive case against the parent company, because you would actually have to show involvement in the actions that actually the claim arose out of here.
The mere general control that's inherent in the parent/subsidiary relationship is not going to create liability, and here -- important to remember -- we're talking about a tire manufactured in Turkey, accident in France, which Goodyear Tire and Rubber Company -- and now this is outside the record, as I understand it -- did not have any direct connection with.
Again not relevant to the jurisdictional question here, but I -- just for sort of setting the context.
Justice Ruth Bader Ginsburg: You are met with an argument that it's all one ball of wax, parent and sub, they merge, it's one enterprise; and so if the subs do something anyplace, the parent is -- it's all part of one thing, so I think that was the principal argument made by Respondents.
Mr. Feder: Yes, Your Honor, and I would say, again when it comes to liability and Goodyear Tire and Rubber, they will be free to make that argument.
That argument is not properly presented here.
It was never made below.
It was never -- it was not made in the brief in opposition to cert, so any argument for ignoring corporate distinctions or an enterprise theory, none of that was made, and therefore has been waived.
I think that, secondly, as we indicated in our reply brief--
Justice Antonin Scalia: We haven't resolved a whole lot if we leave that question open, have we?
You want us to write an opinion that says: Unless you -- unless you ignore the separate corporate existence of the subsidiary -- parenthesis, a question on which we expressed no opinion, close parenthesis -- there can be no jurisdiction in cases like this?
Is that the kind of an opinion that the world is waiting for?
Mr. Feder: --Well, Your Honor, I think that actually in -- if the Court were to write that, it would be left with the important general jurisdiction question that the court below decided incorrectly, and incorrectly in a few ways.
I think that, in fact, there would be several ways for this Court to approach it, all of which would actually help to clear up the law in this area.
I think that even if one gets past the waiver point -- and the reason the Court shouldn't get past the waiver point is, among other things, because it wasn't raised -- we, of course, had no opportunity to put in evidence that, in fact, these corporations are run separately, independent decisionmaking, observation of corporate form, and all the other things that would normally go into it.
If you want to reach it, first of all, there is -- even on the standards articulated in the Respondent's brief, there is nothing in the records that supports it.
Justice Antonin Scalia: I thought you were saying we should not even -- not even -- not even address the situation where there is no special basis for ignoring the separate incorporation.
I -- of course, we should not get into questions of whether, in fact, the subsidiary was a sham, that there was control, all of that.
Mr. Feder: Oh.
Justice Antonin Scalia: But the simple question of whether when you have a totally owned subsidiary, its actions are your actions.
Mr. Feder: That, I think, the Court--
Justice Antonin Scalia: Don't we have to reach that?
Mr. Feder: --You certainly do have to reach that, Your Honor.
The Court has reached it and decided it before, and has said that the mere parent-subsidiary relationship does not create attribution one to the other, most recently in Keeton, in which the Court cited some of its older cases for that very proposition.
And I think that in -- another way to look at it is, even if you wanted to treat the sales in North Carolina as if they were made there directly by these Petitioners -- in other words, even if you picked -- assuming arguendo that you could attribute those sales directly to the Petitioners and not, as the court below found, treat them as not having been caused by them, that does not come close to satisfying what is required for general jurisdiction.
And in particular, in going back to Helicopteros and Gregory, just as the Rosenberg case was binding in Helicopteros on the point that mere purchases are not enough for general jurisdiction, here Consolidated Textile v. Gregory is binding on the flip side of that, which is that mere sales in the State are not enough for general jurisdiction.
Even if Gregory weren't binding, I think that you could look at Helicopteros and say there is no real basis for a distinction between mere purchases and mere sales.
But in fact, there is a case directly on point, and as well as a lot of case law from the time of Gregory more generally requiring much more substantial -- substantial physical presence in the State.
In terms of -- I think no personal jurisdiction argument should go by without talking about International Shoe, and if you look at just the International Shoe line of cases, even aside from this issue of Gregory being binding, the decision below is equally, if not more, untenable.
International Shoe itself recognizes -- in sort of carving out an area for what eventually came to be called general jurisdiction, it recognizes the extraordinary nature of the State power that we're talking about when we talk about general jurisdiction, which is this power to reach out and assert State power over things that by hypothesis have no relationship to contacts with the State.
International Shoe uses the language saying that you need continuous corporate operations within the State and says that these continuous corporate operations have to be so substantial and of such a nature as to justify this jurisdiction over conduct that is entirely unconnected to the State.
The one case where the Court has upheld general jurisdiction since International Shoe over a corporation is Perkins, which was a case that involved the corporation's principal place of business, and in Helicopteros, following Perkins, when the Court articulated the standard there, the Court said that we're looking to see whether there are contacts of the sort that we found to exist in Perkins.
Justice Ruth Bader Ginsburg: Perkins is kind of an unusual case, because it was a company that at the time was doing business only in Ohio.
It was a Philippine mining company and it was World War II, so the mines couldn't be run.
So to the extent that the corporation was existing anywhere, it was in Ohio.
Mr. Feder: --That's right, Your Honor, and I guess what I would say about that is that it's unusual.
Those are unusual facts, but not unusual in terms of what is required to be able to assert general jurisdiction.
The Court in Keeton later described Perkins as essentially involving the corporation's principal place of business, and I think that's right because in order for the State to be able to assert jurisdiction over things unrelated to the State, you need that type of relationship equivalent to a citizen or resident that gives a State authority over the corporation's actions worldwide and not just -- because this goes far beyond specific jurisdiction where the State has a manifest interest in an accident or a claim that arose in the State or connected to the State.
Helicopteros, just to circle back on that point, does say, we're looking for contacts of the sort found to exist in Perkins, and -- and as we said, said that even $4 million in purchases were not enough.
I think that all of those cases help to make it clear why the mere sales here are not enough.
And if there are no further questions, I would like to reserve the remainder of my time for rebuttal.
Chief Justice John G. Roberts: Thank you, counsel.
ORAL ARGUMENT OF BENJAMIN J. HORWICH, ON BEHALF OF THE UNITED STATES, AS AMICUS CURIAE, SUPPORTING PETITIONERS
Mr. Horwich: Mr. Chief Justice, and may it please the Court:
The North Carolina State court was wrong to assert general personal jurisdiction over Petitioners, extending potentially to any claim against them arising out of any conduct of theirs anywhere in the world, and there are several ways to see why that's wrong.
Even if the Court were to accept the proposition that such contacts with North Carolina as there are in the record should be attributed to Petitioners, those contacts still don't rise to the level of what this Court has -- has demanded in terms of continuous and systematic contacts.
And even setting those more -- those more precedential tests aside, I think there's also a -- the result of the North Carolina court's decision is that the jurisdictional consequences here would be quite disproportionate to the contacts that -- that -- on which it would be based.
So if I can, I guess, turn for a moment to the continuous and systematic contacts proposition, which this Court has certainly not elaborated in its case law, but I think it -- it would be -- I think it's useful to speak of, of what exactly the Court was trying to get at.
What we think the Court was trying to get at, particularly by, as my friend referred to, particularly by its reference in Helicopteros to Perkins as -- as being sort of a benchmark for what continuous and systematic contacts are, I think it requires seeing an active volitional undertaking by the -- by the defendant.
It can't be based on the contact -- conduct of third parties.
Obviously the continuous concept of existing without interruption.
And with respect to systematic, we think that that means there needs to be a plurality of contacts, they have to be of -- of different kinds or qualities in a sense of perhaps employment, as well as contractual, as well as regulatory, as well as property, as well as sales or purchases, and that those contacts together have to have some interrelationship that results in something that might be thought of as more than the sum of their parts.
Justice Ruth Bader Ginsburg: Well, suppose it's just a corporation that's registered to do business in North Carolina, and the connection with that registration; it says: I appoint so-and-so my agent to receive process for any and all claims?
Mr. Horwich: Well, as -- as Mr. Feder referred -- referred to, there -- there is a division in the lower courts on whether that sort of a consent is effective to permit the State general jurisdiction over -- over the consenting party.
That -- but the Court has, I -- I think, been -- been fairly clear in -- in -- in setting notions of -- of formal consent to one side when considering contacts-based cases.
And, so, in part, this case, therefore, doesn't present that question and we don't have a position, as the government, on that today, with respect to whether that's effective.
But it certainly is the case that simply because one entity in a Goodyear family of -- of related corporations has consented, that somehow that consent should extend to the entire enterprise.
And if I can, maybe, take a minute to talk about where we think the Respondents' view of -- of this enterprise jurisdiction goes wrong, because we touched on it only -- only briefly in our brief, which was, of course, filed before theirs.
When -- when a court confronts a -- a set of -- a corporate family, if you will, there seem to be two principles that can be usefully applied in determining the jurisdictional consequences of that relationship.
One is the alter ego concept, which certainly doesn't seem to be supported on anything in the record here in the sense that there's -- that there's no sound suggestion in the record that -- that the European entities were somehow a sham, that they didn't have any separate existence, they were undercapitalized or any of the other indicia that you would see.
And, so, to your point, Justice Scalia, I think it is certainly something the Court could say that the record here is no basis for that kind of a decision to disregard the corporate separateness.
Then the other concept is the agency concept.
And I think that may be what -- what Respondents are placing somewhat greater reliance on.
And we certainly -- we certainly have the view that an agent, acting on behalf of a principal within the scope of its agency, can take actions that create contacts with the jurisdiction that are, by virtue of the agency relationship, attributable back to the principal.
But there are -- there are two important things to realize, that that -- that that proposition is somewhat modest in that, first of all, simply because a -- a parent owns a subsidiary does not mean the subsidiary is the parent's agent.
Plenty of parents simply own subsidiaries as property or for various business reasons.
It doesn't mean the subsidiary is automatically always acting as the agent of the parent for all purposes or any at all.
And -- and the second thing to be cautious about in applying the agency principle is that the agency relationship only runs one way.
That is to say, the agent can do something that creates a contact on behalf of the principal, but that's not to say that everything the principal does in its independent activities says anything about what contacts its agent has.
That's exactly backwards.
In the -- and, so, here the -- the allegation actually in the complaint is that the European companies are the agents of the parent -- of the -- of the Goodyear U.S. entity, that's -- that's paragraph 16 of the complaint at page 112 of -- 122 of the joint appendix.
So it -- it might be -- it -- it -- there might be an argument that something that the European subsidiaries have done, say, in Turkey is something that could be chargeable to the U.S. parent in a case where it was relevant what the parent's relationship with Turkey was.
But what Respondents are asking for here, in effect, turns that completely around and suggests implicitly that the -- the -- this -- the parent of the Goodyear organization in the United States was somehow doing the bidding, acting at the direction and control of the European companies as principals.
Justice Elena Kagan: Mr. Horwich, could I ask you a different kind of question, and I apologize in advanced for taking you a little bit far afield?
But -- but I wanted to ask you about a particular sentence in your brief that seems to have some relevance to, not the general jurisdiction question but some relevance to specific jurisdiction.
So this is on page 20.
"If mere purposeful availment of commercial opportunities in a particular State, which is of course the test for a specific jurisdiction, if that purposeful availment were sufficient to subject an enterprise to the general jurisdiction of that State's courts, a corporation that sold its goods to an independent distributor intending that they be resold in all 50 States could potentially be brought to judgment in any State on any claim against it. "
So I -- I take that -- I understand that to read that you think that it is purposeful availment that subjects a company to specific jurisdiction -- not to general jurisdiction, but to specific jurisdiction -- if a corporation sold its goods to an independent distributor intending that they be resold in all 50 States.
Am I reading that correctly?
Mr. Horwich: No, I don't -- I don't believe so, in the sense that I -- I think we were sort of assuming arguendo a concept of purposeful availment that -- that would be willing to attribute those -- those contacts for purposes of a specific jurisdiction -- excuse me -- for purposes of a specific jurisdiction analysis.
I don't know if that helps with the -- with the answer, but--
Justice Elena Kagan: No, I was hoping that the answer would be yes, actually.
Chief Justice John G. Roberts: There's at least one other person in the courtroom who was hoping that, too.
Justice Anthony Kennedy: I -- I -- I was wondering why -- why is your interest in this case so much greater than it would be in -- in the other case, and this -- I've been wondering that at the outset, and this sentence that Justice Kagan points out brings that into full focus.
Mr. Horwich: --Well, Justice Kennedy, let me -- let me put it this way.
It -- it -- the difference in our interest in the two cases is at bottom just a difference in magnitude, but we think it's a fairly significant difference in magnitude in the sense -- in the sense that the jurisdictional consequences of an assertion of general jurisdiction are that -- with that one determination it is the case that that defendant can potentially be brought to judgment in a forum for all -- for claims arising from any of its conduct anywhere in the world.
And specific jurisdiction by construction, by its very nature, is only going to be a determination -- whatever the contours of the specific rules that are used, it's going to never be more than the determination that jurisdiction in a claim, considering the relationship between the defendant, the forum, and the particular litigation gives rise to jurisdiction.
Justice Stephen G. Breyer: So, why -- why -- I mean, you've heard the argument in the last case.
I mean, it seems that potentially can subject the smallest manufacturer to liability throughout the world because it uses the Internet.
And -- and that -- I don't know what the foreign -- you have heard treaties discussed, et cetera.
Do you want to say anything?
Chief Justice John G. Roberts: And briefly.
Mr. Horwich: Yes, Mr. Chief Justice.
The -- the -- the brief answer is that the Internet questions, in particular, are so complicated and indeed so potentially far-reaching that in a case that presented them our interest might very well be different.
Chief Justice John G. Roberts: Saved by the bell.
ORAL ARGUMENT OF COLLYN PEDDIE ON BEHALF OF RESPONDENTS
Collyn Peddie: Mr. Chief Justice, and may it please the Court:
The Goodyear Petitioners ask this Court to assist them in avoiding the jurisdiction of the North Carolina courts.
This Court should decline for two reasons.
First, there's nothing new here.
Ample evidence supports North Carolina's exercise of general jurisdiction over the Petitioners under very well established general jurisdiction and due process principles.
Justice Ruth Bader Ginsburg: I think there's something very new about this, because general jurisdiction is all-purpose jurisdiction and for a corporation it's sort of like a residence for an individual.
I think Mr. Feder was making that point.
What's -- what's troubling here is that the North Carolina court seems to be blending the two together, specific jurisdiction based on the claim arising in the forum, and general jurisdiction with a claim that has nothing to do with the forum, and it's insertion of jurisdiction over any and all claims.
And I do not know of any case post-International Shoe.
The only thing that we have is Perkins v. Benguet.
Is there -- is there any case in which this Court has sanctioned the assertion of general jurisdiction based on some prior -- some product coming into the State, not the product that caused the injury abroad?
I don't know any case.
Collyn Peddie: --Your Honor, if that's -- if that's the characterization of the case and that's all you had, then there wouldn't be a case.
Our argument here, and I think the -- what the -- what the evidence in this case bears out is that is not the case here.
The characterization of the case by both the government and by Petitioners is that there is simply mere sales here and they ignore how the sales occurred.
Our focus is on how the sales occurred, and I think Justice Scalia made a -- a correct distinction, that what we're doing here is not talking about attribution, that -- that sort of thing, and -- and simply saying that because someone down the line sold them, without any other discussion, there's general jurisdiction.
That's not correct.
Justice Anthony Kennedy: Well, then, you don't defend the reasoning of the State supreme court?
Collyn Peddie: I think that the -- the State supreme court did a lot of things right, but, as we say in the brief, we think that they took a detour in using inappropriate stream-of-commerce language that isn't there.
It's not that they didn't have help doing it.
For example, the Petitioners have changed their tune here.
They talked routinely about purposeful avail -- availment in their briefs to the court of appeals and to the supreme court.
For example, page 327 of their brief requests that they -- that they find purposeful availment here.
So the court had a lot of help.
But that part of the opinion we don't really think is appropriate, nor is it necessary.
The point that I'm making about there being nothing new is that there is ample evidence in this case to apply to the general jurisdiction principles that were used in Perkins and used in Hall and that can cause this Court to reach the correct result.
As the Court is well aware, this Court can affirm on any basis supported in the record, and we believe that there is a basis in well-established rules supported in the record, whether it agrees with the court of appeals decision or not.
It's not bound by that analysis, nor are we.
I would like to address the question of waiver because it's -- it's come up.
I think that the Solicitor General has correctly--
Justice Antonin Scalia: You -- you've got -- you have me in suspense.
Tell me why it is that the general principles of jurisdiction do apply here, and then we can get to waiver.
Collyn Peddie: --Okay, okay.
Justice Antonin Scalia: Don't leave me dangling like that.
Collyn Peddie: Your Honor, as far back as -- as Burger King, this Court recognized that commercial activities when they're conducted on behalf of an out-of-State party can sometimes be attributed.
Even the Solicitor General agrees that there's a different jurisdictional analysis that may apply over and above something like Cannon or Rush v. Savchuk, if there are case-specific interactions between particular affiliated corporations as you have here.
Justice Antonin Scalia: Excuse me.
Case-specific is not talking about general jurisdiction.
Collyn Peddie: No, no, but--
Justice Antonin Scalia: It's talking about specific jurisdiction.
Collyn Peddie: --But what they're talking about are that there are evidentiary case-specific interactions between the parties that would lead to the conclusion of general jurisdiction and thus subjecting them to suit on -- in dispute-blind -- or dispute-blind jurisdiction.
In addition, this Court has used in a variety of other areas a unitary business principle for local taxation in Mobil.
And even as far back as 15 years ago, the Hague Convention, our trade partners that are complained of here, talked about the fact that using -- attributing contacts or counting contacts that were based on conduct performed by others was appropriate and was not really a sticking point and that they were perfectly content to leave that to other cases.
Justice Antonin Scalia: Okay.
Just give me a list of -- of what -- what factors you think support general jurisdiction here.
Collyn Peddie: In terms of the--
Justice Antonin Scalia: One, two, three, four, which ones are they?
Collyn Peddie: --Okay.
In this case I think it's the part -- and frankly we'll use the Solicitor General's definition of a system, from their brief at -- at page 23 where they talked about conduct that forms a system and aggregation of objects united by some form of regular activity or interdependence.
Using their definition, I think you ask the question: Is a defendant part of a continuous business system or enterprise that conducts general business activities in the forum?
And the first question you asked is: Is it a single system or an enterprise?
This Court has said in Mobil Oil that a unitary business is identified by--
Justice Ruth Bader Ginsburg: --we don't have anything in the record about this being a unitary business.
Unless you're trying to present some sweeping, piercing the corporate veil theory, there is nothing here that says that these are -- corporations are not acting separately, that have their own officers, have their own employees, keep their own books.
There's nothing to show that it's all part of one--
Collyn Peddie: --I disagree with that, Your Honor.
Under the sort of traditional measures that the Court has used in terms of -- of ownership, et cetera, I don't think there is anything.
But even the Solicitor General concedes at page 27 of their brief that the court of appeals effectively treated the parent and subsidiary corporations as an undifferentiated entity for distribution of the Petitioners' product, and that was our position below.
And I think if you look at--
Justice Antonin Scalia: Well, the question isn't whether they did that; the question is whether it was right to do that.
Collyn Peddie: --That -- that--
Justice Antonin Scalia: I mean, you don't make your point by saying that the court of appeals made a mistake.
Collyn Peddie: --No, no.
But I think -- I think what -- what -- at least as I understood her question -- and I may have misunderstood her question -- was is there anything in the record where, where they had done that.
I think the -- the evidence in the record is part and parcel of the fact findings that the trial court made about the existence of a highly integrated supply and distribution system in the -- that operates in the State.
The number of tires, for example, the Petitioners manufactured in North Carolina was determined solely by orders that were solicited in North Carolina by Goodyear and forecasts made by Goodyear based on data that they gathered there.
On the distribution side, the testimony from Mr. Kramer was that they don't send tires for distribution, they don't do any distribution.
It was an internal distribution system.
Justice Antonin Scalia: Well, I mean, those arrangements could exist with a lot of distributors.
You don't want to ship a distributor stuff that the distributor is not going to be using.
Collyn Peddie: Your Honor, I think--
Justice Antonin Scalia: I mean, my goodness.
The fact that you coordinate with your distributor how much of your product you are going to ship to him doesn't -- doesn't really show--
Collyn Peddie: --Your Honor--
Justice Antonin Scalia: --that you are a unitary business with your distributor.
Collyn Peddie: --Your Honor, I think this goes way beyond coordination.
For example, Mr. Kramer testifies that, quote,
"their job is just to be given a forecast or a ticket, and then they just build widgets, that's all they do. "
They were complete -- their -- their solicitation and their production was solely based on the control and the requests from the parent.
The requests, as he testified, quote:
"Emanate from the request that Goodyear would make. "
and the production and supply system was the same for all of them.
On the distribution side the testimony was even more -- I think was even more limited, in that he said the plant in Turkey doesn't control any distribution.
They wouldn't send anything into United States without the approval and sanction of the parent, and anything else, quote, "just doesn't happen".
So this was a closed system, it was dominated by -- by the Goodyear parent, and there wasn't a question of coordination.
It was they didn't produce unless the parent told them to; they sent it where the parent said they should send it to; and when it got to the United States, the testimony is, is that the parent controlled it at that point.
Justice Ruth Bader Ginsburg: --But the "it" wasn't the product that caused the injury here.
As I understand the case the tire that allegedly caused this bus to turn over was designed for the European and Asian market, not the U.S. market.
Collyn Peddie: The Goodyear Regional RHS tire that was on the bus and that failed was not generally designed for the U.S. market, although it was brought over here under special circumstances.
The tires we're talking about are of three kinds.
There are passenger and bus tires that you would ordinarily see that would be sold individually; second, a second category are tires that were sold as original equipment on cars and buses; and third, and the predominant type that were sent to the United States, were specialty tires for so-called low boy trailers which were horse trailers, boat trailers, of which there are in many North Carolina.
Justice Ruth Bader Ginsburg: But why did -- why should -- Mr. Feder brought up the Helicopteros and he said in that case it was purchase; and in this case it's sales, and in the purchaser case certainly we said no, there's no general jurisdiction.
Why should it be any different?
Collyn Peddie: I think the distinction between Hall and Perkins is not so much purchases and sales, it's: Which contacts do you count?
And the language that is sort of forgotten in Hall is the language they talk about.
You needed to have the same general business contacts that you had in Perkins.
I think the difference is, is that purchases are sort of a one-shot deal.
They may be supplies, but -- they're more regular, but the core business is selling, is selling items, and so sales count more than purchases.
I apologize for interrupting.
Justice Ruth Bader Ginsburg: In Perkins it was the home of the corporation.
There was no other at the time, because their permanent home was not functioning because of the war.
So there was only one place.
Collyn Peddie: Your Honor, I think the facts of that case are -- is that one officer of the corporation came home, and he was -- he maintained--
Justice Ruth Bader Ginsburg: He was the president of the corporation?
Collyn Peddie: --He was the president of the corporation.
Justice Ruth Bader Ginsburg: And whatever business it was doing, it was doing from that office in Ohio.
Collyn Peddie: Right.
And the Court characterized that -- I think there was a difference in what the Court did in Perkins and how it was described in Keeton.
That's the language the Petitioners have used.
But the language that the Court used in Perkins was that the decision was based on the supervisory activities; not the fact that it was the principal place of business, but the fact that the supervision over, for example, the renovation of the factory after the war took place in the forum.
Justice Ruth Bader Ginsburg: May I ask you about the ramifications of your theory of this general jurisdiction in North Carolina over these three subsidiaries?
Suppose that one of the children on the bus was a Canadian citizen, was going home to Canada, and had the idea that juries in North Carolina are more liberal than in France -- well, there wouldn't be any jury in France.
So could the Canadian come and sue because there's general jurisdiction in the United States?
Collyn Peddie: I think it would depend upon a lot of factors, Your Honor.
Are you assuming that there's -- it's established that there's general jurisdiction there, or are we in the same fact pattern as here?
Justice Ruth Bader Ginsburg: No, we're talking about Goodyear and these three subsidiaries.
You say there's general jurisdiction in North Carolina.
Those companies can be sued on any and all claims.
So my question is: Could anyone on that bus that turned over in Paris come to North Carolina to bring the wrongful death or whatever suit?
Collyn Peddie: I think in theory, they could.
I think in practice, the case would never stay there because of the controls we talked about on forum shopping, about, particularly, forum nonconvenience.
One of the suggestions, for example, that we made is one may want to consider for due process purposes the residence of the plaintiff.
Is it fair, for example, to have a case in North Carolina where the plaintiff doesn't live in North Carolina, as they do here, but lives in Canada?
So that's -- that's one limitation.
And as this Court said in the Sinochem case, you can look at the forum non convenience before you look at the jurisdictional issue.
Justice Anthony Kennedy: Well, that's an -- that's an odd way to think about general jurisdiction.
General jurisdiction is principally status.
Your residence, the principal place of business, the place of incorporation.
And these factors that you're mentioning, they're -- in fact, some of the factors you mention in the brief are quite different than that.
Collyn Peddie: Your Honor, I think if -- if the limitation -- if the Court's view is basically the Petitioners', that you are limited to principal place of business, State of incorporation, and physical presence, which we don't think is the State of the law, and frankly, if it were the State of the law, then we would have a Hague convention now and it wouldn't have taken 20 years to negotiate.
If -- if that's the position that the Court is taking, then I don't think that, you know, this case represents something different.
I think that the State of the law is that -- or at least the professed State of the law is that it is based on continuous and systematic contacts.
Justice Sonia Sotomayor: Let's assume that you're right, that on some level that some -- that it's not just the place of incorporation or the principal place of business, that it could be created by something more.
The only something more here is Goodyear USA, so your adversary is right that what you're asking us to do is sort of a reverse principal-agent.
You're saying that the subsidiary has used the principal, its owner, as its agent.
That's really -- that's the core problem with your argument, isn't it?
Because without the Goodyear USA activities, there's no other activity by the foreign corporations.
Collyn Peddie: Your Honor, I think what we're talking about is not so much attribution as more of a merger or a joint activity.
What we're saying is that there is a system, by the Solicitor General's own definition, to kind of interdependent relationship that the solicitor general--
Justice Sonia Sotomayor: Does good -- do any of these companies, the Goodyear Turkey Company, the others, do any of them sell the tires directly to Goodyear USA for distribution to the United States?
As I understand it, these tires were sold to other entities, foreign entities, who then sold them to the U.S.?
Collyn Peddie: --That's -- that's not borne out by the record.
It was represented by the Petitioners.
We put a footnote in the brief that the citations they give do not bear that out.
There's nothing in the record, and we've read it twice since then.
It indicates they were sold and they have backed off on that in their reply brief.
Instead, there were three methods of distribution.
They are discussed at page 265 of the brief.
Items were either sent directly from the factory to the buyers that were identified by Goodyear.
They were either then sent to Goodyear that took ownership or took possession of them when they arrived in the United States.
They were put in a warehouse and sold outside, but there were several distribution methods.
Justice Antonin Scalia: Page 265 of the brief?
I didn't read that many pages.
Collyn Peddie: Excuse me.
Page 265 of the Joint Appendix.
I'm sorry, Your Honor.
Justice Elena Kagan: This is just a -- this is an I'm-just-curious question: Why do you care?
You have Goodyear USA, which has consented to jurisdiction.
Why does it make a difference to get these other companies in the North Carolina courts?
Does North Carolina not make Goodyear USA substantively liable for this accident?
Collyn Peddie: Your Honor, North Carolina has particularly Draconian requirements for piercing the corporate veil and alter ego, some of which Petitioners refer to.
For example, the proximate causation of the wrong has to be related to the domination and control, and so ideally it would be great if we could go back and simply deal with them and let them collect from their--
Justice Elena Kagan: So -- but what you're saying, then, is that North Carolina treats the parent and the subs very differently as a matter of substantive law, but you would want identical treatment as a matter of jurisdiction?
Collyn Peddie: --Right.
They have very -- in most states, frankly, there's a -- a lesser requirement for the exercise of jurisdiction, merely allowing the suit to go forward, than there is for actual imputation of liability or imposition of liability, and so North Carolina, I think, is a very good example of that.
They have a fairly liberal requirement or state of the law that we cited in the Manly case, where general personal jurisdiction exists over a foreign corporation where it is controlled by or controls a local corporation.
And that's the white confectionary case that we cited in the -- excuse me, the chocolate confectionary case cited in the Manly case.
Justice Sonia Sotomayor: I'm not sure that that answered -- I understood you to be saying that substantively, they might not be liable for the defect that caused the accident.
Is that it?
Collyn Peddie: Yes.
I mean, we -- I think you have to understand that this case is at a very embryonic state.
We have done no discovery in this case.
This was an appeal, an interlocutory appeal from the denial of a motion to dismiss, and so there's been one deposition on a very limited jurisdictional issue, so we've not had an opportunity to develop the facts.
We hope we will be able to develop those facts, but what we're faced with here is a situation where North Carolina would permit the exercise of jurisdiction under its well-established law on general personal jurisdiction, but when it comes to the imposition of liability for substantive purposes, that may be a much, much, much tougher sledding.
And so in order to preserve the interests of our client, we've -- we've gone down this road as well.
Justice Ruth Bader Ginsburg: Do you have any case law that supports your position, which, I take it -- and correct me if I've got it wrong -- that a subsidiary is subject to jurisdiction wherever the parent is, so long as some products made by the subsidiary are shipped by the parent to the -- to buyers in the foreign State?
Collyn Peddie: No, Your Honor, because that's not our position here.
Our position is that if you participate in this kind -- not a general, but in this kind of very tightly controlled system, distribution and supply system, then there is general jurisdiction in the forum over the foreign subsidiary that participates in this.
But simply generally having a parent subsidiary relationship and shipping goods into the forum, that's not what we're contending.
And frankly, I don't think that that would be a situation in which general jurisdiction would apply.
Justice Ruth Bader Ginsburg: I see nothing in the North Carolina court's opinion that explains that this is the -- this is a corporation where we can obliterate the distinction between parent and sub.
Collyn Peddie: Your Honor, they do talk repeatedly about the existence of this highly integrated distribution system.
I think it might be helpful to sort of flip it over and say what would happen if we adopted the Petitioners' view that you ignore the system, and all you look at is a -- is a few sales?
I think that then you would end up with a situation that would be unfair to the State of North Carolina in terms of providing a forum for its residents.
For example, if I may give a hypothetical, if you have a, not a manufacturing plant in Turkey, but let's say in China that is producing massive amount of tires for importation into the United States, thousands of tires, in this same distribution system, based on their view that it has to be principal place of business, state of incorporation, and that mere sales are not -- don't count, and it has the same jurisdiction system, then even that, that producer, and frankly, Goodyear is one of those producers, wouldn't be liable in North Carolina if the injury occurred someplace else.
Justice Ruth Bader Ginsburg: There's -- there's a -- you open your brief saying something to the effect that this case is about outsourcing.
Jobs in the U.S. going to some subsidiary port.
But then these subsidiaries are making tires, which on your own admission, very rarely come to the United States because they're designed specifically for vehicles in Asia and in Europe, and so I would think that Turkey would be the ideal location for -- for such a place.
I don't get your outsourcing pitch.
Collyn Peddie: Your Honor, our -- our position here is that you will incentivize outsourcing if you agree with the Petitioners' view.
With regard to the existing plants, 1,500 miles, which is the distance from Istanbul to Paris, is -- is not exactly local production.
But what we're talking about is, again, something like the example that I gave you of a production in China, that you have, and -- and it's based on the definition that we make of outsourcing, which are jobs that simply were in the United States.
If a CEO is faced with a situation of locating a plant in -- in North Carolina and subjecting the production of that plant, even if it's completely for export, and particularly if it's completely for export to the jurisdiction, the general jurisdiction of the State courts, and can put that plant in China and send items around the world and not be subject to the jurisdiction of North Carolina, where do you think they're going to put that plant?
Now, I don't disagree that--
Justice Antonin Scalia: Would they rather be sued in China?
Collyn Peddie: --I think they would rather be sued in China.
Justice Antonin Scalia: I wouldn't.
I don't know anybody who would.
Collyn Peddie: Well--
Chief Justice John G. Roberts: Don't you think that's a question as to which we ought to have some sensitivity of the views of the United States expressed here by the solicitor general?
It certainly implicates foreign relations concerns.
Collyn Peddie: --Your Honor, I think that the -- well, let me answer this in two ways.
The first way is the policy considerations, either on our side or their side, are not due process issues.
And the second point that I was going to make was the idea that the due process clause doesn't trump the exercise of jurisdiction over the Petitioners here based on policy.
Instead, it has to be a showing of unfairness--
Chief Justice John G. Roberts: I thought your argument about outsourcing sounded an awful lot like a policy argument to me?
Collyn Peddie: --Well, it is a policy argument, but I think, Your Honor, that in all candor, I think we felt the need to -- to respond to the policy arguments of not just the government but also to the other side.
I would -- I would say, let me -- if I might complete -- complete the other thought, is that all of those considerations, as interesting as they are, as compelling as they may seem, you know, are not due process considerations.
This Court really isn't empowered to restrict the jurisdiction of State courts based on assisting the United States in negotiating trade treatise, instead it has to be based on unfairness and showing of undue burden.
With regard to -- getting back to the--
Justice Antonin Scalia: It's just not unfairness and undue burden.
It's a matter of what -- what power a sovereign has.
Collyn Peddie: --That's--
Justice Antonin Scalia: I mean, it could be perfectly fair if you announce that you're going to assert jurisdiction over anybody who harms an American citizen anywhere in the world, and you give notice to every manufacturer in the world, that would be perfectly fair.
But you have no power to do that under -- under accepted notions of what a sovereign can do.
Collyn Peddie: --And -- and it would be tempered by the -- the -- the burdens test that is articulated in Asahi and elsewhere, but none of that impacts, you know, policy considerations such as trade negotiations, et cetera.
And the focus has been fairness and balance of interests.
And here you have a -- a manufacturer and you have Petitioners who voluntarily participated in an enterprise that operates in the State here.
And we think that there's nothing unfair about -- when they agreed to deal with this, when they made money off of doing this, when they do this on an ongoing basis, there's nothing unfair about -- about subjecting them to liability there.
And particularly when you look at the Asahi factors, there's really no burden on the defendants here.
One of the things that the Petitioners did not respond to in our -- our brief is the notion that no matter what this Court decides, two of these Petitioners are going to be litigating in a foreign country anywhere.
And the only thing that they have interjected as a burden is the presumptive burden of litigating in another country.
They're going to be litigating in another country unless a court atomizes this case and says that the Petitioners have to litigate in four different states.
So there's nothing -- there's nothing to sort of suggest that there's -- there's any burden nor, therefore, a basis for restricting the jurisdiction of the North Carolina State courts based on due process concerns.
By contrast -- and the other thing that--
Justice Antonin Scalia: Only if you believe that burden is the only issue.
The issue is power, not just burden.
Collyn Peddie: --That's, that's correct, but the -- but at least this Court has said since Pennoyer v. Neff that the power is tempered only by the Due Process Clause, not about policy concerns.
And, so, it -- as -- as I think the Court is correct that it may be perfectly fair to announce this to the world, but it's up to this Court to determine whether due process would restrict the exercise of that power, and it does it on an enunciated set of factors, none of which includes assisting the United States in negotiating trade treaties.
The Petitioners, I think as we've suggested, have not really shown any sort of burden here, and they would be litigating with the same lawyers in the -- same lawyers in the same forum as their parent.
And the Court has observed that even the kinds of litigation that would take place, the burdens on litigating in a foreign -- foreign forum are much reduced, and that was in 1957, the year that I was born.
The primary objections here are based on trade.
I think it's -- it's interesting that the government has -- has talked about those, but I don't think that's a basis for restricting jurisdiction.
Justice Ruth Bader Ginsburg: Could you go back?
And you -- you said something about the two of them are subject to suit, you said this is a question of one lawsuit instead of four.
Collyn Peddie: Well, for example, the parent and the three Petitioners all have principal places of business in four different countries.
And we have general jurisdiction over the parent in the forum.
We have the same lawyers that are representing all the parties in the forum, and we intend to go forward in the--
Justice Ruth Bader Ginsburg: --What about France?
Collyn Peddie: --Well, in France the -- the Petitioners from Luxembourg and from Turkey, if they litigate in France, they're going to be litigating in a foreign country as well.
And, so, our question is why is it somehow more convenient to litigate in France than it is in the United States when you've got the same lawyers--
Justice Ruth Bader Ginsburg: It's not a question of more convenience.
It's a question that the claim arose there, and then, of course, just because the claim arose there, there would be some convenience factors.
All the witnesses to the accident are there, whatever is left of the bus is there.
Collyn Peddie: --Well, those -- those are the forum non-convenience issues that -- that a -- that a court would consider.
But I'm talking about the due process question in terms of investigating the -- the actual burden on the Petitioners in litigating in the forum.
And the only thing that they've really focused on is their preference for that forum, which is not a due process concern.
Chief Justice John G. Roberts: Thank you, counsel.
Mr. Feder, you have 5 minutes remaining.
REBUTTAL ARGUMENT OF MEIR FEDER ON BEHALF OF PETITIONERS
Mr. Feder: Thank you, Your Honor.
The purported integrated distribution that Respondents are pointing to as the basis for ignoring the corporate separation here, whatever else you could say about it and whether it's really any different from normal coordination, it only relates to the tiny fraction of Petitioners' business that involved tires going to the United States.
So -- where they didn't normally market their products -- and so, of course, everything that they sent to the United States was only when the U.S. affiliate reached out to get tires.
That does not -- under any theory of which I'm aware, even the most aggressive enterprise theory, that would not account for a basis for merging the two companies and treating parent and sub as if they were one.
As far as the hypothetical about China goes, I wanted to briefly address that.
Of course, to the extent that there are a lot of tires sent in from China or anywhere else to North Carolina or any other State, there will be specific jurisdiction most likely in those cases.
Our position here is simply that the fact that tires are coming in, of which you may have specific jurisdiction, is no basis to say that you can also bring in North Carolina what general jurisdiction would allow you to bring: claims from workplace accidents in China, lease disputes, and whatever else.
Justice Antonin Scalia: What about special jurisdiction?
Why don't -- why we decide this on the basis of special jurisdiction?
It's an accepted basis of jurisdiction.
Countries can make it a crime -- in fact I think Italy does, to kill an Italian citizen abroad, and that person can be tried for that crime in Italy.
So I assume that -- that that is an acceptable basis of jurisdiction.
So why don't we say that there's a specialized jurisdiction when a citizen of -- of North Carolina is -- is injured abroad, so long as there is, what -- what is the word?
The submission to the -- to the courts of North Carolina by having enough contacts with North Carolina.
The previous case, what's that crazy word?
Mr. Feder: Availment.
Justice Antonin Scalia: Availment.
I meant to look that up.
I'm not sure -- I'm not sure it's ever been used except in this courtroom.
Why -- why don't we decide it that way?
Mr. Feder: Well, Your Honor, I don't -- I don't think our law has a concept of special jurisdiction like that, as consistent with the Due Process Clause, and I think that even -- I won't purport to speak for the Respondents in the other case, but I think that they would probably agree that if the accident had happened to a New Jersey citizen in France, that that would not create, even under their stream-of-commerce theory jurisdiction.
Under our due process precedents, you need purposeful availment and for general jurisdiction, of course, you need quite a bit more than that.
And so while creative, I don't think that would quite carry the day.
Justice Ruth Bader Ginsburg: There is a country that has this -- what Justice Scalia -- France in the civil code says that any French citizen can sue anybody on any claim in France.
But we consider that an exorbitant jurisdictional rule.
Mr. Feder: We -- we do, Your Honor, and obviously we wouldn't recognize that under our Due Process Clause, and I think it points up some of the reasons why, at least at the margins, it is important to be able to negotiate treaties so that we can avoid having that sort of jurisdiction exercised against our citizens, just as within the European Community they have an agreement that it's not exercised within that community.
If there are no further questions--
Chief Justice John G. Roberts: Thank you, counsel.
The case is submitted.
Justice Ruth Bader Ginsburg: This case concerns the authority of a U.S. Court to hear a case against a foreign defendant based on an incident that occurred abroad.
The suit arose from a tragic accident, two 13-year old boys from North Carolina were on a soccer adventure in France.
A bus taking them to the airport for their journey home overturned outside Paris.
Both boys sustained fatal injuries.
Attributing the accident to a Goodyear tire that failed, the boy's parents commenced wrongful-death suits in a North Carolina State Court.
Named as -- as defendants were Goodyear USA and three foreign subsidiaries of that parent corporation, Goodyear Luxembourg, Goodyear France, and Goodyear Turkey.
The tire alleged to have caused the accident was made in Istanbul by Goodyear Turkey.
All three subsidiaries made tires designed for markets in Europe and Asian countries.
Their tire's differed in size and construction from tires ordinarily used in the United States.
Goodyear USA, an Ohio corporation that had plants in North Carolina and regularly engaged in commercial activity there, did not object to suit in that state.
The three European subsidiaries however, did object asserting their lack of connection to North Carolina.
The tires they made, they stressed, were geared to European and Asian road conditions, and was seldom sold to US buyers.
Because the accident occurred in France, and because the subsidiaries have no regular, and sustained North Carolina contacts, they urged that their subjection to the jurisdiction of North Carolina's Courts would be incompatible with the Due Process Clause of the Fourteenth Amendment.
Our pathmarking decision on questions of personal jurisdiction over nonresidents, compatible with due process, is a 1945 Opinion, International Shoe Company against Washington.
International Shoes sparked recognition of a distinction between general or all-purpose jurisdiction over a defendant, and specific case-linked jurisdictions.
A state court may assert general jurisdiction over a foreign corporation to hear any and all claims against the corporation if this condition is met.
The foreign corporation's affiliations with the State are so "continuous and systematic" as to render the corporation, not a stranger, but at home in the state.
Specific jurisdiction in contrast, depends on an "affiliation between the forum and the underlying controversy," principally, an activity or occurrence that takes place in the forum State.
A classic example, a nonresident drives her car into another state, and negligently causes an accident there.
She may never have entered the State before, yet she will be answerable there to persons injured in the accident.
Unlike general all-purpose jurisdiction, specific jurisdiction is confined to adjudication of the very controversy that establishes jurisdiction.
Because the bus accident that prompted the litigation occurred in France, and the tire that failed was made and sold abroad, North Carolina plainly lacked specific jurisdiction over the three European corporations.
The question for our decision is whether the foreign corporations are amenable to suit in North Carolina on a claim unrelated to any North Carolina activity of those corporations.
Confusing or blending general and specific jurisdiction inquiries, the North Carolina courts answered yes, the European manufacturers maybe sued in North Carolina because a small percentage of the tires they made were sold to North Carolina purchases.
We reverse that determination, the connections between the foreign corporations and North Carolina were hardly "continuous and systematic," they fall far short of the strong ties necessary to render North Carolina a place where the Goodyear subsidiaries are at home.
In the merits briefly filed in this Court, the plaintiffs urged -- urges to disregard the separate corporate organization and operations of Goodyear USA, and its foreign subsidiaries.
In other words, they asked us to pierce the corporate veils and treat all four defendants as a -- not as discreet entities, but as a "unitary business," so that jurisdiction over the parent, Goodyear USA, would draw in the subsidiaries as well.
Plaintiffs failed to raise that argument in the courts below or in their brief in opposite into certiorari.
They have therefore forfeited the argument, so we express no view on it.
The court's opinion is unanimous.