The Supreme Court Reins in “Stream of Commerce” Personal Jurisdiction


In the last two Supreme Court cases we have been following this term, the Court took a critical look at the stream of commerce basis for personal jurisdiction and, as we hoped (and expected), ruled in defendants favor in both. We discussed both lower court decisions in our prior post Personal Jurisdiction — A Primer which criticizes those decisions as extreme expansions of corporate personal jurisdiction which potentially could have resulted in product manufacturers being sued anywhere over anything. Fortunately, the Supreme Court also thought both cases went too far – although it appears to have been a closer call in the context of specific jurisdiction.

Goodyear – Stream of Commerce Doesn’t Create General Jurisdiction

In a unanimous decision authored by Justice Ginsburg (who, by the way, authored the dissent in Nicastro), the Court found that the stream of commerce theory was an “inadequate basis for the exercise of general jurisdiction” and limited its application to specific jurisdiction. Goodyear v. Brown, No. 10-76, slip op. (U.S. June 27, 2011). While our earlier post also has a more detailed discussion of specific v. general jurisdiction, here is how the Court explained the distinction in Goodyear. General jurisdiction allows a court to hear any claims in any matter about anything against a defendant because the defendant’s “affiliations with the State are so “continuous and systematic” as to render them essentially at home in the forum State. Slip op. at 2.

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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