U.S. Supreme Court Reaffirms Stringent Test for General Jurisdiction over Foreign Manufacturers

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In Goodyear Dunlop Tires Operations, S.A. v. Brown, decided on June 27, 2011, a unanimous U.S. Supreme Court reaffirmed the distinction between general and specific jurisdiction, holding that certain foreign subsidiaries of tire manufacturer Goodyear Tire and Rubber Company ("Goodyear USA") were not subject to personal jurisdiction in North Carolina to defend products liability claims arising from a bus accident in France, allegedly caused by a defective tire manufactured and sold by non-U.S. entities of Goodyear.

In Goodyear, the plaintiff's decedents—two 13-year-old boys returning from a trip to France with their soccer team—were killed when their bus overturned in an accident outside of Paris, France, allegedly due to defects in the tires manufactured and sold by the foreign Goodyear entities. Those defendants were incorporated in Luxembourg, Turkey and France; and they were indirect subsidiaries of Goodyear USA, an Ohio corporation also named as a defendant. The foreign entities manufactured tires primarily for sale in European and Asian markets; had no place of business, employees or bank accounts in North Carolina; and did not design, manufacture, advertise, solicit business, or themselves sell or ship tires in or to North Carolina. Nevertheless, a small percentage of the foreign entities' tires—tens of thousands out of tens of millions manufactured between 2004 and 2007—were distributed within North Carolina by other Goodyear affiliates.

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Published In: Civil Procedure Updates, General Business Updates, Constitutional Law Updates, International Trade Updates, Products Liability Updates

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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