State Court's General Jurisdiction over Foreign Defendant
Whether a foreign corporation is subject to general personal jurisdiction, on causes of action not arising out of or related to any contacts between it and the forum state, merely because other entities distribute in the forum state products placed in the stream of commerce by the defendant.
NCLC urged the Supreme Court to reverse a North Carolina appeals court judgment against a tire manufacturer for injuries sustained by North Carolina residents in France. The tire in question in this case was made in Turkey and sold in Europe, and few of the manufacturer's products are sold in North Carolina. In its brief, NCLC argued that the Due Process Clause does not support the exercise of general jurisdiction when a defendant simply places products into a stream of commerce. Rather the foreign defendant must be involved in substantial activity in the state, and the manufacturer's sale of other products in North Carolina does not meet this threshold. NCLC warned that the decision encourages forum shopping by foreign entities.
Previously, NCLC filed an amicus brief urging the Supreme Court to grant certiorari in the case.
The Supreme Court reversed the lower court and found that North Carolina is not a forum in which it would be permissible to subject the tire manufacture to general jurisdiction.
The Court held that the tire manufacturer lacked continuous and systematic general business contacts necessary to allow North Carolina to entertain a suit against them unrelated to anything that connects the manufacturer to the State. The Court noted that a corporation’s continuous activity of some sorts within a state is not enough to support the demand that the corporation be amenable to suits unrelated to that activity; a contrary holding would be inconsistent with precedent.
Furthermore, the Court agreed with NCLC that under the incorrect and sprawling view of general jurisdiction embraced by the lower court, any substantial manufacturer or seller of goods would be amenable to suit, on any claim for relief, wherever its products are distributed.
Amicus brief supporting cert. filed 8/13/10. Cert. granted 9/28/10. Amicus brief on the merits filed 11/19/10. Decided 6/27/2011.