Goodyear Luxembourg Tires v. Brown

What’s at stake?
Holding companies responsible for defective products.  

Issue:
Whether a foreign corporation that exports tens of thousands of products into a state through a highly organized distribution process can be sued in state court in a products liability case.

Decision date:
June 27, 2011  

Outcome:
9-0 in favor of Goodyear.  Justice Ginsburg delivered the opinion.

What the court held:
In a unanimous decision, the Corporate Court limited the ability of individuals harmed by defective foreign products to hold manufacturers accountable for their negligence.  Two 13-year-old children from North Carolina died in a bus accident while on a soccer trip to Paris, France. French investigators determined that a defective Goodyear tire on the bus caused the accident. The children’s surviving relatives sued three foreign Goodyear affiliates in a North Carolina court.  The three affiliates collectively export at least 44,000 tires to North Carolina each year. The North Carolina Court of Appeals determined that Goodyear’s highly organized international distribution process constitutes such a purposeful injection into North Carolina’s stream of commerce that the state’s courts have general jurisdiction over the companies.  As a result, the court held, the surviving family members should be allowed to sue the companies in North Carolina. 

The Supreme Court reversed and held that the Goodyear affiliates’ lack of a connection to North Carolina precluded state courts from exercising general jurisdiction.  The Court stated that the companies’ connections to the state “fall far short of 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.”  As a result, the companies will be allowed to make profits in a state, but individuals harmed by their negligence will be incapable of seeking compensation from the companies in that state.  It will now be easier for sophisticated foreign companies whose products reach into all regions of the U.S. to escape justice for the injuries their defective products cause.

Merit briefs:

• Brief for Petitioner Goodyear Luxembourg Tires, S.A., Goodyear Lastikleri, T.A.S., and Goodyear Dunlop Tires France, S.A.
• Brief for Respondent Edgar Brown and Pamila Brown, Co-Administrators of the Estate of Julian David Brown, and Karen M. Helms, Administratrix of the Estate of Matthew M. Helms.
• Reply Brief for Petitioner Goodyear Luxembourg Tires, S.A., Goodyear Lastikleri, T.A.S., and Goodyear Dunlop Tires France, S.A.

Amicus briefs:

• Brief for the Product Liability Advisory Council in Support Petitioner
• Brief for the United States of America in Support Petitioner
• Brief for the Chamber of Commerce of the United States of America in Support of Petitioner
• Brief for the Washington Legal Foundation and the Allied Education Foundation in Support of Petitioners
• Brief for the Organization for International Investment and the Association of International Automobile Manufacturers in Support of Petitioners