Personal jurisdiction in a global world: the impact of the Supreme Court's decisions in Goodyear Dunlop Tires and Nicastro.

Author:Drobak, John N.
 
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Abstract

In June 2011 the Supreme Court decided two momentous personal jurisdiction cases: one, Goodyear Dunlop Tires Operations v. Brown, limited general jurisdiction to its rightful narrow role as a way to establish state court jurisdiction, while the other, J. McIntyre Machinery, Ltd. v. Nicastro, barely staved off a second attempt to narrow "stream of commerce" as a vehicle for jurisdiction. Although both cases made those valuable contributions to doctrine, they also denied a United States court to U.S. citizens who sued foreign defendants for torts, effectively leaving the plaintiffs without remedies for the allegedly negligent acts of the defendants. Goodyear Dunlop Tires involved an accident outside the United States, while Nicastro arose from an injury in New Jersey. With globalization bringing increased international business and travel, there is sure to be a significant increase in injuries suffered by U.S. citizens as a result of the negligent activities of foreign businesses and a resultant increase in the type of litigation involved in the two new cases. This Article critiques both cases and then examines whether non-citizens are protected by constitutional personal jurisdiction rights. Outside the context of personal jurisdiction, the Supreme Court has held since the nineteenth century that the scope of constitutional protections varies depending on two factors: whether a party is a citizen of the United States or a foreign national and whether a non-citizen resides in the United States or abroad. Without any real consideration, the Supreme Court in Goodyear Dunlop Tires and Nicastro applied the same personal jurisdiction law to non-citizen, non-resident defendants as it applies to defendants who are U.S. citizens. This Article argues that non-resident, non-citizen defendants are not protected by the constitutional personal jurisdiction law developed in domestic litigation. Freed from constitutional constraints, the Supreme Court has the ability to fashion a new law of personal jurisdiction for foreign defendants better suited for the tort claims of U.S. citizens, taking into account the interests of the U.S. plaintiffs. The Article provides a foundation for developing a new law of personal jurisdiction for foreign defendants.

INTRODUCTION

In June 2011 the Supreme Court decided two momentous personal jurisdiction cases: one wisely limited general jurisdiction to its rightful, narrow role as a way to establish state court jurisdiction, while the other barely staved off a second attempt to narrow "stream of commerce" as a vehicle for jurisdiction. Although both cases made those valuable contributions to doctrine, they also denied a United States court to U.S. citizens who sued foreign defendants for torts, effectively leaving the plaintiffs without remedies for the allegedly negligent acts of the defendants. The general jurisdiction case, Goodyear Dunlop Tires Operations v. Brown, (1) involved an accident outside the United States, while the stream of commerce case, J. McIntyre Machinery, Ltd. v. Nicastro, (2) arose from an injury in New Jersey. With globalization bringing increased international business and travel, there is sure to be a significant increase in injuries suffered by U.S. citizens as a result of the negligent activities of foreign businesses and a resultant increase in the type of litigation involved in the two new cases. Not only do the cases close off a forum in the United States, they also make it virtually impossible for these kinds of disputes to be resolved under U.S. tort law since the plaintiffs must sue in foreign courts. Effectively, Goodyear Dunlop Tires and Nicastro make it impossible for injured citizens to assert their tort rights, thereby violating the underlying purpose of procedural law to further, and not hinder, the application of substantive law.

This Article proceeds as follows: After explaining the Goodyear Dunlop Tires case, it discusses the general/specific jurisdiction model devised by Arthur von Mehren and Donald Trautman, (3) shows how subsequent cases departed from their original meaning of general jurisdiction, and then applauds Goodyear Dunlop Tires for clarifying the law and returning general jurisdiction to its intended limited form of jurisdiction. In Part II, the Article examines the two muddled opinions in Nicastro that led to the finding of a lack of jurisdiction and shows how the six Justices on those opinions misapplied precedent. Part III examines jurisdiction over foreign defendants by returning to the fundamental question of whether non-citizens are protected by constitutional rights. Outside the context of personal jurisdiction, the Supreme Court has held since the nineteenth century that the scope of constitutional protections varies depending on two factors: whether a party is a citizen of the United States or a foreign national and whether a non-citizen resides in the United States or abroad. (4) Without any real consideration, the Supreme Court in Goodyear Dunlop Tires and Nicastro applied the same personal jurisdiction law to non-citizen, non-resident defendants as it applies to defendants who are U.S. citizens. This essay argues that non-resident, noncitizen defendants are not protected by the constitutional personal jurisdiction law developed in domestic litigation. Freed from the constitutional constraints, the Supreme Court has the ability to fashion a new law of personal jurisdiction for foreign defendants better suited for the tort claims of U.S. citizens. Rather than concentrating solely on the defendant's activities and rights, this new law should incorporate a concern for U.S. workers and consumers who are injured by foreign businesses. It is one thing to require a New York resident to sue in a California court for a tort claim stemming from a defective product made in California. Regardless of a New York or California forum, the litigation will still be governed by some state's version of U.S. tort law. It is quite another to require the New York resident to sue in China for injuries suffered as a result of a defective good made in China, where the dispute would be governed by Chinese law. This Article attempts to provide a foundation for a new personal jurisdiction law that will be fairer to citizens of the United States.

  1. GENERAL JURISDICTION AND GOODYEAR DUNLOP TIRES OPERATIONS V. BROWN

    Goodyear Dunlop Tires grew out of a bus accident outside Paris. The bus overturned on its way to Charles de Gaulle airport as it was carrying youth soccer players on their trip home to North Carolina. (5) The parents of two thirteen-year-old boys who died brought a wrongful death action in state court in North Carolina against Goodyear USA and three foreign subsidiaries, which operated respectively in Turkey, France, and Luxemburg. (6) The complaint alleged that a defective tire manufactured in Turkey by Goodyear's Turkish subsidiary caused the accident. (7) In response to the motion by the three foreign subsidiaries to dismiss for a lack of personal jurisdiction, the North Carolina Court of Appeals ruled that jurisdiction existed under the theory of general jurisdiction.8 The court recognized that specific jurisdiction was lacking because the accident occurred in France and the tire was allegedly designed and manufactured negligently in Turkey. (9)

    The facts showed minimal connections between the three foreign subsidiaries and North Carolina. "They [had] no place of business, employees, or bank accounts in North Carolina." (10) Nor were they registered to do business there. (11) "[T]hey [did] not solicit business in North Carolina ... or ship tires to North Carolina customers." (12) The Supreme Court described their only connection to North Carolina as follows:

    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 ... was never distributed in North Carolina. (13) Personal jurisdiction had to stand or fall on the subsidiary's connections, not on Goodyear USA's connections, because the parents had belatedly raised the argument that Goodyear USA's connections to North Carolina were relevant to the personal jurisdiction issue. As the Court said, the parents "forfeited" the contention that the subsidiaries were part of a "single enterprise" with Goodyear USA by raising it for the first time on argument to the Court. (14) Given the meager connections between the subsidiaries and North Carolina, it was to be expected that a unanimous Court would hold that general jurisdiction was lacking. However, more important than the holding, the explanation of the general jurisdiction doctrine offered by Justice Ginsburg in her opinion for the Court and her analysis of the way the doctrine is to apply demonstrate a much narrower reach of general jurisdiction than many have thought.

    1. The General/Specific Jurisdiction Model of von Mehren and Trautman

      Arthur von Mehren and Donald Trautman devised a model of personal jurisdiction in 1966 that divided all assertions of jurisdiction into two categories they named general and specific jurisdiction. They explained their model as follows:

      In American thinking, affiliations between the forum and the underlying controversy normally support only the power to adjudicate with respect to issues deriving from, or connected with, the very controversy that establishes jurisdiction to adjudicate. This we call specific jurisdiction. On the other hand, American practice for the most part is to exercise power to adjudicate any kind of controversy when jurisdiction is based on relationships, direct or indirect, between the forum and...

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