Background Before Goodyear

In Goodyear Dunlop Tires Operations, S.A. v. Brown (2011), the Supreme Court held that a court may hear any and all claims against a foreign corporation only when the corporation’s affiliations with the state are so continuous and systematic as to make it essentially at home there.¹ The holding reads as a correction, because it displaced an understanding of general jurisdiction that lower courts had built up over decades. To see what was corrected, you need to know how little the Supreme Court had said beforehand and how the lower courts filled the silence.

After International Shoe Co. v. Washington, the Court decided few corporate general-jurisdiction cases. Two matter here: Perkins upheld jurisdiction over a foreign corporation, and Helicopteros refused it. International Shoe had said that “continuous and systematic” contacts could suffice,² but that phrase names a quality without a measure. It does not say how much activity is enough or how to weigh it, and a great deal of ordinary corporate activity falls between the two decisions. Many lower courts filled the gap with a doing-business reading: a company that conducts substantial, regular business in a state answers there on any claim. The reading was easy to apply because it asks only how much the defendant does in the forum, and it favored plaintiffs because a large company does a lot of business in many states at once.

Goodyear and its successors cut that generosity back. If all-purpose jurisdiction attaches wherever a company does a lot of business, a national manufacturer or retailer can be sued on any claim in every state where it sells. The claim stops mattering in all of those places, and the line between general and specific jurisdiction drawn at the start of this chapter disappears. Goodyear answered by placing general jurisdiction at the corporation’s home. Daimler AG v. Bauman (2014) named the place of incorporation and the principal place of business as paradigm forums and called the plaintiffs’ “substantial, continuous, and systematic course of business” formulation unacceptably grasping.³ BNSF Railway Co. v. Tyrrell (2017) confirmed that a corporation is not subject to general jurisdiction in a state merely because it does substantial business there.⁴ The subsections below take the background in order: Perkins, the decision that upheld general jurisdiction over a foreign corporation; Helicopteros, which refused it; and the doing-business doctrine that grew in the space between them.

Perkins and the Corporate Exile

Perkins v. Benguet Consolidated Mining Co. (1952) remains, in words Goodyear borrowed from a lower court, “[t]he textbook case of general jurisdiction appropriately exercised over a foreign corporation that has not consented to suit in the forum.”⁵ The defendant was a mining company based in the Philippines whose mining operations there were halted by the Japanese occupation during World War II.⁶ A shareholder sued it in Ohio, claiming that it had failed to pay dividends and issue stock to which she was entitled, and none of the activity behind that claim occurred in Ohio.⁷ With no tie between the claim and the forum, specific jurisdiction was unavailable, and Ohio’s power to hear the case had to rest on the company’s own relationship with Ohio. The Court held that due process allowed Ohio to adjudicate the controversy.⁸

Ohio was where the company’s remaining business happened. The president kept an office there, stored the corporate files, and held directors’ meetings.⁹ From that office, in language Daimler quoted from the original opinion, he “supervised policies dealing with the rehabilitation of the corporation’s properties in the Philippines and . . . dispatched funds to cover purchases of machinery for such rehabilitation.”¹⁰ The occupation had shut down the Philippine mines, so all of the company’s activities were being directed from Ohio.¹¹

That is why the later cases treat Ohio as a stand-in for the company’s missing home. Daimler said that, given the wartime circumstances, Ohio could be considered “a surrogate for the place of incorporation or head office,”¹² and Goodyear, quoting an earlier decision, called Ohio “the corporation’s principal, if temporary, place of business.”¹³ A corporation has no body and no residence of its own, so a court looking for its home asks where the corporation actually runs its affairs. In ordinary times the answer is the place of incorporation or the headquarters. When the occupation took away the ordinary center, the company’s home in practical terms moved to Ohio. The justification therefore describes the defendant’s tie to the forum and says nothing about the claim, which is the kind of justification general jurisdiction requires.

One phrase in the original opinion invites a misreading. Perkins called the Ohio activity a “continuous and systematic, but limited, part of its general business,” and a student may hear “limited” as permission to find general jurisdiction on a modest slice of a company’s operations.¹⁴ Daimler answered that the Court had in mind the shrinkage of the whole enterprise, since the occupation had shut the Philippine mines, and that no fair reader of Perkins could conclude that Ohio was anything other than the center of the company’s wartime activities.¹⁵

Perkins reaches less far than its prominence suggests. The decision offers no hint whether a lesser, but still substantial, quantum of Ohio activity would have sufficed, and it may be limited to circumstances in which no reasonable alternative forum is available.¹⁶ Daimler later cited Perkins as the example of the exceptional case in which a corporation is at home somewhere other than its place of incorporation or principal place of business, a category taken up under The Exceptional Case below.¹⁷

What carried Perkins was a collapse of the company’s usual center and a relocation of its entire remaining business to the forum. Neither feature appears in the shipping hypothetical. Outside such circumstances, general jurisdiction over a corporation exists only at its place of incorporation or principal place of business.¹⁹

Helicopteros and Mere Purchases

Helicopteros Nacionales de Colombia, S.A. v. Hall (1984) is the counterpoint to Perkins. Survivors of United States citizens killed in a helicopter crash in Peru brought wrongful-death actions in a Texas state court against the helicopter’s owner and operator, a Colombian corporation with no place of business in Texas and no license to do business there.²¹ The Texas courts found jurisdiction and upheld a substantial verdict for the plaintiffs.²²

The operator’s Texas contacts were large in volume. Its chief executive visited Houston for a contract-negotiation session, and the transportation contract behind the crash had been negotiated in Texas with a Texas-based joint venture. It accepted checks drawn on a Houston bank and deposited them in its New York account. It bought about 80 percent of its helicopters and spare parts from a Texas supplier for substantial sums, and it sent personnel, including prospective pilots, to Texas for training.²³

The Court held that these links fell short of the “continuous and systematic general business contacts” found in Perkins, and it stated the lesson in a sentence later cases quote: “mere purchases [made in the forum State], even if occurring at regular intervals, are not enough to warrant a State’s assertion of [general] jurisdiction over a nonresident corporation in a cause of action not related to those purchase transactions.”²⁴ Put another way, regular contacts were not enough; the contacts had to be more extensive.²⁵

The two cases differ in kind, not in dollars. The Texas purchases were substantial, yet the operator had no place of business or license in Texas and dealt with Texas counterparties from outside the state, so its visits and trips were episodes rather than a standing presence. The Perkins company, by contrast, directed all of its remaining business from Ohio, and Goodyear drew the same line when it observed that the Perkins defendant’s sole wartime business activity was conducted in Ohio.²⁶ Courts applying the doctrine in the years after Helicopteros gave weight to that kind of continuing physical presence, usually an office or employees, and treated sales, solicitation, and advertising as less likely to be continuous and systematic.²⁷

Purchases fall short because of what general jurisdiction is meant to capture. A buyer in a state is a customer of that state’s economy, and the state’s connection is to the transaction, not to the rest of the buyer’s affairs. If regular purchases were enough, nearly every business of any size would answer on any claim in every state where it buys supplies, and the line between general and specific jurisdiction would vanish. Goodyear drew that consequence when it refused to distinguish the sporadic sales of its tires made in North Carolina through intermediaries from the Texas ties in Helicopteros: the broader view would expose any substantial manufacturer or seller of goods to suit on any claim wherever its products are distributed.²⁸ A steady flow of dollars shows how much the defendant deals with the forum. General jurisdiction asks where the defendant is at home, and a company that buys heavily in a state while running its business elsewhere is not at home where it shops.

The case reached the Court as a general-jurisdiction problem only because of how the plaintiffs framed it. The Court construed the plaintiffs’ brief to concede that the Texas contacts were unrelated to the claim, and having treated them as unrelated, it found them insufficient.²⁹ Everything the decision says about purchases therefore depends on the claim having no connection to them. Specific jurisdiction asks the other question: whether the suit arises out of or relates to the defendant’s contacts with the forum.³⁰

An exam stem that lists regular purchases, training trips, and a negotiation visit invites a tally of contacts, and the tally is the wrong first step. Ask first whether the claim arises out of or relates to those contacts. If it does, the problem is one of specific jurisdiction, and the purchases belong in that analysis.³² If it does not, as in the Peruvian crash suit, the only question left is whether the forum is where the defendant is at home, and heavy buying does not answer it. Goodyear’s treatment of products flowing into a state, taken up in the next section, applies the same sorting. First comes the lower-court doctrine that grew up between Perkins and Helicopteros and that Goodyear reined in.

The Doing-Business Era

Before Goodyear, lower courts tested general jurisdiction over a corporation by asking whether it was doing business in the state. A corporation has no body, so a court cannot ask whether it is standing in the state the way it can with an individual. The doing-business test supplied a substitute: a corporation that carries on business in the state regularly, day to day, is treated as present there and is as amenable to suit as a person standing in the state would be.³⁴ Presence of that kind supported jurisdiction even over claims with no relationship to the state, the category later labeled general jurisdiction.³⁵

The test flourished because the Supreme Court’s own formula gave so little guidance. International Shoe’s statement that “continuous and systematic” contacts could suffice led lower courts to allow jurisdiction on rather slender connections to the forum,³⁶ and most courts assumed that general jurisdiction existed whenever the defendant merely had continuous and systematic contacts there.³⁷ Practice was not uniform. Lacking much guidance from the Supreme Court, some courts stayed cautious. They looked for a continuing physical presence such as an office or employees, reserved general jurisdiction for facts resembling Perkins, and treated sales, solicitation, and advertising as weaker contacts.³⁸ Others approved jurisdiction based on extensive in-state facilities, employees, and sales.³⁹ A formula that measures the volume of activity yields general jurisdiction wherever that activity is regular and large.

Bryant, a 1965 New York decision, shows how far the formula reached. A plaintiff was injured in a Paris airport through a foreign airline’s alleged negligence, and the court upheld jurisdiction over the airline on the strength of a one-and-a-half-room New York office staffed by a handful of employees who promoted the airline and took and forwarded reservations.⁴⁰ The claim had no connection to New York, so the office carried the entire case. The office was permanent, staffed, and active every day, which satisfied a test built on regularity and volume. It was nonetheless a small outpost of a foreign airline, and that sets Bryant apart from Perkins, where the Ohio office was the place from which the president directed all of the company’s remaining wartime business.⁴¹ Bryant’s result could not be sustained today. In Goodyear the Court refused to let North Carolina courts take jurisdiction over foreign tire manufacturers in a suit over an accident abroad that killed two boys playing in a soccer tournament, even though some of the manufacturers’ tires reached North Carolina through intermediaries.⁴²

The same logic produced a widespread assumption about the largest companies: that national corporations such as Exxon Mobil or Walmart were probably subject to general jurisdiction in every state, because their activities are extensive in every state. On that view, a plaintiff hit by an Exxon Mobil truck in Wisconsin could sue Exxon Mobil in California on the strength of its California business. Daimler AG v. Bauman rejected that reasoning and held that general jurisdiction over a corporation is usually appropriate only in the states where it is at home, meaning its state of incorporation and its principal place of business.⁴³

The practical objection to the older view was forum shopping. If general jurisdiction attaches wherever business is substantial, a large company is suable in many states at once, and plaintiffs can choose among them for reasons that have nothing to do with the dispute. Commentators pointed out that allowing general jurisdiction over corporate defendants on unrelated business contacts created exactly that incentive.⁴⁴ Limiting general jurisdiction to the forum where the defendant is essentially at home reads as an effort to remove that opportunity, because plaintiffs can no longer file in a forum with no connection to the litigation.⁴⁵

For exam purposes, the doing-business era works as a warning label. Cases and study materials that find general jurisdiction because a company has offices, employees, regular sales, or substantial business in a state rest on a test the Court has since displaced. Goodyear signaled that continuous and systematic contacts no longer sufficed and that the defendant had to be effectively at home in the forum.⁴⁶ BNSF Railway Co. v. Tyrrell confirmed that substantial business in a state does not, by itself, make a corporation subject to general jurisdiction there.⁴⁷ The next section turns to Goodyear itself, its facts, and the at-home standard it announced.