Opinion ID: 3170828
Heading Depth: 3
Heading Rank: 1

Heading: The Supreme Court and the Goodyear standard

Text: In Goodyear, the Supreme Court explained, “[a] court may assert general jurisdiction over foreign (sister-state or foreign-country) corporations to hear any and all claims against them when their affiliations with the State are so continuous and systematic as to render them essentially at home in the forum State.” 131 S. Ct. at 2851 -7- (quotations omitted). The Goodyear standard was not new; it summarized a longstanding jurisdictional rule. See, e.g., Int’l Shoe, 326 U.S. at 318 (“[T]here have been instances in which the continuous corporate operations within a state were thought so substantial and of such a nature as to justify suit against it on causes of action arising from dealings entirely distinct from those activities.”). Before Goodyear, the Supreme Court applied the general jurisdiction standard in two cases, finding a proper exercise of general jurisdiction in one and an improper exercise in the other. First, in Perkins v. Benguet Consolidated Mining Co., 342 U.S. 437 (1952), the Supreme Court held an Ohio state court could properly exercise general jurisdiction over Benguet, a mining company incorporated in the Philippines. Id. at 438, 446. Benguet owned and operated mining properties in the Philippines and owned no mining properties in Ohio. Id. at 447-48. Mining operations ceased during the Japanese occupation of the Philippines. Id. at 447. During that time, Benguet’s president—who was also the company’s general manager and principal stockholder—temporarily moved to Ohio. Id. at 447. He maintained an office in Ohio, where he stored company files and conducted company business. Id. at 447-48. He corresponded about company business—including supervising the rehabilitation of the company’s properties in the Philippines—and drew and distributed salary checks from the office. Id. at 448. He used two Ohio-based bank accounts for company funds and an Ohio bank as the transfer agent for company stock. Id. He also held several directors’ meetings at his home or office in Ohio. Id. In short, the president supervised and managed Benguet from Ohio during the wartime occupation -8- of the company’s properties. Id. The Court concluded these activities were sufficient to allow an Ohio court to assert general jurisdiction over the corporation without violating due process. Id. Second, in Helicopteros, the Supreme Court held a foreign corporation’s activities in Texas were insufficient to allow Texas state courts to exercise general jurisdiction over the corporation. Helicopteros, 466 U.S. at 418-19. Helicopteros was a Colombian corporation with its principal place of business in Bogotá. It provided helicopter transportation for oil and construction companies in South America. Id. at 409. One of its helicopters crashed in Peru, killing four passengers who were employed by a Texasbased oil consortium involved in a Peruvian pipeline. Id. at 409-10. The decedents’ survivors and representatives attempted to sue the Colombian corporation in Texas state court. Id. at 410, 412. Helicopteros had no place of business in Texas and had never been licensed to do business in Texas. Id. at 416. Its CEO once flew to Texas for contract negotiations with the consortium. Id. at 410. But the contract was ultimately formalized in Peru, was written in Spanish on official Peruvian government stationery, indicated that all relevant parties would reside in Peru, provided that controversies arising from the contract would be submitted to Peruvian courts, and stipulated that payments under the contract would be made through Bank of America in New York City. Id. at 410-11. Helicopteros did have some contacts with the forum. It purchased $4 million worth of helicopters and helicopter parts from a Texas supplier, sent prospective pilots to Texas for training and to retrieve the helicopters, and sent management and maintenance -9- personnel to Texas for training and consultation. Id. at 411. Finally, it received $5 million in payments from the consortium drawn on a Texas bank. Id. The Supreme Court considered each of Helicopteros’s contacts with the forum state and concluded they were each too isolated and inconsequential to allow a Texas court to exercise general jurisdiction over the corporation. Id. at 415-18 & n.12.