Carnaby v. Goodyear Offers a New Jurisdictional Twist

AMERICAN BAR ASSOCIATION – SECTION OF LITIGATION – MASS TORTS  

The Carnaby v. Goodyear Tire and Rubber Co. action involving purported toxic workplace exposures in France presents something of a new strategic paradigm for the U.S. jurisdictional restrictions evolving out of the Daimler/Kiobel/Goodyear Dunlop line of cases. Carnaby v. Goodyear Tire and Rubber Co., No. 5:14-CV-0100-JRA (N.D. Ohio, filed May 8, 2014, amended complaint filed Sept. 15, 2014). The action is a putative class action alleging injuries suffered by workers as a result of exposure to toxic substances at a French tire factory operated by the foreign subsidiary of the named defendant. At first glance, such a case would seem to fall outside the jurisdiction of the U.S. courts, under the limitations imposed by recent U.S. Supreme Court precedents over U.S. parents for operations of a foreign subsidiary. The plaintiffs have focused their allegations on the parent’s conduct in deciding on product formulas, production processes, and the chemicals used in the subsidiary’s operations. So, for example, plaintiffs allege that

[i]n order to produce tires of even quality in all its factories, Goodyear in Akron routinely: (a) models processes of rubber mixing, extrusion, heat transfer and rubber curing for all manufacturing sites of Goodyear . . . (b) develops analytical solutions to operational problems likely to occur during the manufacturing process for all manufacturing sites of Goodyear . . . (c) . . . establishes design and operating guidelines or recommendations for all manufacturing sites of Goodyear . . . (d) issues security recommendations in relation to the manufacturing process and issues OSHA compliance guidelines, for all manufacturing sites of Goodyear. 

(First Amended Complaint, ¶ 33). The plaintiffs also contend that the parent Goodyear implemented and controlled a global environmental, health, and safety policy. (First Amended Complaint, ¶¶ 49–54). 

Goodyear moved to dismiss the amended complaint for failure to state a cause of action against it as the parent, and on grounds of forum non conveniens, in favor of France, which presents an intriguing twist in the jurisdictional tactics in such foreign operations (or product) cases. From a strategic standpoint, the transfer of a mass toxic-tort case from the U.S. to a foreign venue has both upsides and downsides for both plaintiffs and defendants. On one hand, the foreign venue is unlikely to provide for a class action; civil-law jurisdictions, such as France, do not have jury trials in tort actions; and the foreign court is likely to award lower damages compared to a U.S. outcome. On the other hand, discovery is generally unavailable in civil-law jurisdictions and causation standards tend to be more lax, perhaps providing plaintiffs with a better chance to prevail; and even though a class action might be avoided, the defendant might face some sort of consolidated action without the benefit of the types of case-management devices employed in the U.S. courts. Note that the balancing of these considerations will necessarily differ among international fora. 

The results of the motion practice (and possible appeals) in Carnaby bear watching as insight to a potential new “jurisdiction” paradigm for mass toxic torts, an end-run around the Daimler-like limitations on jurisdiction over the parent, and the efficacy of a forum non conveniens strategy to confront it. 

UPDATE 3/6/2015: We note that on February 26, 2015, in Finerty v. Abex Corp., 2015 NY Slip Op 01709, the New York Appellate Division, First Department, rejected the U.S. parent automaker’s attempt to dismiss claims for asbestos injuries alleged by an Irish mechanic for failure to state a cause of action, finding that “the record demonstrates that Ford USA acted as the global guardian of the Ford brand, having a substantial role in the design, development, and use of the auto parts distributed by Ford UK, with the apparent goal of the complete standardization of all products worldwide that carried the signature Ford logo.” The Appellate Division thus concluded that issues of fact existed as to the parent’s direct liability for its role in “facilitating the distribution of the asbestos-containing auto parts” and satisfaction of its duties to warn and to provide for safe products.

© 2015 by the American Bar Association. Reproduced with permission. All rights reserved. This information or any portion thereof may not be copied or disseminated in any form or by any means or stored in an electronic database or retrieval system without the express written consent of the American Bar Association.