United States: SCOTUS Shortens The Reach Of Long-Arm Statutes

The Court has now made clear that general jurisdiction over a foreign (sister-state or foreign country) corporation requires affiliations establishing that the forum state is "home" to the corporation, and a specific jurisdiction analysis is not applicable to this decision.

International Shoe Co. v. Washington, 326 U. S. 310 (1945), was the canonical case that led to enactment of state long-arm statutes. The cases that followed "differentiated between general or all-purpose jurisdiction, and specific or case-linked jurisdiction." General jurisdiction means a court may hear any case against the corporate defendant just as though it had been incorporated in the forum state. Specific jurisdiction means a court may exercise jurisdiction over the defendant in the particular case before the court because the case arose out of activity of the corporate defendant in the forum state. Most decisions after International Shoe focused on specific jurisdiction, but with unpredictable results. More recently, unpredictability was spreading to general jurisdiction cases. In Daimler AG v. Bauman, 134 S. Ct. 746 (2014), and Goodyear Dunlop Tires Operations, S.A. v. Brown, 131 S. Ct. 2846 (2011), the Court tried to halt the trend and add predictability: neither a state nor a federal court may exercise general jurisdiction over a foreign (sister-state or foreign- country) corporation unless the corporation is essentially at home in the forum state.

In Goodyear, the Supreme Court reversed because the lower court, after "[c]onfusing or blending general and specific jurisdictional inquiries," had erroneously concluded that North Carolina had general jurisdiction over the defendant foreign corporations. A bus accident outside Paris resulted in the deaths of two boys from North Carolina. Their parents sued a US corporation and three of its foreign subsidiaries, claiming that tires designed or manufactured by one or more of the foreign subsidiaries were on the bus in France, were defective, and caused the accident. A small percentage of tires manufactured by the foreign subsidiaries were distributed in North Carolina. Using a "stream-of-commerce" analysis, the North Carolina Court of Appeals concluded the foreign subsidiaries were amenable to general jurisdiction.

The Supreme Court said the lower court's "stream-of-commerce analysis elided the essential difference between case-specific and all-purpose (general) jurisdiction." The Court added that ties which may bolster specific jurisdiction "do not warrant a determination that, based on those ties, the forum has general jurisdiction over a defendant."

Writing for a unanimous court, Justice Ginsburg explained the paradigms of general jurisdiction. For an individual, the paradigm forum for general jurisdiction is the individual's domicile. For a corporation, the paradigm fora are the states of incorporation and principal place of business—places in which the corporation is fairly regarded as "at home."

The issue arose again in Daimler AG v. Bauman. The Ninth Circuit had held that the federal district court in California could exercise general jurisdiction over Daimler, a German corporation with no presence in California. Plaintiffs were Argentinians who claimed that Daimler's Argentinian subsidiary had collaborated with state security forces to torture and kill some of the subsidiary's employees during Argentina's 1976–1983 "Dirty War."

Jurisdiction over Daimler was predicated on the California contacts of Mercedes-Benz USA, LLC (MBUSA), another Daimler subsidiary, incorporated in Delaware with its principal place of business in New Jersey. MBUSA distributed Daimler-manufactured vehicles to independent dealerships throughout the US, including California.

The Ninth Circuit concluded that Daimler's subsidiary, MBUSA, had "engaged in a substantial, continuous, and systematic course of business" in California such that MBUSA was subject to general jurisdiction in California. The Court attributed the contacts of MBUSA to its parent, Daimler, under an agency theory. Therefore, Daimler was also subject to general jurisdiction in California.

The Supreme Court reversed. It criticized the Ninth Circuit's agency theory, which was simply to ask whether the in-state subsidiary was performing services sufficiently important to the parent that if the subsidiary were not performing them, the parent would undertake to perform substantially similar services. The Supreme Court rejected this analysis saying it "stacks the deck, for it will always yield a pro-jurisdiction answer." Anything a corporation does through an independent contractor, subsidiary or distributor is presumably something that the corporation would accomplish by other means if these entities did not exist.

The Ninth Circuit's agency theory thus appears to subject foreign corporations to general jurisdiction whenever they have an in-state subsidiary or affiliate, an outcome that would sweep beyond even the "sprawling view of general jurisdiction" we rejected in Goodyear.

Beyond this, the Court returned to its central point, which was that regardless of what the subsidiary's contacts were and whether they could be attributed to the parent, it could not be said that the parent was at home in California. It noted that in Goodyear it had made clear that only a limited set of affiliations with a forum would create general jurisdiction. And the paradigmatic affiliations of incorporation and principal place of business "have the virtue of being unique and easily ascertainable."

The Court added that general jurisdiction is not always limited to the state(s) of incorporation and principal place of business. But it rejected the Ninth Circuit's erroneous and expansive formulation.

Plaintiffs would have us look beyond the exemplar bases Goodyear identified, and approve the exercise of general jurisdiction in every State in which a corporation "engages in a substantial, continuous, and systematic course of business"...That formulation, we hold, is unacceptably grasping.

It was error for the Ninth Circuit "to conclude that Daimler, even with MBUSA's contacts attributed to it, was at home in California, and hence subject to suit there on claims by foreign plaintiffs having nothing to do with anything that occurred or had its principal impact in California."

Daimler and Goodyear teach that general jurisdiction over a foreign (sister-state or foreign-country) corporation requires bases or affiliations establishing that the defendant is at home in the forum state. In making this determination, a specific jurisdiction analysis will not suffice.

Originally published July 2, 2014

This update is for information purposes only and should not be construed as legal advice on any specific facts or circumstances. Under the rules of the Supreme Judicial Court of Massachusetts, this material may be considered as advertising.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

In association with
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement

Mondaq.com (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of www.mondaq.com

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about Mondaq.com’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to unsubscribe@mondaq.com with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


From time to time Mondaq may send you emails promoting Mondaq services including new services. You may opt out of receiving such emails by clicking below.

*** If you do not wish to receive any future announcements of services offered by Mondaq you may opt out by clicking here .


This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to webmaster@mondaq.com.

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to EditorialAdvisor@mondaq.com.

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at enquiries@mondaq.com.

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at problems@mondaq.com and we will use commercially reasonable efforts to determine and correct the problem promptly.