United States: Guest Post – Corn, Justice Brandeis, Litigation Tourism And Dormant Commerce Clause Revisited

Last Updated: February 22 2018
Article by James Beck

Today's guest post is by friend of the blog Dick Dean, of Tucker Ellis. He had an interesting idea the last time he posted about personal jurisdiction, and he's following up with another one – this time rousing the previously dormant Commerce Clause. As always, our guest posters are 100% responsible (all credit and any blame) for the contents of their posts.

**********

Bexis and Kevin Hara recently posted a 50-state survey on consent by registration statues – specifically, analyzing which states have concluded that Daimler AG v. Bauman's due process holdings "trump" such consent statutes. See Dec 18, 2017 post. But besides due process, there is another argument to attack such statutes- the Dormant Commerce Clause. In Re Syngenta AG MIR 162 Corn Litigation, MDL No. 2591, 2016 WL 2866166, (D. Kan. May 17, 2016) (invalidating Kansas registration statute based on the Dormant Commerce Clause); see also my prior guest post, "Corn, Justice Brandeis, Litigation Tourism and the Dormant Commerce Clause." (July 5, 2016).

There is now a comprehensive article discussing these issues and, within that context, assessing whether registration statutes are constitutional under the Dormant Clause: J. Preis, "The Dormant Commerce Clause as a Limit on Personal Jurisdiction," 102 Iowa L. Rev. 121 (Nov. 2016). It is a must-read for those briefing the validity of consent statutes. The introduction comments on the interplay between Due Process and the Dormant Commerce Clause:

After standing in the background for so long, it is high time for the Dormant Commerce Clause to step forward. In recent years, the Supreme Court has issued a spate of major personal jurisdiction decisions. These decisions have set off a wave of commentary in the legal academy, but the questions raised by these new cases are not simply academic. At present, jurists across the country are wrestling with a new and vexing issue of personal jurisdiction: whether a company's registration to do business in a state amounts to consent to personal jurisdiction in that state. What no scholar or jurist has recognized, however, is that the Dormant Commerce Clause clarifies modern personal jurisdiction law in a way that the Due Process Clause, on its own, cannot.

Id. at 123-124

Briefly, the Dormant Commerce Clause provides that states may not interfere with commerce in other states. This is the flip side of the constitutional provision which says the Congress has the power to regulate commerce between the states. When it comes to general jurisdiction, out-of-state companies have an advantage over in-state companies – the ability to avoid suits unrelated to its activities in the State. The article examines various scenarios of citizenship and states of injury and whether they pass muster under the Dormant Commerce Clause. It concludes:

. . . [J]urisdiction-via-registration will be unconstitutional in suits brought by non-residents injured out of state. In those cases, the local benefit is completely absent and the burden on interstate commerce will be "clearly excessive in relation to the putative local benefits." In cases where the plaintiff is a resident or was injured in the state, however, a local benefit exists and jurisdiction-via-registration will be constitutional.

Id. at 147.

Not only does the Dormant Commerce Clause present serious obstacles for registration statutes which impact general jurisdiction, but it may offer an argument to bar cases where specific jurisdiction has been found based on very tenuous "connections" between plaintiff's injury and the forum state, such as the single-claim situation discussed in my (and Nick Janizeh's) prior post. If the Iowa Law Review article's conclusion that the Dormant Commerce Clause bars claims by non-residents not injured in the state holds true, then that premise transcends issues of general or specific jurisdiction. Put another way, even if there is general or specific jurisdiction over a defendant, there may still be a defense on the merits based on the Dormant Commerce Clause. The Dormant Commerce Clause is a separate concept from jurisdiction and must be evaluated separately. Comptroller of Treasury of Maryland v. Wynne, 135 S.Ct 1787, 1798-99 (2015). And of course, that is the clear holding of In re Syngenta, which found a consent-by-registration statute passed due process muster but not Dormant Commerce Clause muster. Thus, even though the Beck & Hara blog suggested that Kansas was a "murky" state on where it stood on the due process issue, it remains clear that consent-by-registration fails in Kansas because the federal court rejected the statute on Dormant Commerce Clause grounds. This is an important argument available in the continuing saga of litigation tourism.

[Editor's note: This dormant commerce clause argument could be particularly useful in Pennsylvania, not just because of the peculiar challenge of the Commonwealth's registration statute, but also because of yesterday's "let anybody sue" decision from the Pennsylvania Supreme Court allowing litigation tourists from anywhere to assert the Pennsylvania consumer protection statute against Pennsylvania companies no matter where the transaction occurred.]

This article is presented for informational purposes only and is not intended to constitute legal advice.

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.

Authors
James Beck
 
In association with
Related Topics
 
Related Articles
 
Related Video
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
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
Password
Confirm Password
Position
Mondaq Topics -- Select your Interests
 Accounting
 Anti-trust
 Commercial
 Compliance
 Consumer
 Criminal
 Employment
 Energy
 Environment
 Family
 Finance
 Government
 Healthcare
 Immigration
 Insolvency
 Insurance
 International
 IP
 Law Performance
 Law Practice
 Litigation
 Media & IT
 Privacy
 Real Estate
 Strategy
 Tax
 Technology
 Transport
 Wealth Mgt
Regions
Africa
Asia
Asia Pacific
Australasia
Canada
Caribbean
Europe
European Union
Latin America
Middle East
U.K.
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

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 or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.

Disclaimer

The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq 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 of the Content or performance of Mondaq’s Services.

General

Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions