United States:
Business Registration = Personal Jurisdiction? The U.S. Supreme Court Again Considers Where Corporations Can Be Sued
15 November 2022
Foley & Lardner
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As the United States Supreme Court again considers the issue of
where corporations can be subject to personal jurisdiction, one
question arising at oral argument seemed to suggest that if the
company didn't want to be sued in that state, it shouldn't
do any business there. But can that be right?
The touchstone of recent Supreme Court decisions on personal
jurisdiction over corporations (which, by and large, have
restricted prior jurisdictional regimes) seems to be a higher
standard for connection between the company and the lawsuit. The
Supreme Court has required a high bar of "continuous and
systematic" contacts to suffice for general personal
jurisdiction, and, for specific personal jurisdiction, requiring
sufficient connection between the plaintiff's claims and the
defendant's activities in that state. That is a very different
inquiry than merely asking whether a corporation is registered to
do business in that state (as many companies are in most, if not
all, states) and finding that sufficient for jurisdiction, without
regard to the plaintiff's claims, or as in the case the Court
is considering, having a state require consent to
jurisdiction as a condition of registration. It will be interesting
to see the Court's decision next Spring.
Justice Samuel Alito said that while Norfolk Southern is a big
corporation with the means to handle litigation anywhere in the
country, smaller companies that have to register in order to ship a
few items per year into Pennsylvania might not have the same means.
Keller responded that those smaller businesses had to make a choice
between taking advantage of Pennsylvania markets or ducking
Pennsylvania courts, and tried to assuage Justice Elena Kagan's
worry that a ruling in Mallory's favor would "gut"
2014's Daimler AG v. Bauman and 2011's Goodyear Dunlop
Tires Operations SA v. Brown . Corporations, Keller said, were free
to pick and choose which states they did business with and to what
extent, pointing to companies that said they would cut back on
dealings in states whose governments enacted controversial
policies.
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