Business Registration = Personal Jurisdiction? The U.S. Supreme Court Again Considers Where Corporations Can Be Sued
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 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 .
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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.
