Home Is Where the Forum State Legislates It Is: Pennsylvania Courts Find “Consent” to General Jurisdiction When Companies Register to Do Business There
We have written extensively on this blog about personal jurisdiction and how the U.S. Supreme Court’s decision in Bristol-Myers Squibb Co. v. Superior Court of California changed the rules regarding specific jurisdiction.
This post focuses on something different: the doctrine of general jurisdiction, which the Court has acknowledged as the less frequently litigated of the two personal jurisdiction doctrines. While specific jurisdiction involves a company’s venture into foreign territories and well-known buzzwords (like “minimum contacts” and “stream of commerce”), general jurisdiction has all of the excitement of a night in on the couch—it applies where a company is “at home.”
With the two-year anniversary of Bristol-Myers coming up in June, we will look at how courts in “plaintiff-friendly” jurisdictions have applied the Court’s instructions regarding specific jurisdiction.
In 2014, the Court roused general jurisdiction jurisprudence from its extended nap in Daimler AG v. Bauman, streamlining how courts determine whether they have general jurisdiction over a company. General jurisdiction exists when a company is either headquartered or incorporated in the forum state, or in an “exceptional case,” when the company has made itself at home in the forum state.
Here, we look at two recent Pennsylvania state appellate court decisions holding that Pennsylvania courts had general jurisdiction over companies that were neither incorporated nor headquartered in that state, but that simply had registered to do business there.
The decisions highlight that companies should pay close attention to the jurisdictional rules in states in which they operate, because rules about when personal jurisdiction exists may vary.
How We Got Here: Taking a Wrong Turn After Daimler
In Daimler, the Court recognized two places where a corporation is “at home” for general jurisdiction: where it is incorporated and where it is headquartered. The Court then went a step further and determined that a company could also be at home in a state where it has a “continuous and systematic” presence. But the Court noted that those circumstances arise only in “exceptional cases.” To illustrate the point, the Court cited its 1952 decision in Perkins v. Benguet Mining Co., where it held that an Ohio state court had general jurisdiction over a mining corporation based in the Philippines when it temporarily ceased its foreign operations and relocated its headquarters to Ohio during World War II.
The two recent Pennsylvania state appellate cases concluded that Pennsylvania courts have general jurisdiction over companies registered to do business in Pennsylvania, even if they are not headquartered or incorporated there. In Webb-Benjamin LLC v. International Rug Group LLC and Murray v. American LaFrance, both companies complied with Pennsylvania’s statutory requirement that foreign businesses register with the Pennsylvania Department of State before conducting business in the state.
Although registering to do business in a state has not typically been enough to create personal jurisdiction over a corporate defendant, the Pennsylvania courts in these cases decided that a company’s registration amounted to “consent” by that company to defend itself in Pennsylvania, thereby establishing jurisdiction.
Though the foreign business registration statute itself does not mention jurisdiction, these courts read the statute in combination with Pennsylvania’s long-arm statute, which provides that Pennsylvania courts have personal jurisdiction over corporations “qualifi[ed] as foreign corporations under the laws of this Commonwealth.” The Webb-Benjamin court concluded that Daimler permitted “general jurisdiction by consent” and that it was constitutionally permissible for the state legislatures to vest their courts with general jurisdiction when companies consented by registering to do business there.
Despite these recent cases, Pennsylvania law may still be unsettled. One of the decisions has been withdrawn as a result of the Pennsylvania appellate court granting en banc re-argument over the personal jurisdiction issue. The other decision remains good law and may remain so even longer if the en banc appeal makes its way to the Pennsylvania Supreme Court. Nonetheless, these decisions place Pennsylvania law in conflict with other states that have rejected similar arguments (such as Oregon and Missouri, as we discussed here), creating the potential for this issue to make its way to the U.S. Supreme Court.
If You’re Going to Travel, Be Prepared
While Pennsylvania determines how it will apply general jurisdiction principles, these two appellate cases serve as reminders that even seemingly black letter law from the U.S. Supreme Court can be shaded in color by the courts interpreting it. Companies should pay close attention as to whether any of the states in which they operate have held that registering a business vests their courts with general jurisdiction. It could make the difference between litigating on the road instead of the relative comfort of your own backyard.