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August 08, 2022

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Ninth Circuit Finds No Tag Jurisdiction Over Foreign Corporation

When a corporation sends an officer to a conference in California, is the corporation present in California?  A corporation can only act through its officers.  Thus, it might be said that the corporation is present wherever their officers happen to be, particularly if their presence is related to corporate business.  The question of where a corporation is present might seem better suited to a philosophy class than a law blog, but it has an important practical ramification – determining where a corporation can be sued.

In Martinez v. Aero Caribbean, Martinez v. Caribbean, 2014 U.S. App. LEXIS 16163 (9th Cir. 2014), the Ninth Circuit Court of Appeals was faced with a lawsuit by the heirs of an individual who was killed in an airplane crash in Cuba.  The airplane was manufactured by a French corporation and owned, maintained and serviced by entities based in Cuba.  There was no evidence that the airplane ever flew in California or was owned by a California citizen or resident.  Service was effected on the defendant corporation at its headquarters in France and later on an executive attending a conference in California.

The Court of Appeals applied California’s “long-arm” statute, Cal. Civ. Code § 410.10, finding it co-extensive with federal due process requirements.  The Court of Appeals rejected “tag jurisdiction”, finding that a corporation may be subject to personal jurisdiction if and only if its contacts with the forum support personal jurisdiction or general jurisdiction.  The plaintiffs did not argue for the existence of specific jurisdiction (i.e., jurisdiction based on the defendant’s contacts with California).  This is not surprising because the lawsuit didn’t arise out of any contacts of the defendant with California (e.g., the plane didn’t crash in California and wasn’t operated in California).  Instead the plaintiff argued for general jurisdiction based on sales of other aircraft to a California corporation, contacts with suppliers, sending representatives to attend conference, the airline’s use of the defendant’s other planes in California, and advertising in California.  The Ninth Circuit rejected these arguments, citing the U.S. Supreme Court’s recent decision in Daimler AG v. Bauman, 134 S. Ct. 746 (2014).  The Court of Appeals found that the paradigm fora for general jurisdiction are a corporation’s place of incorporation and principal place of business and that only in “exceptional” cases will general jurisdiction be available.

© 2010-2022 Allen Matkins Leck Gamble Mallory & Natsis LLP National Law Review, Volume IV, Number 234
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About this Author

Keith Paul Bishop, Corporate Transactions Lawyer, finance securities attorney, Allen Matkins Law Firm
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Keith Bishop works with privately held and publicly traded companies on federal and state corporate and securities transactions, compliance, and governance matters. He is highly-regarded for his in-depth knowledge of the distinctive corporate and regulatory requirements faced by corporations in the state of California.

While many law firms have a great deal of expertise in federal or Delaware corporate law, Keith’s specific focus on California corporate and securities law is uncommon. A former California state regulator of securities and financial institutions, Keith has decades of...

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