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Seeking to Allege General Jurisdiction in New York? Corporate Registration is Not Enough

In Kyowa Seni, Co., Ltd. v. ANA Aircraft Technics, Co., Ltd., Docket No. 650589/2017, 2018 WL 3321410 (N.Y. Sup. Ct. July 5, 2018), Justice Saliann Scarpulla of the New York County Commercial Division joined in a long line of New York federal cases that have vitiated the registration theory of jurisdiction.

Traditionally, registering to do business in New York was sufficient to subject a corporate defendant to general personal jurisdiction in the state. See Bagdon v. Philadelphia & Reading Coal & Iron Co., 111 N.E. 1075, 1077 (N.Y. 1916).  Then, in Daimler AG v. Bauman, 571 U.S. 117 (2014), the United States Supreme Court held that the exercise of general jurisdiction was only appropriate where a corporate defendant is incorporated or has its principal place of business, or in an “exceptional case,” where the corporation’s ties are so constant and pervasive “as to render [it] essentially at home in the forum state.” Id. at 122. Although Daimler did not specifically address the registration theory of general jurisdiction, an overwhelming number of lower courts, including the Southern District of New York, have subsequently found that registering to do business in a forum is insufficient for general jurisdiction.

In Kyowa Seni, the plaintiff attempted to subject foreign defendants to general jurisdiction in New York by arguing, inter alia, that the corporate defendants’ registration with the Secretary of State of New York subjected them to jurisdiction in New York. In granting the defendants’ motion to dismiss for lack of jurisdiction, Justice Scarpulla held that mere corporate registration does not confer general jurisdiction, further recognizing that this position was consistent with that of the Southern District in a notable line of cases interpreting Daimler. See Famular v. Whirlpool Corp., Case No. 16-cv-944, 2017 WL 2470844, at *4 (S.D.N.Y. June 6, 2017) (“despite the uncertain status of the law in this area, a foreign defendant is not subject to the general personal jurisdiction of the forum state merely by registering to do business with the state, whether that be through a theory of consent by registration or otherwise”); Sae Han Sheet Co., Ltd. v. Eastman Chemical Corp., 17-cv-2734, 2017 WL 4769394, at *6 (“[i]n light of Daimler …, the more recent authority in this district has held that corporations do not consent to general jurisdiction when they register under the various New York registration statutes.”); Taormina v. Thrifty Car Rental, No. 16-cv-3255 (VEC), 2016 WL 7392214 (S.D.N.Y. Dec. 21, 2016).

To date, no New York State appellate court has ruled on this issue. At the federal level, the Second Circuit provided some guidance regarding the registration theory of general jurisdiction in Brown v. Lockheed Martin Corp., 814 F.3d 619 (2d Cir. 2016), where it declined to “construe [Connecticut’s] registration and agent-appointment statutes as embodying actual consent by every registered corporation to the state’s exercise of general jurisdiction over it.” Id. at 626. Nonetheless, with the addition of the Justice Scarpulla’s decision in Kyowa Seni, it is increasingly evident that post-Daimler courts, including the New York County Commercial Division, are less willing to subject corporate defendants to general jurisdiction based solely on their registration to do business in New York.

Copyright © 2018, Sheppard Mullin Richter & Hampton LLP.

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About this Author

Robert Friedman, Legal Specialist, business and corporate litigation matters
Partner

Mr. Friedman is a partner in the Business Trial and White Collar Practice Groups in the firm's New York office. He heads the Business Trial Practice Group in New York.

Areas of Practice

Mr. Friedman focuses his practice on business and corporate litigation matters. He has particular experience in the areas of securities litigation, internal investigations, corporate trust litigation, real estate litigation, director and officer liability, bankruptcy litigation, restrictive covenants and intellectual property.  He has tried cases involving and counseled...

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Rena Andoh, Electronic Discovery, Litigation, Attorney, Sheppard Mullin, law fir
Associate

Ms. Rena Andoh is an associate in the Business Trials Practice Group in the firm's New York office. She is also a member of the firm's Electronic Discovery Group and Technology Committee.

Area of Practice

Ms. Andoh has a broad-ranging litigation practice. Ms. Andoh has substantial trial and arbitration hearing experience, including acting as lead counsel/first chair trial counsel in complex commercial matters. Ms. Andoh also maintains an active appellate practice and has argued before courts such as the United States Court of Appeals for the District of Columbia Circuit and the First Department of the New York State Supreme Court, Appellate Division.

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