AuthorLipshie, Burton N.

    In Daimler AG v. Bauman, (1) almost certainly its most important jurisdiction decision in some seventy years, an eight-Justice majority of the Supreme Court essentially rewrote the law of general jurisdiction. (2) The result is that a corporation will, with narrow exceptions, only be subject to general jurisdiction in the states in which it is either incorporated or maintains its principal place of business; in the Court's language, a state in which the corporation is "at home." (3) The once familiar standard for general jurisdiction--corporate "presence" in a state in which it "does business" both "continuously and systematically"--has been abrogated, except, possibly, in "exceptional" cases. (4) Additionally, the Court announced that the "paradigm" place where an individual is "at home" is where that individual is domiciled. (5)

    The Court issued a sweeping opinion on the constitutional limits of presence jurisdiction and, in the process, swept away decades of New York CPLR 301 jurisprudence. (6) First, the Court rejected the argument, accepted and followed by many Circuits, that when a local agent performs services for the foreign principal that are so important that "if it did not have a representative to perform them, the corporation's own officials would undertake to perform substantially similar services," the presence of the agent in the state makes the principal present in that state. (7) That test, said the Court, "stacks the deck," because "it will always yield a pro-jurisdiction answer." (8)

    Instead, the Court relied heavily on--and expanded upon--its decision in Goodyear Dunlop Tires Operations, S.A. v. Brown, saying that

    Goodyear made clear that only a limited set of affiliations with a forum will render a defendant amenable to all-purpose jurisdiction there. "For an individual, the paradigm forum for the exercise of general jurisdiction is the individual's domicile; for a corporation, it is an equivalent place, one in which the corporation is fairly regarded as at home." (9) And, for a corporation, "the place of incorporation and principal place of business are 'paradig[m]... bases for general jurisdiction.'" (10) The Court recognized that "Goodyear did not hold that a corporation may be subject to general jurisdiction only in a forum where it is incorporated or has its principal place of business; it simply typed those places paradigm all-purpose forums." (11) The Court went on to state, "[p]laintiffs would have us look beyond the exemplar bases Goodyear identified, and approve the exercise of general jurisdiction in every State in which a corporation 'engages in a substantial, continuous, and systematic course of business.' That formulation, we hold, is unacceptably grasping." (12)

    This marks a dramatic change in the law. In New York, the formulation proposed by the Daimler plaintiffs had been the law since then-Judge Cardozo's 1917 opinion in Tauza u. Susquehanna Coal Company. (13) The majority opinion cites Tauza, and proclaims that it was "decided in the era dominated by Pennoyer [v. Neff]'s territorial thinking, [and] should not attract heavy reliance today." (14) The new standard articulated by the Court is that the inquiry "is not whether a foreign corporation's in-forum contacts can be said to be in some sense 'continuous and systematic,' it is whether that corporation's 'affiliations with the State are so "continuous and systematic" as to render [it] essentially at home in the forum State.'" (15) The Court acknowledged

    the possibility that in an exceptional case, a corporation's operations in a forum other than its formal place of incorporation or principal place of business may be so substantial and of such a nature as to render the corporation at home in that State. But this case presents no occasion to explore that question, because Daimler's activities in California plainly do not approach that level. It is one thing to hold a corporation answerable for operations in the forum State, quite another to expose it to suit on claims having no connection whatever to the forum State. (16) Finally, and importantly, the Court noted that

    [T]he general jurisdiction inquiry does not "focu[s] solely on the magnitude of the defendant's in-state contacts." General jurisdiction instead calls for an appraisal of a corporation's activities in their entirety, nationwide and worldwide. A corporation that operates in many places can scarcely be deemed at home in all of them. Otherwise, "at home" would be synonymous with "doing business" tests framed before specific jurisdiction evolved in the United States. Nothing in International Shoe [Co. v. Washington] and its progeny suggests that "a particular quantum of local activity" should give a State authority over a "far larger quantum of... activity" having no connection to any in-state activity. (17) In this Article, we will first place the Daimler decision in its context, both historical and technological, in an attempt to understand the flow of Supreme Court jurisdiction jurisprudence, and how Daimler fits into that jurisprudence. Then, we will explore the issues in New York law that Daimler left open, and which, more than five years after it was decided, remain open, and, indeed, often confused.


    To understand the sea-change that Daimler appears to have created, it may be useful to put it in its historical context, and follow the train of Supreme Court jurisdiction jurisprudence, to see how we got here, and where "here" in fact is.

    If we could travel back to 1878, we would see an obviously very different United States. To put it in a timeline perspective, in 1878 the country was closer in time to the last bloody years of the Civil War than we, in 2019, are to the atrocities of September 11, 2001. (18) How clear the memory, and how raw the wounds, still were. The awful struggle of the Civil War was in large part a battle about "states' rights"--the individual states' power to impose slavery, and, importantly, to reach beyond their borders to require non-slave states to respect that hideous institution when masters and slaves traveled to those non-slave states. (19) And, at the most basic level, the war was about their right to leave the union. (20) There are those who say the Civil War was, in significant part, fought over a point of grammar. (21) Is it "the United States is..." or "the United States are..."? (22) The national government had won the dreadful war, but the aftermath--Reconstruction--was, to say the very least, ugly. (23) It saw the great hopes of reunification of the nation under Thomas Jefferson's soaring promise that "all men are created equal" (24) devolve into sectionalism and violence. (25) And in 1878, with Reconstruction still unfolding, no one in federal authority, including the Supreme Court, was eager to extend the powers of individual states to reach beyond their borders to impose their will. (26)

    The nature of society, in general, was also quite different in 1878. Travel, for example, was, to a large extent, not much easier than it had been in 1778. (27) It would be another thirty years before the first Fords would roll off the assembly line. (28) Railroads were available, but not used much for passenger travel except by the wealthy. (29) Generally, travel was still mostly by horse. (30) It was arduous and time-consuming to get anywhere beyond one's local area. (31) Business in 1878 was still mostly local. (32) There were a few large corporations, but most business was still small. (33) Alexander Graham Bell had invented the telephone only two years earlier, and it would be some time before it was generally available. (34)

    In that political and cultural context, it is not at all surprising that, faced with the question of the power of a state court to exercise personal jurisdiction over a defendant, the Supreme Court would hold that a state could exercise that power only over any one, or anything, found within the borders of the state, with no state authority to reach beyond its borders to exercise that power and force non-residents to come to the state to mount a defense to a lawsuit. (35) And so it did, in Pennoyer v. Neff. (36)

    While it was easy to determine whether an individual was within a particular state when, by service of process, the state sought to exercise jurisdiction over that individual, the question, over the succeeding years, became just what does it mean for a corporation to be "found" within a state. (37) Courts, most famously the New York Court of Appeals in then Judge Cardozo's opinion in Tauza v. Susquehanna Coal Corp., began to hold that if a corporation was "present" in the state, by regularly and continuously doing business there, the artificial detail of where it happened to be incorporated or had its main office, did not prevent it from being "found" within the state, and subject to that state's general jurisdiction. (38) A court would look at such things as the existence of an office, of employees, of bank accounts. (39) All of these were indicia of "presence." (40)

    If we could fast-forward from 1878 to 1945, we would find significant changes in the political and cultural landscape of the United States in those almost seventy years. The country was very different politically. It had just fought and won the "good war" against fascist tyranny. (41) We were a united country in many respects, without the struggles of the Civil War era (of course, "states' rights," in a related but different context, would later become another roiling issue). (42) So, limiting the power of individual states was not on the nation's political agenda. (43) Travel was also very different from what it had been in 1878. Not only were railroads and automobiles ubiquitous, but commercial air flights were becoming more common. (44) The country was getting smaller, and easier to navigate. (45) The world of business was also very different. The nationwide...

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