Registration, Fairness, and General Jurisdiction

• Publication year: 2021

95 Nebraska L. Rev. 477. Registration, Fairness, and General Jurisdiction

Registration, Fairness, and General Jurisdiction

Jack B. Harrison(fn*)

TABLE OF CONTENTS

I. Introduction .......................................... 478

II. In the Beginning Was "Presence" ...................... 481

III. When "Presence" Ceased to Mean "Presence" .......... 484

IV. What's "Fairness" Got to Do with It? .................. 488

V. The Doctrine of General Jurisdiction After International Shoe.................................................. 490
A. Perkins. v. Benguet Consolidated Mining Co. . . ..... 491
B. Helicopteros Nacionales de Colombia, S.A. v. Hall . . 493

VI. The Death of General Jurisdiction? .................... 495
A. Goodyear Dunlop Tires Operations, S.A. v. Brown . . 495
B. Daimler v. Bauman ............................... 500

VII. Registration and General Jurisdiction ................. 507
A. Introduction ....................................... 507
B. Circuit Split: Pre-Daimler, Post-International Shoe . 512
C. Post-Daimler Cases Concluding that Consent-By-Registration Is a Valid Basis for the Exercise of Personal Jurisdiction .............................. 516
D. Post-Daimler Cases Concluding that Consent-By-Registration Is Not a Valid Basis for the Exercise of Personal Jurisdiction .............................. 531

VIII. Conclusion: A Middle Path ............................ 538

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I. INTRODUCTION

"Whenever you get there, there is no there there."(fn1)

-Gertrude Stein

The United States Supreme Court's recent decisions in Goodyear(fn2) and Daimler(fn3) significantly narrowed the traditional understanding of general personal jurisdiction. Historically, general personal jurisdiction concerned only the defendant's relationship with the forum, allowing plaintiffs to sue defendants in a particular jurisdiction irrespective of the claim at issue or where that claim arose.(fn4)

Personal jurisdiction was initially limited to strict territorial limits.(fn5) Due to advancements in technology, the Court expanded personal jurisdiction with the introduction and development of minimum-contacts analysis.(fn6) The impetus for this initial expansion of personal jurisdiction from territorial limits to minimum contacts was the concern that potential defendants could enjoy the benefits and protections of a specific state's laws while simultaneously being able to dodge the repercussions of potential liability within that state.

Following the Court's decision in International Shoe,(fn7) lower courts and those who teach civil procedure did not question the assertion that general personal jurisdiction exists where a corporate defendant is incorporated and where it has its principal place of business. Such an articulation of general jurisdiction was, in effect, simply an articulation of domicile jurisdiction that had existed since Pennoyer.(fn8) However, in addition to this very narrow understanding of general jurisdiction, lower courts and academics also assumed that general jurisdiction could be based on a foreign corporation's activities within the forum state, concluding that general jurisdiction over a defendant may be found where that defendant's contacts with the forum state were "continuous and systematic."(fn9)

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With Goodyear and Daimler, the Court rejected the traditional understanding of general jurisdiction based on a defendant corporation's activities within the forum state, adopting an almost exclusively domicile basis for general jurisdiction.(fn10) These decisions swept away years of lower court decisions that found general jurisdiction over corporate defendants based on corporate activities in the forum state.(fn11)

In Goodyear and Daimler, the Court rejected arguments that sales into a forum state by a corporate defendant could form the basis for general jurisdiction.(fn12) More importantly, the Court also concluded that that the fairness factors that had run through the Court's personal jurisdiction jurisprudence for generations have no applicability in the general jurisdiction context.(fn13) These two conclusions by the Court ignore the world of modern commerce and unnecessarily hamper plaintiffs pursuing redress for injuries.

In a previous article, I explored the manner in which the Court's jurisprudence surrounding the doctrine of specific jurisdiction, particularly related to the "stream of commerce" theory, greatly hindered plaintiffs' efforts to find a convenient forum in which to seek redress for real injuries.(fn14) This Article continues that discussion within the context of the Court's developing jurisprudence in the area of general jurisdiction and proposes a more balanced approach to the general jurisdiction conundrum.

Part II of this Article traces the historical development of the Court's personal jurisdiction jurisprudence, from the territorial limita-

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tions of Pennoyer v. Neff(fn15) to the abandonment of this overly restrictive approach because of the development of the modern, mobile industrial state of the twentieth century. Part III of this Article then looks at the Court's modern development of personal jurisdiction doctrine, specifically, the Court's conclusion in International Shoe Co. v. Washington that contacts with a forum may serve as a substitute for actual physical presence in the forum.(fn16) Part IV examines the role of "fairness" in the analysis of personal jurisdiction, as articulated by the Court in World-Wide Volkswagen v. Woodson,(fn17) where the Court outlined the factors to be employed in determining reasonableness.(fn18)Part V analyzes the continued existence of general jurisdiction after International Shoe, looking specifically at the Court's decisions in Perkins v. Benguet Consolidated Mining Co.(fn19) and Hall v. Helicopteros Nacionales de Colombia, S.A.,(fn20) in which the Court continued to hold that exercise of general personal jurisdiction over a foreign corporation was appropriate where that corporation had "continuous and systematic contacts" with the forum. Part VI reviews the Court's decisions in Goodyear Dunlop Tires Operations, S.A. v. Brown(fn21) and Daimler AG v. Bauman,(fn22) questioning the continued viability of the doctrine of general personal jurisdiction after these decisions. Part VII of this Article examines whether a foreign corporation's compliance with a state registration statute provides a basis for that state to exercise general personal jurisdiction over the foreign corporation.(fn23)

In conclusion, this Article proposes that despite the Court's decisions in Goodyear and Daimler, the Court should, at a minimum, adopt an approach to general jurisdiction whereby a corporation that registers to do business in a state, appoints an agent for service of process in the state, and actually conducts business in the state con-

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sents to general jurisdiction in that state, particularly for injuries to citizens of that state that occur outside the state.(fn24) This Article also asserts that, consistent with the Court's opinion in Burnham, where a corporation's statutorily appointed agent is properly served within a state, that state may properly exercise personal jurisdiction over that corporation. Additionally, this Article argues that the Court should revisit its rejection of the fairness factors in the general jurisdiction context in order to restore the balance between the interest of a plaintiff seeking redress in her home state and the burden on foreign defendants whose "continuous and systematic" contacts in the forum state require them to defend in the forum state.(fn25)

II. IN THE BEGINNING WAS "PRESENCE"

The concept of personal jurisdiction has, of necessity, evolved with the growth of commerce and the development of new technology.(fn26)However, before addressing the current state of affairs regarding personal jurisdiction, one must first examine the historical development of the doctrine of personal jurisdiction. While the concept of personal jurisdiction finds its constitutional roots in the Due Process Clause, the earliest important cases to discuss the concept of personal jurisdiction focused on events that occurred prior to the ratification of the Fourteenth Amendment in 1868. These early cases were deeply rooted in the fundamental concept of state sovereignty as the primary basis for the exercise of personal jurisdiction.(fn27)

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As most first-year law students discover early in their law school careers, the modern origins of personal jurisdiction began with Pennoyer v. Neff.(fn28) In Pennoyer, an attorney brought an action against his client, Neff, for unpaid legal fees in Oregon.(fn29) As in Galpin v. Page, service on Neff was attempted by publication in a newspaper. Neff was not personally served.(fn30) Default judgment was then awarded to the attorney when Neff failed to respond or appear.(fn31) In order to satisfy the judgment, the attorney took action to seize property owned by Neff in Oregon, with the property subsequently being sold at a sheriff's auction.(fn32) At the auction, the attorney purchased the land and then assigned the rights to the property to Pennoyer.(fn33)

Shortly thereafter, Neff sued Pennoyer for quiet title.(fn34) In effect, Neff argued that the original judgment against him was invalid because the original court did not have proper personal jurisdiction over him, in that he did not reside within the jurisdiction of the Oregon court and, thus, was not properly served.(fn35) The district court found the original judgment against Neff invalid, determining that the property continued to belong to Neff.(fn36) The case was then appealed, and the Supreme Court granted certiorari.(fn37)

In an opinion by Justice Field, the Court held that the authority of every lower court is restricted by the territorial limits of the state where it is established.(fn38)...