Of Carrots and Sticks: General Jurisdiction and Genuine Consent

Sanders, Craig | August 1, 2017

The United States Supreme Court’s 2014 decision in Daimler AG v. Bauman changed how the courts will determine whether companies should be subject to general personal jurisdiction. In 1945, Pennoyer v. Neff’s geographical fixation gave way to International Shoe Co. v. Washington, which provided a test for courts to determine whether corporations had sufficient contact with a forum to meet the bar for personal jurisdiction there. Specific jurisdiction requires “minimum contacts,” provided the action is satisfactorily related to the forum. However, to be subject to general jurisdiction, a corporation must possess more than just “minimum contacts,” and claimants can bring actions in forums where companies are subject to general jurisdiction regardless of whether those actions have any relationship to that forum. Precisely how much contact a company must have with a forum to be subject to general jurisdiction has evolved since International Shoe, and Daimler is the most current iteration.Analyzing general jurisdiction by pinpointing a company’s level of contact with a particular forum can be a superfluous exercise. The case law has developed such that “consent” can overcome even a remarkable lack of contacts with a particular forum and subject a company to general jurisdiction. Some courts have interpreted a corporation’s registration and appointment of someone to accept service of process in a state as implied consent to general jurisdiction. Others at least require a state’s registration procedure to explicitly mandate the company submit to general jurisdiction. Daimler, and its recent progeny, may have signaled the death knell for at least implied consent to general jurisdiction by virtue of registration and perhaps for explicit consent as well. Some courts and commentators are rightly noting that mandating consent as the cost of doing business in a particular forum is consent in name only. While courts used to give credence to the legal fictions of corporate consent and corporate presence, they are now striking them down as violations of the Fourteenth Amendment’s Due Process Clause.This Note seeks to address how states can maintain general jurisdiction over corporations that do not meet Daimler’s apparent demand that a company be “at home” in the forum. The inevitable chipping away of states’ registration statutes as sufficient (impliedly or explicitly) for general jurisdiction potentially leaves a viable alternative intact: genuine consent. States might look to structure a form of incentive based consent by use of their regulatory or taxing authority. States can craft solutions based on how important it is to them to provide their courtrooms to those who would seek redress from corporations operating within their borders. Additionally, an incentive-based genuine consent to jurisdiction serves the ancillary benefit of ensuring more companies go through the proper channels of a state’s registration process, including filling out the appropriate paperwork, instead of operating outside its bounds.After Daimler, states will have to decide whether, and how, to adapt their corporate registration statutes to ensure their courts remain open to claims based on general jurisdiction. This Note will put forward solutions so that states will be able to craft new legislation before the courts invalidate their reliance on fictional consent.