PJ study guide: general jurisdiction

“General jurisdiction” versus “general jurisdiction”

As noted in class, sometimes the same words may be used in very different ways on the law. “General jurisdiction” is one of those terms, one that has different meanings in different contexts.

• “General jurisdiction” can refer to the general subject matter jurisdiction of a trial court.
• “General jurisdiction” can also refer to “all-purpose” in personam (personal) jurisdiction of a court.

Here we are of course referring to the latter meaning.

What exactly is “general” in personam jurisdiction?

By now, you should understand the difference between “specific” jurisdiction and “general” jurisdiction. Whereas specific jurisdiction requires a relationship (giving rise) between the defendant’s in-state contacts and the claim, general jurisdiction is “all-purpose” jurisdiction, which means there need be no relationship between the contacts and the claim. Thus, when general jurisdiction is proper, the defendant can be sued in the forum state for any claim whatsoever, regardless of where the claim arose. Put differently, the defendant’s contacts with the forum are so extensive that the defendant should expect that it can be sued in that forum for anything that happened anywhere.

Illustration of the concept: Acme Beer Inc. is a Florida Corp. with PPOB in Florida. It makes microbrewed beer in Florida. One of its truck drivers gets into a car accident in Georgia with a Florida citizen. The Florida victim could assert specific jurisdiction against Acme in Georgia, but why? The victim is from Florida and probably wants to sue at home. So the victim sues Acme in Florida state courts for negligence. Analysis: Even though the accident “arose” from the defendant’s contacts in Georgia, the plaintiff can sue Acme in Florida. The State of Florida is Acme’s place of incorporation and its principal place of business, making it the defendant’s “home” state. Because general jurisdiction exists in Florida over Acme, there need be no relation all at between Acme’s in-state contacts (INC and PPOB in Florida) and the claim (which arose from an accident in Georgia).

For a further illustration of what general in personam jurisdiction is, recall the framework from International Shoe. The International Shoe case does not speak in terms of specific or general jurisdiction because those terms were invented later. However, the Court does talk about what we now call general jurisdiction. Below is the MC table from the International Shoe handout. The lower right-hand box (D) describes what we now call general jurisdiction.

Now that you’ve seen a simple illustration of general jurisdiction and you’ve tied it to the International Shoe framework, let’s figure out how extensive the contacts need to be for general jurisdiction.

Supreme Court cases

Because general jurisdiction is all-purpose, the level of contacts must be high. How high? As a starting point, consider the relevant language from International Shoe (citations removed):

While it has been held, in cases on which appellant relies, that continuous activity of some sorts within a state is not enough to support the demand that the corporation be amenable to suits unrelated to that activity, there have been instances in which the continuous corporate operations within a state were thought so substantial and of such a nature as to justify suit against it on causes of action arising from dealings entirely distinct from those activities.

The language quoted above says two important things about general “all-purpose” jurisdiction. First, general jurisdiction is never guaranteed, it’s a maybe. Second, the showing required for general jurisdiction is going to be fairly high. As the Court says, there may be general jurisdiction where there are “continuous corporate operations within a state [that] were thought so substantial and of such a nature as to justify suit” on unrelated claims. Also, some lower courts also latched onto other language from International Shoe that referred to “continuous and systematic” contacts.

In the years following International Shoe, lower courts were inconsistent on what kind of showing was enough for general jurisdiction? Were continuous & systematic contacts enough? Must the contacts also be “substantial” (whatever that meant!)?

Unfortunately, the Supreme Court’s early cases did not provide much guidance.

• In Perkins v. Benguet Consol. Mining Co., 342 U. S. 437 (1952), the Court allowed jurisdiction over a Philippine mining corporation that carried on “a continuous and systematic, but limited, part of its general business” in Ohio while the Philippines were occupied by the Japanese during WWII. The corporation carried on “continuous and systematic corporate activities” such as “directors’ meetings, business correspondence, banking, stock transfers, payment of salaries, purchasing of machinery.” The Court held jurisdiction was proper even though the level of contacts was not terribly extensive.
• In Helicopteros Nacionales de Colombia, S. A. v. Hall, 466 U. S. 408 (1984), the Court denied general jurisdiction over a Colombian corporation that provided transportation services in Peru. The suit was in Texas state court, and the alleged contacts with Texas included negotiations regarding the transportation, purchases of helicopters and parts of over $4 million, Texas-based training of pilots, and other employee visits and consultation in Texas. The defendant also received payments from a Texas bank. The Court held these were not “the kind of continuous and systematic general business contacts the Court found to exist in Perkins.”

After Helicopteros, lower courts again struggled with general jurisdiction. The Supreme Court’s opinions gave scant guidance. Plus, what about large corporations with arguable “continuous and systematic” business activities everywhere, such as large retailers (think Best Buy, Target, and the like). Would they be subject to general jurisdiction everywhere?

In recent years, the Supreme Court has clarified and narrowed the scope of general jurisdiction. In a pair of important recent cases, the Court has limited general jurisdiction to places where the defendant is “essentially at home.”

• In Goodyear Dunlop Tires Operations, S. A. v. Brown, 564 U.S. 915 (U.S. 2011), the court held that a North Carolina state court did not have general jurisdiction over foreign corporations for an accident that happened in France. The defendants were indirect foreign subsidiaries of Goodyear USA. A “small percentage of [the foreign defendants’] tires (tens of thousands out of tens of millions manufactured between 2004 and 2007) were distributed within North Carolina by other Goodyear USA affiliates.” This was not enough for general “all-purpose” jurisdiction.
• In Daimler AG v. Bauman,134 S. Ct. 746 (U.S. 2014), Argentinian residents filed suit in California federal court against a German corporation. The plaintiffs alleged that an Argentinian subsidiary of defendant Daimler had “collaborated with state security forces to kidnap, detain, torture, and kill certain [subsidiary] workers, among them, plaintiffs or persons closely related to plaintiffs.” The Court again held that the German corporation was not “at home” in California.
• In BNSF R. Co. v. Tyrell (No. 16-405, 2017), the Court reaffirmed that in the vast majority of cases involving corporations, that the “at home” standard would be met by PPOB and place of incorporation, leaving little room for the (perhaps more theoretical than real) FN 19 “exceptional” case safety valve.

With the recent cases in mind, let’s try to determine when general jurisdiction might and might not exist.

What level of contacts are required for general jurisdiction?

It’s clear that “systematic and continuous” contacts (think the kind that Best Buy or Target would have in Florida) are not by themselves enough. In Daimler, the Court held it would be “unacceptably grasping” to use the broad formulation “substantial, continuous, and systematic course of business.'” Instead, held Daimler, “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.'” (quoting Goodyear) (emphasis added).

What is enough to render a corporation “essentially at home”? The Daimler Court gave guidance (citations removed):

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.” With respect to a corporation, the place of incorporation and principal place of business are “paradig[m] … bases for general jurisdiction.” Id., at 735. Those affiliations have the virtue of being unique—that is, each ordinarily indicates only one place—as well as easily ascertainable. Cf. Hertz Corp. v. Friend, 559 U.S. 77, 94 (2010) (“Simple jurisdictional rules … promote greater predictability.”). These bases afford plaintiffs recourse to at least one clear and certain forum in which a corporate defendant may be sued on any and all claims.

Careful readers will note with great interest the Court’s citation to Hertz, a diversity SMJ PPOB case, and a case premised largely on the benefits of simple jurisdictional rules. Perhaps in Daimler the Court here is also trying to simplify general in personam jurisdiction. It appears that the Court is mostly limiting general jurisdiction to a few places:

• Individuals: state of domicile, if any.
• Corporations: place of incorporation and principal place of business

Simple right?

Sorry, not quite so simple. You might come away from Goodyear and Daimler thinking that general jurisdiction is now limited to the domicile/INC/PPOB triumverate, but despite the Court’s seeming preference for simple jurisdictional rules, the Court also left itself a Grable/Gunn-like safety valve. In FN 19 of Daimler, the Court left the door open to general jurisdiction in additional “exceptional” cases:

We do not foreclose the possibility that in an exceptional case, see, e.g., Perkins, . . . 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, see infra, at 763, quite another to expose it to suit on claims having no connection whatever to the forum State.

What might qualify as an “exceptional” case is unclear, but it is worth noting that in Perkins, the defendant corporation had essentially set up a “home away from home” in Ohio while its Philippine operations were suspended during the Japanese occupation in WWII. Those activities were were pretty limited. So it’s unclear what might qualify as FN19 “exceptional” cases, and future decisions will be needed to flesh it out. More importantly, what arguments might you make in a relevant fact pattern?

What about the reasonableness factors?

A final twist. Another important question addressed by Daimler is whether or not the WWVW/BK reasonableness factors should be used in general jurisdiction analysis. This is an issue that lower courts had split on in the past.

FN20 of Daimler attempts to resolve this question:

Justice SOTOMAYOR would hold that the exercise of general jurisdiction over Daimler would be unreasonable “in the unique circumstances of this case.” . . .

. . . . Justice SOTOMAYOR’s proposal to import Asahi ‘s “reasonableness” check into the general jurisdiction determination, on the other hand, would indeed compound the jurisdictional inquiry. The reasonableness factors identified in Asahi include “the burden on the defendant,” “the interests of the forum State,” “the plaintiff’s interest in obtaining relief,” “the interstate judicial system’s interest in obtaining the most efficient resolution of controversies,” “the shared interest of the several States in furthering fundamental substantive social policies,” and, in the international context, “the procedural and substantive policies of other nations whose interests are affected by the assertion of jurisdiction.” Imposing such a checklist in cases of general jurisdiction would hardly promote the efficient disposition of an issue that should be resolved expeditiously at the outset of litigation.

Is this holding or dicta? In light of the Court’s conclusion that Daimler was not “at home,” FN20 might be dicta. On the other hand, Justice Ginsberg’s majority opinion was joined by seven other Justices. So it is important to recognize that a solid 8-Justice majority of the Court now appears to believe that the reasonableness factors are no longer part of the general jurisdiction analysis.

So how narrow is the scope of general “all purpose” jurisdiction today? 

Pretty darn narrow. In most cases, general jurisdiction appears to be limited to three examples shown in Goodyear/Daimler + the amorphous Daimler FN19 “exceptional” case.

How broad is FN19 jurisdiction? Let’s call it “fallback” general jurisdiction, i.e., general jurisdiction that can apply even though the defendant is not PPOB’ed, INC’ed, or domiciled in the forum state. This seems to be a rare and narrow exception. First, the Daimler Court says that the FN19 fallback would apply only in an “exceptional case.” That suggests that fallback general jurisdiction will be rare. Second, recall from the discussion above that that the defendant must have more than continuous and systematic contacts with the state. Instead, the defendant must also be “essentially at home” in the state. This reminds us that the mere existence of continuous and systematic contacts (like Best Buy in Florida) is likely not enough.

So barring domicile, INC, or PPOB, what kind of continuous and systematic contacts might render a defendant at home in a state? The citation in FN19 to Perkins is instructive. Recall that Perkins involved a Philippine company that ceased active operations because of the Japanese occupation during WWII. The company had limited functioning in Ohio during the war, where it ran things for a while. The reason (and probably the sole reason) that the defendant in Perkins was “at home” in Ohio was that it was shut out of its actual home during the war, and it set up a temporary home in Ohio.

Therefore, it’s all about what place you can call home. This suggests that fallback general jurisdiction must involve the type of contacts that are sufficiently home-like that the state is like a true home for the defendant even if not technically a place of INC or PPOB. So having lots of stores or employees in a state will probably not be enough for fallback general jurisdiction; instead, the state will need to be like “home.” (Vague, to be sure.) So the fallback seems narrow, although its breadth is still unclear. For instance, must the defendant be using the fallback “home” because it cannot use its true home (as in Perkins)? Or is it enough that the fallback be sufficiently home-like such that the state is akin to a secondary PPOB?

As Dorothy said in The Wizard of Oz, “There’s no place like home.”

The bottom line.

Only future cases can tell for sure, but a few things are certain (or pretty darn certain):

1. Systematic and continuous contacts alone are no longer sufficient for general jurisdiction.
2. The defendant must have systematic and continuous contacts that render it “essentially at home.”
3. For corporations, “home” will usually be PPOB or place of incorporation.
4. For individuals, “home” will usually be the place of domicile.
5. The FN19 fallback for general jurisdiction will probably be very narrowly interpreted though its scope is unclear.
6. The WWVW/BK reasonableness factors are likely not used anymore for general jurisdiction.

Posted Sept. 23, 2018 (adding BNSF)