Foreign Defendants and the Future of Personal Jurisdiction
May 27, 2022
The Supreme Court recently granted certiorari in yet another personal jurisdiction case (the eighth such case in just over ten years). Mallory v. Norfolk Southern Rwy. Co. has no transnational facts, but it is highly relevant for the future of transnational litigation in U.S. courts. Corporate registration statutes, like the one being challenged in Mallory, are the only potential basis remaining for asserting general jurisdiction over foreign corporations. Without them, plaintiffs will have to rely solely on specific jurisdiction to reach foreign corporate defendants, which means their disputes must arise from or relate to the corporations’ forum contacts. I expect the Supreme Court will rule such registration statutes unconstitutional next Term. But thinking about foreign defendants makes clear why the continuing curtailment of general jurisdiction must be accompanied by a robust and flexible doctrine of specific jurisdiction.
In an article just published by the Alabama Law Review, Pam Bookman, Andrew Bradt, Zach Clopton, Teddy Rave, and I argue precisely this. We are troubled by rumblings on the Court of a return to a general jurisdiction regime. Last Term in Ford Motor Co. v. Montana Eighth Judicial District, for example, Justice Gorsuch pondered in his concurrence whether International Shoe had outgrown its usefulness. His musings suggested a return to a paradigm in which a corporation “present” (a term he did not define) within the state would be subject to jurisdiction regarding any claim “whether it involved events inside or outside the state.” That general jurisdiction rule would better parallel, he suggested, the “old ‘tag’ rule” under which individual defendants can still be sued “on any claim anywhere they can be found.”
Notably absent from Justice Gorsuch’s concurrence, however, are foreign defendants. I wonder if he would be as sanguine about a “presence”-based jurisdictional regime if presented with facts involving foreign defendants and foreign harms. Should a U.S. court have adjudicative jurisdiction over a foreign corporation for wrongs (say, human rights violations) committed by its subsidiary in another country (say, Argentina) simply because it is “present” in the United States? Gorsuch’s old school paradigm would suggest yes, but eight Justices not that long ago thought the answer was clearly no: defendants are only subject to dispute-blind jurisdiction if they are “at home” in the forum.
I tend to think those eight Justices were right—if, as Justice Ginsburg assumed in Daimler v. Bauman, specific jurisdiction remains robust and flexible. But that is not the direction in which the Court is heading. Instead, in J. McIntyre Machinery, Ltd. v. Nicastro, a splintered Court rejected a flexible approach to specific jurisdiction over foreign defendants that would have examined their contacts with the United States as a whole, sticking instead to an overly rigid focus on contacts with a single state. Then in Bristol-Myers Squibb v. Superior Court, the Court rejected a sliding scale approach to contacts and relatedness (what might be called a specific jurisdiction version of “doing business” jurisdiction). It downplayed the ramifications of this stingy view of specific jurisdiction by asserting that plaintiffs can always fall back on general jurisdiction. As we argue in our Alabama article, general jurisdiction is a faulty fall back—especially when the defendant is a foreign corporation.
I remain a fan of International Shoe. International Shoe’s brilliance is in recognizing that it is not just the relationship between the defendant and the forum, but the relationship among the defendant, the forum, and the dispute that matters—and in recognizing that this relationship will be one of degree. Foreign (meaning international) defendants are a great litmus test for any system of adjudicative jurisdiction: If a foreign defendant causes harm to or puts at risk a state’s residents or other interests, the state should have a long enough arm to haul that defendant into court. At the same time, foreign defendants shouldn’t be discouraged from doing business in the state for fear of jurisdictional claims over their global affairs. In short, a regime reliant on general jurisdiction won’t work; we need a robust and flexible doctrine of specific jurisdiction to ensure appropriate jurisdiction over foreign defendants. International Shoe gives us all the practical flexibility we need—it is only the barnacles of subsequent interpretation that has turned the personal jurisdiction inquiry into the rigid and difficult doctrine that Justice Gorsuch (and others) bemoan.
It is likely that the Court in Mallory will reject corporate registration statutes as a basis for truly dispute-blind jurisdiction. (Perhaps, however, legislative intervention can justify a looser relationship between in-state contacts and disputes?) But the Court shouldn’t use Mallory as an opportunity to cast further doubt on International Shoe’s basic premise. Indeed, it is International Shoe and the subsequent rise of specific jurisdiction that obviate the need for such overbroad registration statutes today.