By Josh Becker and Caroline Gieser, a partner and an associate, respectively, in the Atlanta, GA office of Shook, Hardy & Bacon L.L.P.
On September 21, 2021, the Georgia Supreme Court parted with the nationwide trend narrowing corporate general jurisdiction, instead holding that mere registration to do business in the state of Georgia subjects an out-of-state corporation to general personal jurisdiction. See Cooper Tire & Rubber Company v. McCall, S20G1368.
The Court’s analysis in McCall turned on the notion that a 30-year-old case, Allstate Ins. Co. v. Klein, 422 S.E.2d 863, 865 (Ga. 1992), put out-of-state corporations on notice “that their corporate registration will be treated as consent to general personal jurisdiction in Georgia.” In Klein, the Court held that “a corporation which is authorized to do or transact business in this state at the time a claim arises is a resident for purposes of personal jurisdiction over that corporation in an action filed in the courts of this state. As a resident, such a foreign corporation may sue or be sued to the same extent as a domestic corporation.” Klein, 262 Ga. at 601.
The Georgia Supreme Court’s decisions in McCall and Klein, however, are inconsistent with the nationwide trend following Daimler AG v. Bauman, 571 U.S. 117 (2014), that registration to do business in a state is insufficient to constitute consent to general jurisdiction in the state. Decisions that have held contrary to McCall on jurisdiction-by-consent include:
- Chen v. Dunkin’ Brands, Inc., 954 F.3d 492, 499 (2d Cir. 2020) (“a foreign corporation does not consent to general personal jurisdiction in New York by merely registering to do business in the state and designating an in-state agent for service of process.”);
- Fidrych v. Marriott Int’l, Inc., 952 F.3d 124, 137 (4th Cir. 2020) (“Marriott did not consent to general jurisdiction by complying with South Carolina’s domestication statute.”);
- Waite v. All Acquisition Corp., 901 F.3d 1307, 1320 (11th Cir. 2018) (“Nothing in these provisions’ plain language indicates that a foreign corporation that has appointed an agent to receive service of process consents to general jurisdiction in Florida.”);
- Gulf Coast Bank & Tr. Co. v. Designed Conveyor Sys., L.L.C., 717 F. App’x 394, 397 (5th Cir. 2017) (“Gulf Coast does not identify any statute or agreement that requires foreign entities to expressly consent to any suit in Louisiana.”);
- Lanham v. BNSF Ry Co., 939 N.W.2d 363, 371 (Neb. 2020) (“we join the majority of jurisdictions and hold that a corporation’s registration under [Nebraska’s foreign corporation registration statute] does not provide an independent basis for the exercise of general jurisdiction.”); and
- Genuine Parts Co. v. Cepec, 137 A.3d 123, 126 (Del. 2015) (“[W]e hold that Delaware’s registration statutes must be read as a requirement that a foreign corporation must appoint a registered agent to accept service of process, but not as a broad consent to personal jurisdiction in any cause of action.”).
Indeed, McCall expands the limits of general jurisdiction set forth by the United States Supreme Court in Daimler, 571 at 119, as that decision recognized only three bases for general jurisdiction: (i) principal place of business in the forum State, (ii) the forum State is the business’s state of incorporation, and (iii) “affiliations with the [forum State that] are so continuous and systematic as to render the business essentially at home in the forum State.” Id. None of these bases include mere registration to do business. Though McCall repeatedly stated that Klein (and by extension McCall) cannot be overruled on federal constitutional grounds, the McCall concurrence recognized “a meaningful chance” that McCall’s holding that merely registering to do business subjects an out-of-state corporation to general personal jurisdiction may be overturned as inconsistent with the limits of due process.
Until such time, McCall may have the practical, unintended consequence of discouraging out-of-state corporations from registering to do business in Georgia.