The narrow scope of “fallback” general jurisdiction after Daimler

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

Pretty darn narrow. 

In Goodyear, the Court noted that general personal jurisdiction would exist where the contacts were so continuous & systematic that the defendant was “essentially at home.” This would be satisfied against a corporation in its principal place of business (PPOB) and where it is incorporated, and against an individual in her or his domicile. The Court did not, however, address the extent to which other places with continuous and systematic contacts might qualify for general jurisdiction.

The Court gave some guidance regarding this question in Daimler AG v. Bauman, where the Court noted that systematic and contiunous contacts are not enough for general jurisdiction:

Goodyear did not hold that a corporation may be subject to general jurisdiction only in a forum where it is incorporated or has its principal place of business; it simply typed those places paradigm all-purpose forums. Plaintiffs would have us look beyond the exemplar bases Goodyear identified, and approve the exercise of general jurisdiction in every State in which a corporation ‘engages in a substantial, continuous, and systematic course of business.’ That formulation, we hold, is unacceptably grasping.”

This is important: the Court reminds us that under the Goodyear formulation, it’s not enough that the defendant’s contacts are continuous & systematic. Instead (emphasis added):

“[T]he inquiry under Goodyear 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.'” 

That means that more must be shown than contacts that are continuous and systematic. The defendant must also essentially be at home. That brings us to the money question: for a corporation, where might it be “at home” besides PPOB or place of incorporation? Daimler footnote 19 addresses this question, albeit obliquely:

“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.”

I’m going to call FN19 jurisdiction “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 Court says that the 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.

So what kind of continuous and systematic — but not PPOB or Inc. — contacts might render a corporation at home in a state? The citation in FN19 to Perkins is instructive. Recall that Perkins involved a Phillipine 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. In Perkins, personal jurisdiction was upheld, and the Court has since cited repeatedly to Perkins as an example of general jurisdiction. 

Read FN 19 again. Note that the Court cites Perkins as an example of fallback general jurisdiction. The Court notes that the company was neither incorporated or PPOB’ed in Ohio, but that there was general jurisdiction. 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. 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? 

Only future cases can tell for sure, but a few things are certain:

  1. Systematic and continuous contacts alone are no longer sufficient for general jurisdiction.
  2. The defendant must also be “essentially at home.”
  3. For corporations, this place will usually be PPOB or place of incorporation.
  4. The fallback for general jurisdiction will probably be very narrowly interpreted.

Many thanks to class member Claudia Gallego for a thoughful post-class discussion that helped prompt this posting.

Leave A Reply

Your email address will not be published. Required fields are marked *

seven + fifteen =