Since it was first published in 2014, the US Supreme Court’s decision in Daimler AG v. Bauman has been reshaping the personal-jurisdiction landscape. Delaware recently became the latest jurisdiction to rely on Daimler AG to restrict the parties over which its courts can exercise general personal jurisdiction. The Delaware Supreme Court’s decision in Genuine Parts Co. v. Cepec makes clear that courts no longer have general jurisdiction over a corporate defendant merely because it registered to do business in the state and appointed an in-state agent to receive service of process. Barring exceptional circumstances, Delaware courts’ general personal jurisdiction over corporations is limited to those entities that are incorporated, or maintain their principal place of business, in Delaware.
In Genuine Parts Co. v. Cepec, a Georgia resident sued a Georgia corporation, among others, in Delaware state court. The plaintiff alleged that he developed mesothelioma because the defendant exposed him to asbestos in Florida. The defendant moved to dismiss the plaintiffs’ claims for lack of personal jurisdiction, but the trial court denied the defendant’s motion. Relying on an earlier Delaware Supreme Court decision, the trial court held that the defendant had consented to Delaware’s general jurisdiction because it had registered to do business in the state and had appointed an agent to accept service of process. The defendant petitioned for interlocutory appeal, which Delaware’s Supreme Court granted.
The defendant presented two arguments on appeal. First, the defendant argued that under the US Supreme Court’s recent ruling in Daimler AG v. Bauman, exercising general personal jurisdiction over it based on its minimal contacts with the state violated its right to due process. The defendant also argued that registering and appointing an agent—as required by Delaware law—did not constitute consenting to personal jurisdiction.
The plaintiffs countered that, as Delaware’s Supreme Court previously had held, registering to do business and appointing an agent did constitute consent to personal jurisdiction; and although due-process is relevant when determining whether a court can exercise specific or general jurisdiction over a defendant, the plaintiffs argued, it is irrelevant where the court gains jurisdiction by consent. Therefore, the plaintiffs urged, the court had jurisdiction by consent, and Daimler and its due-process concerns were irrelevant.
Delaware Supreme Court’s Ruling
The Supreme Court agreed with the defendant and reversed the lower court’s ruling. Daimler—and its predecessor, Goodyear Dunlop Tires Operations, S.A. v. Brown—made clear that a corporation can be subject to general jurisdiction only if the corporation’s affiliation with the state is so continuous and systematic it “essentially [is] at home in the forum,” the Court explained. Other than the occasional “exceptional case,” a corporation is at home only in the state in which it is incorporated or the state in which it has its principal place of business. The defendant was incorporated in Georgia, had its principal place of business in Georgia, and had minimal contacts with Delaware. Thus, the Court concluded, although the defendant had registered to do business in Delaware and had appointed an agent to accept service of process, Delaware’s courts lacked general personal jurisdiction over the defendant.
The Court next rejected the plaintiffs’ argument that by complying with Delaware’s registration statute, the defendant consented to personal jurisdiction. The Court began by acknowledging that its prior decisions had interpreted complying with Delaware’s registration statute as consenting to personal jurisdiction. But it noted that those decisions were guided by the US Supreme Court’s pre-Daimler jurisprudence. In light of Daimler’s reasoning that a corporation cannot be “at home” in every state in which it does business, the Delaware Supreme Court revisited Delaware’s registration statute and found it silent on the issue of personal jurisdiction. The Court therefore held that registering to do business in Delaware and appointing an agent to accept service of process did not constitute consenting to personal jurisdiction.
Although the Court took great care to disturb as little of its precedent as possible, its decision greatly alters Delaware law on general jurisdiction and jurisdiction by consent. For a court to have general jurisdiction over a corporation going forward, the corporation likely will have to be incorporated in Delaware or maintain its principal place of business there.
We note, too, that some of the arguments the Delaware Supreme Court articulated in the Cepec decision could apply equally to Pennsylvania. Pennsylvania’s long-arm statute states that the Commonwealth has general personal jurisdiction over any entity that qualifies as a foreign corporation under the Commonwealth’s laws. But Daimler, Brown, and Cepec suggest that exercising general personal jurisdiction over entities that, at most, conduct a minor amount of business in the Commonwealth, may be unconstitutional. Foreign defendants sued in Pennsylvania state courts for conduct unrelated to their activity in Pennsylvania may wish to challenge the court’s general personal jurisdiction over them, if only to preserve the issue for appeal.