Consent to Judicial Jurisdiction: The Foundation of 'Registration' Statuses
73 N.Y.U. Ann. Surv. Am. L. 159 (2018)
44 Pages Posted: 12 Jun 2018
Date Written: June 2018
This Article demonstrates the continuing validity of “registration” as a basis for general personal jurisdiction over foreign corporations. All fifty states require foreign corporations to “register” with a designated official if they “do business” in the state. Registration typically requires the registering corporation to designate a state official as an agent for the service of process on the corporation. A few states interpret the registration and the concurrent designation as consent to the exercise of general jurisdiction over the registrant. While this method of obtaining jurisdiction was upheld by the Supreme Court one hundred years ago, two recent decisions by the Court sharply limit the situations in which corporations can be subjected to general jurisdiction. They hold that a corporation can be subject to general jurisdiction only where it is incorporated or has its principal place of business. Courts and commentators have subsequently differed as to whether registration-based general jurisdiction remains constitutional.
The argument against general jurisdiction by registration is that it undermines the core holding of Goodyear and Daimler. Consent by registration, the argument goes, does not avoid the limitations of those cases because the consent is not freely given. Another objection is based on a prediction that many states that have not previously adopted registration jurisdiction will do so in order to “get around” the due process limitation of Goodyear/Daimler. Finally, objectors argue that potential registrants’ due process rights are violated because they do not get formal notice of the jurisdictional effect.
None of these objections are sound. Neither Daimler nor Goodyear deal with the role of corporate registration. Nor do they in any way challenge the broad doctrine of consent to jurisdiction which continues to exist as an independent and viable means of exercising jurisdiction. (The Supreme Court has invariably upheld state judicial jurisdiction based on implicit or explicit consent. Second, consent by registration is not compulsory. Firms can and do decide whether to “do business” in a state, much as they consider other state laws, taxes, etc. Third, there is no empirical or other indication that the many states that have not adopted registration-based jurisdiction are likely to do so now. In fact, none have done so since Goodyear Dunlop was decided in 2011. Apparently, many states prefer not to have registration jurisdiction. Finally, the lack of explicit notice of registration’s jurisdictional effect can hardly be a constitutional impediment. There is no such constitutional requirement. For example, no explicit warning is given to an individual who enters a state, or a firm that incorporates in a state, or a corporation sets up a principal place of business in a state. Yet, general jurisdiction is a result of all of those acts. Jurisdiction by registration remains valid.
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