The Changing Jurisdictional Effect Of State Business Registration Statutes
The law of personal jurisdiction is dry and technical, and therefore so is this article. Boring as it may be, the requirement that a court have personal jurisdiction over a party ensures that lawsuits are only brought in jurisdictions where the parties have some connection.
Plaintiffs in Minnesota have long benefitted from the Minnesota Supreme Court and Eighth Circuit’s interpretations that the state business registration statute conveys a broad form of jurisdiction over companies registered here. See Rykoff-Sexton, Inc. v. Am. Appraisal Assocs., Inc., 469 N.W.2d 88, 90-91 (Minn. 1991); Knowlton v. Allied Van Lines, Inc., 900 F.2d 1196, 1199-1200 (8th Cir. 1990) (construing Minn. Stat. § 303.13, subd. 1(1)). Nationally, however, an emerging trend is limiting such expansive exercises of jurisdiction, and recent conflicting decisions from district courts within the Eighth Circuit suggest that the law may be ripe for reinterpretation.
The U.S. Supreme Court has long held that there are two types of personal jurisdiction: general and specific. Early opinions regarding general personal jurisdiction focused on whether a defendant had “continuous corporate operations within a state” that were “so substantial and of such a nature as to justify suit against it on causes of action arising from dealings entirely distinct from those activities.” International Shoe Co. v. Washington, 326 U.S. 310, 318 (1945). By comparison, specific personal jurisdiction requires that the jurisdictional nexus arise out of contacts with the forum, and typically limits claims only to harms arising from that particular conduct. Id.
A trio of recent U.S. Supreme Court decisions has progressively narrowed the application of general personal jurisdiction. See BNSF Ry. Co. v. Tyrrell, No. 16-405 (Slip Op. May 30, 2017); Daimler AG v. Bauman, 134 S. Ct. 746 (2014); Goodyear Dunlop Tire Operations, S.A. v. Brown, 564 U.S. 915 (2011). These modern interpretations of the scope of general personal jurisdiction allow a lawsuit only where a company can be fairly said to be at “home,” absent exceptional circumstances. Id. This trend marks a clear preference by the U.S. Supreme Court to limit the ability of corporations to be sued in states where they have few contacts.
A third category of jurisdiction frequently relied on to hale a defendant into court is “consent” to suit via state business registration statutes. Whether a business registration statute can be an independent basis for an exercise of general personal jurisdiction has not been directly addressed by the U.S. Supreme Court’s recent decisions. Instead, the interaction between general personal jurisdiction and business registration statutes has been left to state and lower federal courts, with conflicting results. Read more.
