Home Sweet Home: How New York Courts Have Dealt with Daimlers "At Home" Requirement for General Jurisdiction

By Lipshie, Burton N. | Albany Law Review, Summer 2019 | Go to article overview

Home Sweet Home: How New York Courts Have Dealt with Daimlers "At Home" Requirement for General Jurisdiction


Lipshie, Burton N., Albany Law Review


I. INTRODUCTION

In Daimler AG v. Bauman, (1) almost certainly its most important jurisdiction decision in some seventy years, an eight-Justice majority of the Supreme Court essentially rewrote the law of general jurisdiction. (2) The result is that a corporation will, with narrow exceptions, only be subject to general jurisdiction in the states in which it is either incorporated or maintains its principal place of business; in the Court's language, a state in which the corporation is "at home." (3) The once familiar standard for general jurisdiction--corporate "presence" in a state in which it "does business" both "continuously and systematically"--has been abrogated, except, possibly, in "exceptional" cases. (4) Additionally, the Court announced that the "paradigm" place where an individual is "at home" is where that individual is domiciled. (5)

The Court issued a sweeping opinion on the constitutional limits of presence jurisdiction and, in the process, swept away decades of New York CPLR 301 jurisprudence. (6) First, the Court rejected the argument, accepted and followed by many Circuits, that when a local agent performs services for the foreign principal that are so important that "if it did not have a representative to perform them, the corporation's own officials would undertake to perform substantially similar services," the presence of the agent in the state makes the principal present in that state. (7) That test, said the Court, "stacks the deck," because "it will always yield a pro-jurisdiction answer." (8)

Instead, the Court relied heavily on--and expanded upon--its decision in Goodyear Dunlop Tires Operations, S.A. v. Brown, saying that

Goodyear made clear that only a limited set of affiliations with a 
forum will render a defendant amenable to all-purpose jurisdiction 
there. "For an individual, the paradigm forum for the exercise of 
general jurisdiction is the individual's domicile; for a corporation, 
it is an equivalent place, one in which the corporation is fairly 
regarded as at home." (9)

And, for a corporation, "the place of incorporation and principal place of business are 'paradig[m]... bases for general jurisdiction.'" (10) The Court recognized that "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." (11) The Court went on to state, "[p]laintiffs 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." (12)

This marks a dramatic change in the law. In New York, the formulation proposed by the Daimler plaintiffs had been the law since then-Judge Cardozo's 1917 opinion in Tauza u. Susquehanna Coal Company. (13) The majority opinion cites Tauza, and proclaims that it was "decided in the era dominated by Pennoyer [v. Neff]'s territorial thinking, [and] should not attract heavy reliance today." (14) The new standard articulated by the Court is that the inquiry "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.'" (15) The Court acknowledged

the possibility that in an exceptional case, 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. But this case presents no 
occasion to explore that question, because Daimler's activities in 
California plainly do not approach that level. It is one thing to hold 
a corporation answerable for operations in the forum State, quite 
another to expose it to suit on claims having no connection whatever to 
the forum State. … 

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