"General Jurisdiction" Becomes Political Football in NY

For decades, plaintiffs have been able to allege that defendants were subject to general personal jurisdiction in New York because the defendants maintained offices or transacted business in New York. This long-accepted understanding of the law changed in January 2014, when the Supreme Court handed down its opinion in Daimler AG v. Bauman.

In Daimler, the Court held that general personal jurisdiction exists over a corporation only if the corporation may be “fairly regarded as at home” in the forum state. Today it is apparent that “doing business” as a basis for finding general jurisdiction is dead. Nonetheless, it may soon return.

The New York State Senate Standing Committee on the Judiciary has approved a bill that would require foreign companies to submit to the jurisdiction of New York courts as a condition of doing business in the state. A similar bill was passed by the New York State Assembly in May. New York’s Office of Courts Administration supports the legislation as a means of increasing corporate litigation in New York courts and making it easier for New Yorkers to sue foreign corporations.

However, the New York City Bar Association opposes Albany’s proposals. It says they probably violate the Commerce Clause, and that they ignore the fact that governments can’t require the waiver of constitutional rights in exchange for a government benefit – in this case, registration to do business – where the benefit is wholly unrelated to the right.