For years, the scope of personal jurisdiction over corporate defendants has expanded significantly through the reliance on tenuous corporate contacts or business conducted by a defendant in a particular forum. Recently, however, that all changed when the United States Supreme Court issued its decisions in Daimler AG v. Bauman, 564 U.S. 915 (2014), BNSF Railway Co. v. Tyrrell, 137 S.Ct. 1549 (2017), and Bristol-Myers Squibb v. Superior Court of California, 137 S.Ct. 1773 (2017), which significantly strengthened the requirements for exercising personal jurisdiction over corporate defendants. Combined, these three decisions are critical for corporate entities that find themselves embroiled in maritime litigation, as these cases have significantly limited where plaintiffs can bring claims and, in turn, have substantially curtailed the practice of litigation tourism and forum shopping as a result of the limitations that have been placed on a forum state’s exercise of personal jurisdiction.
The Big Three: Daimler, Tyrrell, and Bristol-Myers Squibb
There are two types of personal jurisdiction. The first, known as specific jurisdiction, encompasses cases in which the suit arises out of or relates to the defendant’s contacts with the forum. For specific jurisdiction to exist, a plaintiff’s action must arise out of a defendant’s forum-related activities. The second, general jurisdiction, is exercisable when a foreign corporation’s “continuous corporate operations within a state [are] 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.”
For years, courts and litigants have operated under the general rule that a court may exercise personal jurisdiction over a corporate defendant in any state where the company maintains “continuous and systematic” business contacts. As a result, businesses have been long subjected to being sued in any state across the country, regardless of strength of the business’s connection to the forum. The expansive scope of personal jurisdiction resulted in significant, egregious litigation tourism and forum shopping by plaintiffs’ attorneys in maritime actions, as plaintiffs took advantage of the significant leeway they had in filing large numbers of lawsuits in a select few extremely plaintiff-friendly courts, many of which are commonly known as some of the worst “judicial hellholes” for litigating these types of complex lawsuits. Continue reading “Utilizing the Changing Landscape of Personal Jurisdiction”