The case of In re Asbestos Products Liability Litigation (No. IV),
No. 18-3622 (E.D. Pa. June 6, 2019 Robreno, J.), which was handed down on Friday, alters the course of
personal jurisdiction law in Pennsylvania relative to corporations.
In reviewing the history of the law on this issue, the
court noted that, in 2014, the United States Supreme Court decided the case of Daimler
AG v. Bauman, 571 U.S. 117 (2014) which brought about “a sea change” in the
jurisprudence of exercising general personal jurisdiction over a foreign
corporation.
In Daimler, the United States Supreme Court
held that under the Due Process Clause, subjecting a foreign corporation to
general jurisdiction in every state in which it “engages in a substantial,
continuous, and systematic course of business” was “unacceptably grasping.”
In this Asbestos Products Liabilty Litigation case, Judge Robreno
noted that, under Daimler, the exercise of general jurisdiction over a
foreign defendant (except in extraordinary circumstances) was limited to where
the corporation was “at home,” namely, to those jurisdictions in which the
foreign corporation was incorporated and where it maintained its principal place
of business.
Judge Robreno noted that, in contrast, Pennsylvania
has long had a statute which requires a foreign corporation wishing to do
business in Pennsylvania to register in Pennsylvania. Correspondingly,
Pennsylvania law provides that such registration constitutes a sufficient basis
for the exercise of general personal jurisdiction over the foreign
corporation.
As such, the courts in Pennsylvania had previously
struggled with how to apply the law of Daimler in Pennsylvania. Judge Robreno boldly laid that struggle to
rest with his decision in the Asbestos Litigation case.
Judge Robreno concluded that: “(1) the Pennsylvania
statutory scheme that requires foreign corporations to register to do business
and, therefore, to consent to general personal jurisdiction in Pennsylvania,
offends the Due Process Clause and is unconstitutional; and (2) the Third
Circuit’s pre-Daimler decision in Bane v. Netlink, Inc., 925 F.2d
637 (3d Cir. 1991), finding that, by
registering to do business in Pennsylvania, a foreign corporation consents to
general personal jurisdiction, is irretrievably irreconcilable with the
teachings of Daimler, and can no longer stand.
As such, it appears that the only way jurisdiction
over foreign corporations can now exist in Pennsylvania is when the corporate
defendant is “at home” here in Pennsylvania.
Stated otherwise, the Asbestos Products Liability Litigation case appears to lay
down a bright line test that limits jurisdiction in Pennsylvania to those
corporations who have a principal place of business in Pennsylvania or which
are incorporated in the state of Pennsylvania.
Anyone wishing to review this In re Asbestos Products Liability Litigation
(No. IV) decision may click this LINK.
UPDATE: In an Order dated June 25, 2019, Judge Robreno certified the issue to the Third Circuit Court of Appeals for a decision as an interlocutory appeal.
UPDATE: In an Order dated June 25, 2019, Judge Robreno certified the issue to the Third Circuit Court of Appeals for a decision as an interlocutory appeal.
I send thanks to Attorneys James M. Beck of the
Philadelphia office of the Reed Smith law firm for bringing this notable
decision to my attention.
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