United States: Washington Court Of Appeals: Registering To Do Business Does Not Constitute Consent To Personal Jurisdiction

As we have previously observed, limits on personal jurisdiction matter because the outcome of litigation is heavily influenced by where a case is filed. Since the Supreme Court confirmed the narrow confines of general jurisdiction in Goodyear Dunlop Tires Operations, S.A. v. Brown, 564 U.S. 915 (2011), and Daimler AG v. Bauman, 571 U.S. 117 (2014), plaintiffs, always eager to engage in litigation tourism, have doggedly tried to expand the bounds of specific jurisdiction, as we reported here, here, and here, for example.

But, because general jurisdiction—which allows a defendant to be sued on any claim, even if it has no relationship to the forum state—is far more potent, plaintiffs have devoted much of their effort to promoting an expansive theory of jurisdiction by consent. Under plaintiffs' theory, a corporate defendant voluntarily subjects itself to general jurisdiction in a state by registering to do business in that state. Because nationally active corporations such as drug and device manufacturers are registered to do business in every state, adoption of plaintiffs' jurisdiction-by-registration theory would effectively abrogate Goodyear and Daimler, which together held that a corporation is subject to general jurisdiction only where it is incorporated or headquartered.

Most states have rejected jurisdiction-by-registration. Next term, in Mallory v. Norfolk Southern Railway, No. 21-1168, the Supreme Court will decide whether the theory is consistent with due process.

Until then, lower courts continue to address the theory. Today we report on Bradley v. Globus Medical, Inc., 2022 WL 2373441 (Wash. Ct. App. 2022), in which Washington's intermediate appellate court held in a medical-device case that registering to do business in a state does not constitute consent to jurisdiction there.

Bradley is odd in that the plaintiff argued that registration to do business in Washington constituted consent to specific rather than general jurisdiction there. That argument doesn't make any sense because a plaintiff can establish specific jurisdiction whether or not a defendant is registered to do business in a state if the plaintiff's claim arises from or relates to the defendant's in-state conduct, which it must for there to be specific jurisdiction. The Bradley plaintiff presumably invoked specific rather than general jurisdiction because an earlier Washington case, Washington Equipment Manufacturing Co. v. Concrete Placing Co., 931 P.2d 170 (Wash. Ct. App. 1997), squarely forecloses any general-jurisdiction-by-registration argument. And she presumably invoked the defendant's registration to do business in Washington because her claims did not arise from the defendant's in-state conduct. In other words, the plaintiff was effectively arguing for general jurisdiction despite claiming to argue for specific jurisdiction.

The misdirection didn't matter. Taking the plaintiff's argument at face value, the Bradley court rejected the contention that registering to do business in a state constitutes consent to specific jurisdiction in that state.

As the court noted, "[d]ue process requires that three elements be met for a court to exercise specific jurisdiction: (1) that purposeful 'minimum contacts' exist between the defendant and the forum state; (2) that the plaintiff's injuries 'arise out of or relate to' those minimum contacts; and (3) that the exercise of jurisdiction be reasonable, that is, that jurisdiction be consistent with notions of 'fair play and substantial justice." Bradley, 2022 WL 2373441, at *3 (quoting Burger King Corp. v. Rudzewicz, 471 U.S. 462).

The court held that mere registration to do business in a state satisfies neither of the first two prongs.

Citing Walden v. Fiore, 571 U.S. 277 (2014), the court held that registration by itself does not establish sufficient "minimum contacts" with a state because "[a] corporation might qualify to do business in states in which it never undertakes business or establishes a presence beyond appointing a registered agent." Bradley, 2022 WL 2373441, at *3.

And, said the court, registration to do business does not mean that a claim arises out of or relates to a corporation's in-state conduct. The court held that even if the plaintiff had alleged that her surgery was performed in Washington that alone would not meet the arising-out-of-or-relating-to standard because she "did not hypothesize how the hardware and screws allegedly designed and manufactured by [the defendant] came to be used in her surgery through some deliberate reaching out into Washington." Bradley, 2022 WL 2373441, at *3. "The fact that [the defendant] is registered to do business in Washington does not fill that gap," the court held, because "being registered does not mean a corporation has activities in Washington or any presence beyond its registered agent." Id.

The consensus against jurisdiction-by-registration continues to hold. Check back later this year to hear how the Supreme Court decides Mallory.

This post was originally published on Drug & Device Law.

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