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«THERE’S NO PLACE LIKE “ESSENTIALLY AT HOME”: GENERAL JURISDICTION AFTER DAIMLER AG V. BAUMAN NICKOLAS GALENDEZ** I.! INTRODUCTION I. GENERAL ...»

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THERE’S NO PLACE LIKE “ESSENTIALLY AT

HOME”: GENERAL JURISDICTION AFTER

DAIMLER AG V. BAUMAN

NICKOLAS GALENDEZ**

I.!

INTRODUCTION

I. GENERAL JURISDICTION IN GENERAL

A. International Shoe Co. v. Washington

B. Perkins v. Benguet Consolidated Mining Co.

C. Helicopteros Nacionales de Colombia v. Hall

D. Goodyear Dunlop Tires Operations, S.A. v. Brown

II. DAIMLER AG V. BAUMAN

A. Background Facts and Procedural History

B. Justice Ginsburg’s Majority Opinion

C. Justice Sotomayor’s Concurring Opinion

D. Sotomayor’s Concerns with the Proportionality Test

III. THE IMPACT OF BAUMAN ON GENERAL JURISDICTION

A. Adopting the Proportionality Test

B. Justifications for the Proportionality Test

1. Reciprocity

2. Predictability

3. State Sovereignty and Convenience

CONCLUSION

II.! INTRODUCTION Deep within the “vague contours”1 of the Fourteenth Amendment’s Due Process Clause2 and down the yellow brick road of personal jurisdiction exist two equally vague concepts: specific jurisdiction and general jurisdiction.3 Following the Court’s 2011 decision in Goodyear Dunlop Tires Rochin v. California, 342 U.S. 165, 170 (1952).

U.S. Const. amend. XIV. (“[N]or shall any State deprive any person of life, liberty, or property, without due process of law....”).

See, e.g., Lea Brilmayer et al., A General Look at General Jurisdiction, 66 TEX. L. REV. 721, 724 (1988) (arguing that the Supreme Court’s rules and analysis in general jurisdiction cases “provide some guidance,” but courts are uncertain about “the exact status and boundaries of general jurisdiction”); Mary Twitchell, The Myth of General Jurisdiction, 101 HARV. L. REV. 610, 629-30 (1988) (explaining that “the confusion in contemporary approaches to general jurisdiction” exists because “courts have no clear concept of what general jurisdiction is”); Howard M. Erichson, The Home-State Test for General Personal Jurisdiction, 66 VAND. L. REV. EN BANC 81, 81-82 (admitting that “[t]he standard for general jurisdiction remains unsatisfactorily vague, with ambiguous Supreme Court guidance on doctrine”); Carol Andrews, Another Look at Personal Jurisdiction, 47 WAKE FOREST L. REV. 999, 1001 (2012) (mentioning how the Supreme Court’s

GALENDEZ

Fall 2015 THERE’S NO PLACE LIKE “ESSENTIALLY AT HOME” 2

Operations, S.A. v. Brown,4 and in anticipation of Daimler AG v. Bauman,5 several scholars hoped that the Supreme Court would take advantage of the next opportunity to clarify the meaning of “essentially at home”6 and provide lower courts with additional guidance when conducting general jurisdiction analysis.7 Unfortunately, in holding that California’s exercise of general jurisdiction over a foreign corporation violated the Due Process Clause, the Bauman Court neither clarified the existing law nor simplified the analysis.8 On the contrary, Bauman narrowed the scope of general jurisdiction while creating an additional layer of analysis for lower courts, arguably resulting in uncertainty for both small and large corporations alike.9 In footnote 20 of the Court’s opinion, Justice Ginsburg explained that “[g]eneral jurisdiction... calls for an appraisal of a corporation’s activities in their entirety, nationwide and worldwide.”10 While concurring in the judgment, Justice Sotomayor wrote separately to criticize the Court for “decid[ing] this case on a ground that was neither argued nor passed below, and that Daimler raised for the first time in a footnote to its brief.”11 Furthermore, she took issue with what she called the Court’s proportionality vague standard for determining when general jurisdiction exists causes confusion); Harold S.

Lewis, Jr., The Three Deaths of “State Sovereignty” and The Curse of Abstraction in the Jurisprudence of Personal Jurisdiction, 58 NOTRE DAME L. REV. 699, 699 (1983) (criticizing the area of law of as “vague, and counterproductive and unworkable”); Christopher D. Cameron & Kevin R. Johnson, Death of a Salesman?: Forum Shopping and Outcome Determination Under International Shoe, 28 U.C. DAVIS L. REV. 769, 773 (1995) (discussing how the lack of a clear rule creates uncertainty for lower courts and results in “serious injustice”); cf. Erwin Chemerinsky, Assessing Minimum Contacts: A Reply to Professors Cameron and Johnson, 28 U.C. Davis L. Rev.

863, 866-68 (1995) (acknowledging that vague standards may lead to uncertainty, but claiming that those standards properly drive the inquiry toward the concepts of fairness and due process which are at “the core of personal jurisdiction”).

Operations, S.A. v. Brown, 131 S. Ct. 2846 (2011).

Daimler AG v. Bauman, 571 U.S. ___ (2014).

Goodyear, 131 S. Ct. at 2851 (2011) (announcing the rule that “[a] court may assert general jurisdiction over foreign... corporations to her any and all claims against them when their affiliations with the State are so ‘continuous and systematic’ as to render them essentially at home in the forum State”) (citing International Shoe Co. v. Washington, 326 U.S 310, 317 (1945)) (emphasis added).





See, e.g., Lonny Hoffman, Further Thinking About Vicarious Jurisdiction: Reflecting on Goodyear v. Brown and Looking Ahead to Daimler AG v. Bauman, 34 U. PA. J. INT’L L. 765 (2013);

Taylor Simpson-Wood, In the Aftermath of Goodyear Dunlop: Oyez! Oyez! Oyez! A Call for A Hybrid Approach to Personal Jurisdiction in International Products Liability Controversies, 64 BAYLOR L. REV. 113 (2012); Patrick J. Borchers, J. McIntyre Machinery, Goodyear, and the Incoherence of the Minimum Contacts Test, 44 CREIGHTON L. REV. 1245 (2011). See also Erichson, supra note 3, at 83 (explaining how Bauman would “offer[] the Court an opportunity to clarify the general jurisdiction standard” in Goodyear).

Bauman, 571 U.S. ____, slip op. at 16-19 (Sotomayor, J., concurring).

Id.; Charles W. “Rocky” Rhodes, Clarifying General Jurisdiction, 34 SETON HALL L. REV 807, 810 (noting that a vague general jurisdiction doctrine’s “resulting lack of predictability contravenes notions of both fairness and efficiency”).

Id., slip op. at 21 n.20 (majority opinion).

Id., slip op. at 2 (Sotomayor, J., concurring) (citing Brief for Petitioner, at 31-32 n.5).

GALENDEZ

Fall 2015 THERE’S NO PLACE LIKE “ESSENTIALLY AT HOME” 3

test and outlined four reasons why the new rule would lead to unfair results.12 Regardless of her reservations about the Court’s rationale, Justice Sotomayor concluded “that no matter how extensive Daimler’s contacts with California, that State’s exercise of [general] jurisdiction would be unreasonable.”13 In light of Bauman, the yellow brick road of general jurisdiction appears to have vanished into thin air because now, there really is no place like “essentially at home.”14 As Justice Sotomayor suggested, the Court abandoned its “settled approach” in Bauman and effectively limited general jurisdiction to a foreign defendant’s place of incorporation or principal place of business.15 In her opinion, the Court’s proportionality test was inconsistent with principles of fairness and reasonableness because the new rule favored “national and multi-national conglomerates” over smaller companies.16 Additionally, Justice Sotomayor emphasized the absurdity of treating individuals and corporations differently for the purposes of general jurisdiction.17 Finally, she concluded, the Court’s approach in Bauman offended due process by rendering plaintiffs unable to sue anywhere in the United States where no other judicial system is available.18 However, despite Justice Sotomayor’s concerns, the Court must take advantage of the next opportunity to address general jurisdiction by fully adopting the Court’s proportionality test as an additional element in analyzing “essentially at home.” After Bauman, general jurisdiction should be exercised over a foreign corporation in cases when its “affiliations with the [forum] State are ‘so continuous and systematic,’” when viewed in light of its nationwide and worldwide activities,19 “as to render them essentially at home in the forum State.” If fully adopted by the Court, rather than hidden in a footnote, the Court’s proportionality test would neither stray from International Shoe nor violate the Due Process Clause; in fact, the new rule would result in greater fairness and reasonableness in today’s modern world.20 Id., slip op. at 16-19.

Id., slip op. at 2.

See Bauman, slip op. at 19 (Sotomayor, J., concurring).

Id., slip op. at 16 (“Suppose a company divides its management functions equally among three offices in different States, with one office nominally deemed the company’s corporate headquarters.

If the State where the headquarters is located can exercise general jurisdiction, why should the other two States be constitutionally forbidden to do the same?”).

Id., slip op. at 17 (“Whereas a larger company will often be immunized from general jurisdiction in a State on account of its extensive contacts outside the forum, a small business will not be.”).

Id., slip op. at 18 (explaining how an individual who possesses a single contact in a forum State is more susceptible to a State’s jurisdiction than “a large corporation that owns property, employs workers, and does billions of dollars’ worth of business in the State”).

Id., slip op. at 19.

Id., slip op. at 21 n. 20 (majority opinion).

See infra Part III.B and C & accompanying text; see also Donald Earl Childress III, General Jurisdiction and the Transnational Law Market, 66 VAND. L. REV. EN BANC 67, 78 (“[T]he importance of clear rules that denote where a foreign corporation is subject to suit are paramount”).

GALENDEZ

Fall 2015 THERE’S NO PLACE LIKE “ESSENTIALLY AT HOME” 4

Part I of this Note explores personal jurisdiction from its roots in the landmark case of International Shoe Co. v. Washington21 to the Court’s three general jurisdiction cases prior to Bauman: Perkins v. Benguet Consolidated Mining Co.,22 Helicopteros Nacionales de Colombia, S.A. v. Hall,23 and Goodyear Dunlop Tires Operations S.A. v. Brown.24 Part II first sets forth the background and procedural history of Bauman, and then discusses the Court’s opinion and Justice Sotomayor’s concurrence to reconcile the differences between the two. Part III of this Note suggests that the Court should expressly adopt the proportionality test to complement the “essentially at home” analysis. Furthermore, Part III reconciles Bauman with earlier general jurisdiction precedent, provides a theoretical justification for adopting the proportionality test, and addresses other concerns that may surface post-Bauman.

III.! I. GENERAL JURISDICTION IN GENERAL

Black’s Law Dictionary defines jurisdiction as the “[a] government’s general power to exercise authority over all persons and things within its territory.”25 Personal jurisdiction concerns the ability of a court to exercise its authority “over the defendant’s person, his property, or the rest that is subject of the suit.”26 Before 1945, the scope of personal jurisdiction was far narrower than today.27 However, in International Shoe Co. v.

Washington,28 the Court changed personal jurisdiction jurisprudence and the doctrine’s scope was expanded in response to “the nation’s increasingly industrialized economy, the advent of high speed transportation and communication, and the mobility of the population.”29

A. INTERNATIONAL SHOE CO. V. WASHINGTON

In International Shoe Co. v. Washington, the Court addressed the question of whether International Shoe’s corporate activities in Washington justified the exercise of personal jurisdiction over the corporation.30 International Shoe Co. v. Washington 326 U.S. 310 (1945).

Perkins v. Benguet Consolidated Mining Co, 342 U.S. 437 (1952).

Helicopteros Nacionales de Colombia, S.A. v. Hall 466 U.S. 408 (1984).

Goodyear, 131 S. Ct 2846 (2011).

Black’s Law Dictionary (9th ed. 2009).

4 CHARLES ALAN WRIGHT ET AL, FEDERAL PRACTICE AND PROCEDURE § 1063 (3d ed. 1998).



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