In a post on October 10, 2021, I shared my thoughts on the Georgia Supreme Court’s recent decision holding that a company that registers to do business in Georgia has ipso facto consented to the general jurisdiction of Georgia courts over lawsuits brought there. I explained this was the minority rule. The New York Court of Appeals recently added clarity to the majority position by holding that companies do NOT consent to general jurisdiction simply because they have registered to do business and have an agent for service of process in the Empire State.
Both the Georgia and New York cases involved very similar product liability claims arising out of auto accidents. In the New York case, Aybar v. Aybar, plaintiffs sued Ford Motor Company, The Goodyear Tire & Rubber Co., and José Aybar for injuries when the vehicle they were passengers in overturned in the State of Virginia. Neither Ford nor Goodyear were incorporated in New York and did not maintain their principal places of business in New York. However, pursuant to the New York Business Corporation Law, to do business in New York foreign corporations must register with the New York Secretary of State and designate an in-state agent for service. As such, plaintiffs attempted to gain personal jurisdiction over Ford and Goodyear in New York by personally serving those entities’ designated agents for service.
Ford and Goodyear moved to dismiss and asserted that personal service on their agents in New York did not confer general jurisdiction over them. The trial court disagreed and declined to dismiss plaintiffs’ claims on the basis that it lacked personal jurisdiction over these entities. The Appellate Division reversed, holding that general jurisdiction could not be exercised over a foreign corporation on the sole basis that the foreign corporation’s designated agent for service was personally served in New York. Plaintiffs appealed to the New York Court of Appeals, New York’s highest court, and it affirmed.
I will keep an eye on the decisions on this topic in future posts. It is only a matter of time before SCOTUS weighs in and hopefully resolves the current split in authority. As I said in my October 10 post, I’m hoping that day is sooner, rather than later.
The New York Court of Appeals … held that, pursuant to the pronouncements by the United States Supreme Court in Daimler, foreign corporations do not consent to general jurisdiction by registering to do business in New York and designating an agent for service pursuant to New York Business Corporation Law. See Aybar v. Aybar, No. 54, 2021 WL 4596367, at *1 (N.Y. Oct. 7, 2021).