International Arbitration Practice Group
May 4, 2017
Courts Continue to Struggle with Jurisdiction by Consent
Introduction1
On January 26, 2017, the U.S. District Court for the Southern District of New
York (S.D.N.Y.) decided Famular v. Whirlpool Corp.,2 a case addressing the
circumstances in which an out-of-state corporation may be deemed to have
consented to the jurisdiction of New York courts. Specifically, Famular dealt
with the “consent-by-registration” theory, which holds that a foreign
corporation may consent to the general jurisdiction of a state’s courts by
registering to do business in that state and appointing an in-state agent for
service of process. The key issue addressed by the district court was whether
consent-by-registration theory, which had been recognized in several
previous decisions, remains valid the wake of the U.S. Supreme Court’s 2014
decision in Daimler AG v. Bauman,3 which greatly limited courts’ ability to
exercise general personal jurisdiction over a non-domiciliary defendant on the
basis that the defendant was “doing business” within the forum state. The
continued validity of the consent-by-registration theory after Daimler has
been a point of disagreement among U.S. federal courts,4 and resolution of
this disagreement is likely to have significant implications for plaintiffs
seeking to bring suit against foreign defendants in U.S. courts. In Famular,
the district court ultimately concluded that the consent-by-registration theory
is no longer a valid basis for the exercise of general personal jurisdiction after
Daimler. This decision thus narrows the ability of plaintiffs to bring suits
against foreign defendants in New York federal courts, and may have further
implications for the theory of consent-by-registration if its reasoning is found
persuasive in other jurisdictions.
History of Consent-by-Registration
The notion that a court may exercise jurisdiction over an out-of-state
defendant solely on the basis of that defendant’s registration to do business in
the forum state has a long history. It stems largely from the 1917 case of
Pennsylvania Fire Insurance Co. v. Gold Issue Mining & Milling Co., in
which the U.S. Supreme Court ruled that a company that had registered to do
business in Missouri – and that had designated a Missouri public official as
agent for the service of process – had consented to the jurisdiction of
Missouri state courts.5
While Pennsylvania Fire was decided prior to many of the seminal Supreme
Court cases addressing personal jurisdiction, many lower federal courts have
For more information, contact:
James E. Berger
+1 212 556 2202
jberger@kslaw.com
Charlene C. Sun
+1 212 556 2107
csun@kslaw.com
King & Spalding
New York
1185 Avenue of the Americas
New York, New York 10036-4003
Tel: +1 212 556 2100
Fax: +1 212 556 2222
www.kslaw.com
