Applying Jurisdiction In Today’s Mobile World
In the face of recent Supreme Court decisions, many companies are taking a hard look at what exactly personal jurisdiction looks like. For most, this is easy; it is where they are incorporated or where they are headquartered. But what happens when the headquarters is a “tricked-out” van that allows the company to move freely across the United States or is wherever the CEO’s laptop happens to be? More and more millennials are picking up and running internet-based ventures from their tiny homes, coffee shops, or out of whatever space they land in that day. The question for their lawyers is—where would these corporations be subject to a court’s jurisdiction?
General vs. Personal Jurisdiction
In order for a court to exercise jurisdiction over an entity or individual, the court must have personal jurisdiction over the party. Personal jurisdiction determines whether foreign parties can be sued in the U.S. and in which state a person or an entity can be sued. Jurisdiction over a defendant involves two facets—general and specific jurisdiction. Under Daimler AG v. Bauman, a court may exercise general jurisdiction over a defendant where the defendant is headquartered or at the place of incorporation. But what happens when the defendant does not have a headquarters in the traditional sense?
Daimler did not foreclose the possibility that in an exceptional case, a corporation’s operations in a forum other than its formal place of incorporation or principal place of business may be so substantial and of such a nature as to render the corporation at home in that state, pointing to its prior ruling that a corporation’s contacts were sufficient to exercise general jurisdiction because its president moved to Ohio, where he kept an office, maintained the company files and oversaw the company’s activities. Thus, it is possible that a defendant’s activities in a state may render it subject to general jurisdiction even if it does not have a principal place of business in the forum state.
Activities Can Help Establish Jurisdiction
To determine whether jurisdiction is proper in a particular case, a court may look at the activities at issue, not just the location of a defendant’s physical headquarters. In that case, jurisdiction could be proper anywhere the open road takes a mobile defendant—the coffee shop or even the CEO’s tricked-out van.