Law Offices of John C. Lane
100-Year-Old Cardozo Decision No Longer Good Law
In 2014 the U.S. Supreme Court held in Daimler AG v. Bauman that a State may not exercise general jurisdiction over a corporation for activities occurring in a different state (“general jurisdiction") unless the corporation’s affiliations with the State “are so constant and pervasive as to render it essentially at home in the forum State.” Since then courts and parties have pondered the dual questions of what constitutes constant and pervasive association; and whether a corporation’s registration to do business in the forum state constitutes consent to general jurisdiction. In Aybar v. Aybar, The New York Appellate Division, Second Department, ruled on January 29, 2019, that it does not. In so doing, the New York court held that a contrary decision authored by the legendary Judge Benjamin Cardozo 100 years ago is no longer good law.
The Aybar case involved a terrible single-car rollover accident in Virginia, caused by a tire blowout and resulting in multiple serious injuries and deaths. The plaintiffs brought suit in their home state of New York against Ford Motor Company and Goodyear Tire & Rubber Co., arguing that both large corporations had vast associations with New York, and that by registering to do business in the State, had consented to be sued here, even for acts occurring outside New York. The New York court ruled against plaintiffs. Despite the significant contacts both companies have with New York, they are not sufficient to render the companies “essentially at home” in the State. The court also rejected the argument that registering to do business in New York constitutes consent to be sued for activities occurring outside the State.
Relying upon the Supreme Court’s decision in Daimler, the Appellate Division explained that “it cannot be said that a corporation’s compliance with existing business registration statutes constitutes consent to the general jurisdiction of New York courts, to be sued upon causes of action that have no relation to New York (emphasis added).” The court directed that the complaint be dismissed as against Ford and Goodyear for lack of in personam jurisdiction.
© March 2019, Law Offices of John C. Lane
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