A Balancing Act: The Evolving Limits of Personal Jurisdiction

A court’s ability to hear a lawsuit is governed by a legal principle called “personal jurisdiction.” For a court to summon a business to a particular court, it must establish personal jurisdiction over that business. In other words, personal jurisdiction determines where a party must answer claims in court.

General and Specific Jurisdiction

There are two types of personal jurisdiction – general and specific. Specific jurisdiction is a narrow basis of jurisdiction which requires a defendant to have “minimum contacts” to satisfy due process in a state. In Georgia, a “minimum contact” could be any business activity that touches another state, such as buying from an out-of-state distributor or even passing through a state on the way to make a delivery in another state. However, for specific jurisdiction to apply, the lawsuit must also be related to the company’s activities within that state.

General jurisdiction affords jurisdiction to a state’s court without regard for the subject matter of a case or the company’s activities within that state. This requires a defendant to answer claims in court without regard for their “minimum contacts” with that state. For corporations, general jurisdiction exists where the business is considered at home or its “homecourt.” The current standard for jurisdiction, set by the Supreme Court of the United States with their decision, in Daimler AG v. Bauman, 571 US 117 (2014), requires a state to be the company’s homecourt for general jurisdiction to apply. The “homecourt” of a business is deemed to be both the state where it maintains its principal place of business and the state where the business was incorporated. In light of the Daimler AG case, companies only have one or maybe two states where this type of jurisdiction applies.

The Changing Landscape of Personal Jurisdiction

The Georgia Supreme Court’s decision in Cooper Tire & Rubber Company v. McCall, 312 Ga. 422 (2021), appears to contradict the Supreme Court’s holding in Daimler AG, finding more instances where a company may be subject to general jurisdiction and have more than two “homecourts” where claims can be brought against it regardless of the company’s contacts with the state related to the claim. In the Cooper Tire case, a company incorporated in Delaware with its principal place of business in Ohio, was brought to court in Georgia to face claims for which it did not have “minimum contacts” with the state of Georgia---in other words, the claim arose in another state. But the plaintiff in Cooper Tire contended that Cooper Tire’s filing of a certificate as a foreign entity in the state of Georgia resulted in Cooper Tire as having a “homecourt” in Georgia as well. In a striking departure from the Daimler AG case, the Georgia Supreme Court found a company can have more than just the two “homecourts.”

The Cooper Tire decision greatly expands the reach of general jurisdiction in Georgia and will possibly force corporations to litigate claims in Georgia that have no “minimum contacts” with the state of Georgia because Georgia is deemed to be a “homecourt.” Cooper Tire has since appealed the Georgia Supreme Court’s decision to the United States Supreme Court. In April 2022, the United States Supreme Court agreed to take up a similar case arising from the state of Pennsylvania, Mallory v. Norfolk Southern Railway Co., 142 S.Ct. 2646 (2022). Because the United States Supreme Court selectively choses the cases it wants to hear, there is a good chance that Cooper Tire will ultimately be reversed, but only time will tell.

Mitchell-Handschuh: Atlanta Attorneys for Transportation and Logistics Companies

An experienced attorney can help you draft agreements that effectively address disputes and setoffs, as well as help resolve instances where your payments have been unfairly withheld. If you have questions or need advice about setoffs or unpaid charges, contact the experienced transportation and logistics attorneys at Mitchell-Handschuh, who are always ready to provide assistance.