By Jen Dlugosz on May 2, 2016
On April 18, 2016, the Delaware Supreme Court held that registration of a corporation under the Delaware registration statutes does not subject a corporation to personal jurisdiction for any cause of action in the state. Genuine Parts Co. v. Cepec, Supreme Court C.A. No. 528, 2015. This decision is a change in direction from previous Delaware decisions which held that registration was consent to general jurisdiction. See Sternberg v. O’Neil, 550 A.2d 1105 (Del. 1988). In light of the Supreme Court’s recent decision in Daimler AG v. Bauman, 134 S. Ct. 746 (2014), the court held that Sternberg’s position was no longer tenable.
Plaintiffs Ralph and Sandra Cepec brought a personal injury suit as a result of Ralph Cepec’s exposure to asbestos. Ralph Cepec worked for Genuine Parts Company from 1988 to 1991 in Jacksonville, Florida. Plaintiffs were both residents of Georgia at the time of the suit, and brought suit in Delaware against Genuine Parts and several other defendants. Five of the defendants, excluding Genuine Parts, were Delaware corporations. Genuine Parts, however, is a Georgia corporation that operates NAPA auto-parts stores nationally, including in Delaware. Genuine Parts, though, has never had a corporate office in Delaware and fewer than one-percent of its stores are in Delaware. Genuine Parts is registered to do business in Delaware and designated a registered agent for service of process in Delaware.
Genuine Parts moved to dismiss plaintiffs’ claims for lack of general and specific jurisdiction. The Superior Court denied Genuine Parts’ motion and Genuine Parts submitted an interlocutory appeal of this ruling, which was accepted by the Delaware Supreme Court.
In coming to its decision, the Delaware Supreme Court analyzed its registration statutes, the Supreme Court’s decisions in Goodyear and Daimler, and its previous decision in Sternberg. The court found that Goodyear and Daimler made a major shift in personal jurisdiction jurisprudence—confirming that “only a limited set of affiliations with a forum will render a defendant amenable to all-purpose jurisdiction” and rejecting the notion that a corporation is subject to general jurisdiction in every state in which it “engages in a substantial, continuous, and systematic course of business.” The court noted that nothing in Delaware’s registration statute explicitly states that a corporation consents to jurisdiction by registering. Further, the court reasoned that while states may be able to exercise personal jurisdiction when a corporation faces a cause of action arising out of specific contacts with the state, it is another for every major corporation to be subject to general jurisdiction in all fifty states. The court held that following Daimler, “Delaware‘s registration statutes must be read as a requirement that a foreign corporation must appoint a registered agent to accept service of process, but not as a broad consent to personal jurisdiction in any cause of action, however unrelated to the foreign corporation‘s activities in Delaware.”
State courts across the country continue to wrestle with what constitutes general jurisdiction in asbestos matters post-Daimler. Out-of-state defendants who are sued in Delaware for actions unrelated to Delaware, though, may now expect to be successful on a motion to dismiss for lack of personal jurisdiction. While defendants in lawsuits in Delaware now have a clearer picture of what will satisfy general jurisdiction, it may be some time until further clarity is given in many jurisdictions.