Philadelphia Court of Common Pleas Affirms that Consent to Jurisdiction Through Registration as a Foreign Corporation is Still Good Law

leo serrat 533364 unsplash - Philadelphia Court of Common Pleas Affirms that Consent to Jurisdiction Through Registration as a Foreign Corporation is Still Good Law

On October 12, 2017, Judge Marlene F. Lachman of the Philadelphia Court of Common Pleas ruled that consent to jurisdiction remains good law in Philadelphia County following the Supreme Court’s decisions in Daimler, BNSF, and Bristol-Myers Squibb.

Judge Lachman focused her ruling on the fact that by choosing to do business in Pennsylvania, and by voluntarily registering as a “foreign corporation” under 15 Pa.C.S. §411, the registering corporation has consented to jurisdiction pursuant to 42 Pa.C.S.§ 5301(a)(2)(i). She noted that the stated purpose of the registration statute is “to bring foreign corporations doing business in this state within the reach of legal process. The act is for the protection of those with whom such corporations do business or to whom they may incur liabilities by their wrongful acts.” Therefore, when a corporation chooses to register as a “foreign corporation” in Pennsylvania, it purposefully avails itself of the privilege of conducting activities within Pennsylvania and consents to jurisdiction in our courts. 42 Pa.C.S §5301(a)(2).

The United States Supreme Court first upheld the concept of consent to personal jurisdiction by registering as a foreign corporation in 1917 with its decision in Pa. Fire Ins.  Co. of Phila. v. Gold Issue Mining & Milling Co., 243 U.S. 93, 95 (1917). In that case, the Supreme Court held that Pennsylvania Fire Insurance Company, although based in Pennsylvania, consented to personal jurisdiction in Missouri by appointing an agent in Missouri for service of process under a Missouri statute. Further, in 1991 the Pennsylvania Superior Court addressed the issue of consent with its decision in Simmers v. American Cyanamid Corp., 394 Pa. Super. 464, 474, 576 A.2d 376, 382 (1990) stating that “by virtue of 42 Pa.C.S.A §5301, when a foreign corporation has voluntarily registered itself to do business here, the courts of this Commonwealth may exercise jurisdiction over the foreign corporation regardless of whether the cause of action being prosecuted is related to the corporation’s activities in Pennsylvania.” More recently, both the 3rd Circuit and the Eastern District of Pennsylvania have affirmed that registration in Pennsylvania carries with it consent to be sued in Pennsylvania, noting that the Supreme Court’s ruling in Daimler (which establishes the “at home” test for general jurisdiction over corporations) does not eliminate consent to general personal jurisdiction over a corporation registered under the Pennsylvania statute. The Eastern District of Pennsylvania trial court expanded on this issue in Bors v. Johnson & Johnson stating that, “it cannot be genuinely disputed that consent, whether by registration or otherwise, remains a valid basis for personal jurisdiction following International Shoe and Daimler.” Bors v. Johnson & Johnson, No. CV 16-2866, E.D. Pa. (Sept. 20, 2016).

2017 has been an eventful year for personal jurisdiction, with the Supreme Court issuing rulings in BNSF, applying the Daimler “at home” general jurisdiction test to a FELA case, and Bristol-Myers Squibb, which pointedly addresses a corporations contact’s with the forum as it relates to specific jurisdiction over a corporation. However, Judge Lachman makes clear in her October 12th ruling that the United States Supreme Court in BNSF did not address whether a corporation’s consent to personal jurisdiction was sufficient to confer jurisdiction under the due process clause of the constitution because that issue was not considered by the Montana Supreme Court. She further noted that the Supreme Court did not mention consent to jurisdiction in its rulings in Daimler or Bristol-Myers Squibb. Consequently, Judge Lachman found that the prior cases holding that a defendant consents to personal jurisdiction by registering as a foreign corporation under the Pennsylvania Statute, or by appointing an agent for service of process, remain good law in Philadelphia County.

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