Articles Posted in Jurisdiction

Recently, suing a non-resident debtor in New York became somewhat more complicated. Two types of jurisdictional analysis are involved. First, there is an analysis that examines the general activity of a non-resident actor in the state. Does the non-resident actor have an office in the state and conduct regular business, and if so, how much and how often? This type of jurisdiction is often referred to as “presence” jurisdiction. The second kind of analysis focuses on specific activity of the non-resident actor in the state and whether the activity has a nexus to the claim against the non-resident actor. This second form of jurisdiction is commonly referred to as “long-arm” jurisdiction.

In January 2014, the United States Supreme Court in Daimler AG v. Bauman, 134 S. Ct. 746 (2014) (“Bauman”) essentially rewrote the familiar standard concerning general jurisdiction which provided that a non-resident actor is present in the state when it “does business” both “continuously and systematically.” Instead, the Court articulated the test as not “whether a foreign corporation’s in-forum contacts can be said to be in some sense ‘continuous and systematic,’ rather, it is whether that corporation’s ‘affiliations with the State’ are so ‘continuous and systematic’ as to render it essentially at home in the forum State.”

In attempt to deal with criticisms raised in a concurrence by Justice Sotomayor that the majority had unnecessarily made the burden too difficult for a plaintiff seeking redress against a non-resident defendant that conducted substantial business in the state, the majority in Bauman reasoned that “[T]he general jurisdiction inquiry does not ‘focus solely on the magnitude of the defendant’s in-state contacts’ [citation omitted]. General jurisdiction instead calls for an appraisal of a corporation’s activities in their entirety, nationwide and worldwide. A corporation that operates in many places can scarcely be deemed at home in all of them. Otherwise, ‘at home’ would be synonymous with ‘doing business’ tests framed before specific jurisdiction evolved in the United States.” Continue reading