Merely registering to do business in Delaware does not subject a non-Delaware company to the general jurisdiction of Delaware courts.
In Genuine Parts Company v. Cepec1, Delaware Supreme Court Chief Justice Leo E. Strine, Jr. writing for the majority reconciled Delaware law to the United States Supreme Court’s decision in Daimler AG v. Bauman.2 The Chief Justice framed the issue on appeal as “whether Delaware may exercise general jurisdiction over a foreign corporation for claims having nothing to do with Delaware, as a price for the corporation agreeing simply to be able to do business in Delaware.”3 The Court held that in today’s world of national and international trade, registering and doing business in Delaware cannot equate to consenting to “personal jurisdiction in any cause of action, however unrelated to the foreign corporation‘s activities in Delaware.”4
A foreign corporation still can be subject to specific jurisdiction in Delaware under Delaware’s long-arm statute, but not Delaware’s registration statutes. Delaware’s registration statutes, which make no explicit reference to personal jurisdiction, “must [only] be read as a requirement that a foreign corporation must appoint a registered agent to accept service of process.”5 Because registration under these statutes no longer can be deemed consent to personal jurisdiction under Genuine Parts, exercising personal jurisdiction over a registered foreign corporation must be consistent with due process under the Fourteenth Amendment.
Chief Justice Strine observed that in the wake of both Daimler and Goodyear Dunlop Tires Operations, S.A. v. Brown6, it is inconsistent with principles of due process to exercise general jurisdiction over a foreign corporation that is not essentially at home in a state for claims having no rational connection to the state.
While foreign corporations often take affirmative measures (be they successful or not) to have disputes litigated in the courts of Delaware, those that do not seek venue there can take comfort in the certainty that they will not be subjected to general jurisdiction in Delaware merely by virtue of their registering to do business there.
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For questions regarding this information, please contact one of the authors, a member of Polsinelli’s Financial and Fiduciary Litigation practice, or your Polsinelli attorney.