New York, USA

Will the Supreme Court Further Restrict Jurisdiction of US Courts Over Foreign Entities?

By Howard L. Simon, Windels Marx Lane & Mittendorf LLP

At stake in a pair of cases pending before the Supreme Court is the reshaping of the constitutional due process standard for whether a US court can adjudicate a claim against a non-resident entity. It has long been the rule that depending on the nature of a defendant’s contacts with a forum, the court may exercise either general or specific personal jurisdiction over the defendant. Based on the Supreme Court’s 2014 Daimler decision, general jurisdiction – whereby a court may hear any and all claims against a defendant – is now limited, except in “exceptional” cases, to a corporation’s place of incorporation or its principal place of business.

In order for a court to exercise specific jurisdiction, due process requires that (i) the defendant has “minimum contacts” with the forum, (ii) the plaintiff’s claims “arise out of or relate to” those contacts, and (iii) jurisdiction would be “reasonable” under the circumstances. The basic tests for minimum contacts and reasonableness are well-established. Minimum contacts exist where a defendant’s activities indicate its “purposeful availment” of the privilege of doing business in the forum such that it could foresee being hauled into court there. Reasonableness is assessed based on a multifactor analysis, and is only rarely a bar to jurisdiction.

The cases before the Supreme Court concern the second requirement. The Ford Motor Company is seeking to have the Court rule that a defendant’s contacts only “arise out of or relate to” the plaintiff’s claim if the contacts are the proximate cause of the claim. Ford argues that this rule has the benefit of providing predictability as to where corporate defendants may face suit. Ford’s opponents argue that the Court should not further restrict jurisdiction in a way that benefits corporate entities at the expense of US citizens seeking relief against them. Which way the Court rules will have significant consequences both for US plaintiffs and foreign defendants.


Howard L. Simon

Howard L. Simon

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Windels Marx Lane & Mittendorf LLP
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Windels Marx Lane & Mittendorf LLP (Windels Marx) is a full-service law firm in New York (NY), USA, with offices also in New Jersey and Connecticut. They have nearly 150 lawyers across more than 20 practice areas, and have been a proud member of GGI since 2016. Visit them at windelsmarx.com and connect on Twitter @WindelsMarx and LinkedIn

Howard L. Simon is a Partner in the New York (NY) office of Windels Marx. He supervises the work of the Bankruptcy Litigation practice, in addition to leading the firm’s significant portfolio of work related to Bernard L. Madoff asset recovery matters. Since 2014, he has been recognised by SuperLawyers, New York Metro edition, in the Bankruptcy category. Connect with Howard at This email address is being protected from spambots. You need JavaScript enabled to view it. and learn more about his career experience at windelsmarx.com.
 


Published: Litigation & Dispute Resolution Newsletter, No. 14, Spring 2021 l Photo: MISHELLA - stock.adobe.com

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