Ninth Circuit Holds That 'Tag Jurisdiction' Does Not Apply To Corporations

Stosh Silivos is an Associate in our New York office.

The Court's Decision Limits Personal Jurisdiction Against Corporate Defendants

HIGHLIGHTS:

Consistent with Daimler, the Ninth Circuit holds that in-state service of process on a corporation's officer does not render the corporation "at home" in the state to create jurisdiction over the corporation. While a corporation's officers may "in some abstract sense be 'present' wherever its officers do business, such presence is not physical in the way contemplated" for tag jurisdiction. Following closely on the heels of the U.S. Supreme Court's landmark personal jurisdiction decision in Daimler AG v. Bauman,1 the U.S. Court of Appeals for the Ninth Circuit has issued a decision that further reinforces the limited circumstances in which general jurisdiction may be invoked against a corporate defendant. (See the Holland & Knight Aviation alert, " Daimler and Walden The Supreme Court's Continued Trend on Limiting Personal Jurisdiction," March 20, 2014.) In Martinez v. Aero Caribbean,2 the appellate court held that in-state service of process on a corporation's officer is not sufficient to create general personal jurisdiction over the corporation.

Plaintiffs Attempt to Serve Corporate Officer While in California

In Martinez, the French aircraft manufacturer Avions de Transport Régional (ATR) was sued in federal court in California by the heirs of a passenger on an airplane which crashed in Cuba, resulting in the deaths of everyone on board. The plaintiffs alleged that ATR's defective design and construction of the aircraft caused the crash.

The plaintiffs served copies of the summons and complaint on ATR's vice president of marketing while he was attending a conference in California on ATR's behalf.

No "Tag Jurisdiction" Over Corporations

In 1990, in Burnham v. Superior Court,3 the U.S. Supreme Court, through a plurality opinion and several concurrences, reaffirmed the historical rule that

personal service upon a physically present defendant suffice[s] to confer jurisdiction without regard to whether the defendant was only briefly in the State or whether the cause of action was related to his activities there.

This type of jurisdiction is often called "tag jurisdiction" or "transient jurisdiction."

The Martinez plaintiffs argued that, according to Burnham, the court had personal jurisdiction over ATR based on in-state service on ATR's vice president.

The Court of Appeals disagreed, holding that the...