What follows is a collaborative effort between Bexis and Reed Smith‘s Kevin Hara, who helped research and write this post.  It’s not really a guest post, but Kevin had such a large hand in it that his contribution deserves to be separately acknowledged.

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As attorneys, we are fond of rules:  they give us structure, define boundaries sometimes both literally in a physical sense and figuratively in a nonphysical – but no less fundamental – way.   Nearly four years have elapsed since the Supreme Court crystallized the limitations on general personal jurisdiction in the landmark case Daimler AG v. Bauman, 134 S. Ct. 746 (2014) (“Bauman”), whose praises we have lauded, here, here, and here.  We followed Bauman, a case near and dear to the hearts of litigators on the right side of the “v.”, because it dealt a significant blow to the litigation tourism that has multiplied over recent years by confining general jurisdiction to the places in which a nonresident defendant is “at home.”  Nonetheless, plaintiffs’ attorneys have attempted to stretch that definition in a number of ways, including arguing for general jurisdiction based on judicial estoppel, waiver, and alter ego, as we explained here and here.

Those arguments are largely fact- and case-specific.  Another argument plaintiffs have asserted post-Bauman, however, is not, and is therefore of greater concern.  That is the issue of consent-based jurisdiction through a corporation’s registration to do business – which is mandatory in all 50 states.  Thus, general jurisdiction by “consent” based simply on registration to do business/appointment of an agent for service of process has the potential to be every bit as “grasping” and “exorbitant” as the general jurisdiction theories rejected in Bauman itself.  Because of this, under Bauman’s due process principles, such registration requirements should not subject nonresident defendants to all-purpose jurisdiction.  Thankfully, in most states, it does not.  As discussed in much greater detail below, we believe the following states gave rejected general jurisdiction by consent based on state registration statutes:

Alaska, Arizona, Arkansas, California, Colorado, Connecticut, Delaware, District of Columbia, Florida, Idaho, Illinois, Indiana, Louisiana, Maine, Maryland, Massachusetts, Michigan, Mississippi, Missouri, Montana, Nevada, New Hampshire, New Jersey, New Mexico, New York, North Carolina, North Dakota, Ohio, Oklahoma, Oregon, Rhode Island, South Carolina, South Dakota, Texas, Utah, Vermont, the Virgin Islands, Washington, West Virginia, and Wisconsin.

In a few jurisdictions, precedent exists that (at least so far) allows foreign corporations that have registered to do business to be haled into court even for claims unrelated to any in-state activity.  While this precedent was not directly addressed by Bauman, it contravenes the principles underlying Bauman, not to mention opening the door wide for forum shopping, improper litigation tourism, and other forms of gamesmanship that strain what we consider the bounds of fair play.

Sports, much like the practice of law, has its own rules designed to ensure fair play and impose important limits on the particular game at issue.  One prime example is discussed in “The Common Law Origins of the Infield Fly Rule,” 123 U. Pa. L. Rev. 1474 (1975).  For attorneys who lament some of the tactics that still stretch the bounds of legal rules and regulations and are baseball aficionados, consider the Official Rules of Major League Baseball (“MLB”) Rule 7.08 “Retiring a Runner,” and its inherent flexibility and vulnerability.  Our focus on the territorial limits to jurisdiction recognized and applied by Bauman’s holding and due process reminds us about a recent article that discussed a trick play in a high school championship game known as “The Play That Broke Baseball,” dubbed “Skunk in the Outfield.”  The play, like consent to jurisdiction through registration, exceeded the bounds of sportsmanship, but did not at the time technically break the rules.

As always, we start with the applicable rule, in this case Official MLB Rule 7.08, which proscribes the baseline for a runner. According to Rule 7.08, any runner is out when:

(a)(1) He runs more than three feet away from his base path to avoid being tagged unless his action is to avoid interference with a fielder fielding a batted ball.  A runner’s base path is established when the tag attempt occurs and is a straight line from the runner to the base he is attempting to reach safely; or

(2) after touching first base, he leaves the base path, obviously abandoning his effort to touch the next base.

MLB Rule 7.08.  The key portion of the rule is the second sentence of subsection (a)(1), which sets the base path, which is “established when the tag attempt occurs and is a straight line from the runner to the base he is attempting to reach safely.”   Thus, there is no base path if no player is attempting to tag the runner, who can go anywhere – even into the outfield – which is precisely what happened in Skunk In The Outfield (“Skunk”).  The above referenced article provides a fascinating depiction of the entire play, which took 2 minutes and 32 seconds, an eternity for a baseball play.  For instance, a very fast runner can traverse the 90 feet from home plate to first base in under 4 seconds, and circle the bases on a home run in fewer than in 14.  Even the longest plays, such as a rundown (when a runner becomes trapped between two bases) typically lasts less than 20 seconds.  Of course, the games themselves may take upwards of four hours, especially in the American League, which includes the unfortunate Designated Hitter rule.

But back to the play.  The team that unleashed Skunk did so in order to entice the defense into a rundown with base runners at the first and third, in order to steal a run, by allowing the runner on third to score during the confusion.  The problem with Skunk is that the rules allow it, and while Skunk would never happen in MLB, the exploitation of the rule in a state championship game denigrated the game, caused both teams to spend an extremely long, frustrating amount of time on the maneuver, raised the ire of players, officials and spectators, and ultimately, failed to work.  This begs the question whether, even if such a ploy is not against the rules, should it be prohibited by something else, such as fundamental fairness?

The same can be said about general jurisdiction by consent through registration, many large corporations conducting business throughout the country register in all 50 states.  A century-old Supreme Court case, Pennsylvania Fire Insurance Co. v. Gold Issue Mining & Milling Co., 243 U.S. 93 (1917), allowed general jurisdiction by consent under the old in rem-based jurisdictional standards that were overturned beginning with International Shoe Co. v. Washington, 326 U.S. 310, 316 (1945) (overruling Pennoyer v. Neff, 95 U.S. 714 (1878)).  Since large corporations have to be registered to do business in every state, allowing jurisdiction by consent under Pennsylvania Fire would result in their being subject to suit everywhere for anything – a jurisdictional skunk theory that would permit, under a different name, precisely what Bauman rejected.  As Bauman itself cautioned, cases “decided in the era dominated by Pennoyer’s territorial thinking . . . should not attract heavy reliance today.”  134 S. Ct. at 761 n.18.

As we discussed at length, the Second Circuit succinctly explained why the general jurisdiction by consent theory is a skunk in Brown v. Lockheed-Martin Corp., in holding that Bauman precluded a nonresident corporation’s business registration from ipso facto equating to general jurisdiction:

If mere registration and the accompanying appointment of an in state agent − without an express consent to general jurisdiction − nonetheless sufficed to confer general jurisdiction by implicit consent, every corporation would be subject to general jurisdiction in every state in which it registered, and [Bauman’s] ruling would be robbed of meaning by a back‐door thief.

814 F.3d 619, 640 (2d Cir. 2016) (applying Connecticut law) (emphasis added).  Brown crystallized one of the problems with both consent by registration and Skunk In The Outfield – each represents an attempt to gain an advantage on the other side by exploiting the system.  However, even the team that utilized Skunk became embarrassed over the play, as the crowd became derisive, the play ultimately accomplished nothing, and even the coach who called the play never used it again.  In other words, sometimes, the ability to take a particular action may not explicitly break the rules, but nonetheless should be prohibited.  That is the reason most states have declined to allow general jurisdiction are merely by a defendant’s registration to do business in a given forum.

Attorneys on the other side of the “v.,” however, haven’t been as easily embarrassedas baseball players.

Thus, a lot of law exists on the concept of jurisdiction by consent.  We have a cheat sheet collecting the favorable cases here.  Overall, the vast majority of states – 38 (plus DC and VI)  – have rejected the theory that a nonresident defendant may be subject to general jurisdiction simply by registering to conduct business through judicial decision or by statute, while in only 4 (Iowa, Minnesota, Nebraska, Pennsylvania) does current precedent continue to support that suspect argument, with the outcome being unclear in the other 8 (Alabama, Georgia, Hawaii, Kansas, Kentucky, New Hampshire, Tennessee, Virginia, and Wyoming).  Notably, the highest courts in California, Colorado, Delaware, Illinois, Maryland, Michigan, Missouri, New Mexico, Nevada, North Carolina, Ohio, Oregon, and Wisconsin have rejected such arguments, with seven of those occurring post-Bauman.

The overwhelming number of state and federal decisions issued after Bauman, which we have tracked here, shows an unmistakable trend against subjecting a nonresident defendant to a state’s general jurisdiction through registration for business.   In other words, although the Supreme Court has yet to issue the final verdict on this subject, things are moving in the right direction with more courts slamming the back door on the would be thief, and exterminating any potential “Skunk In The Outfield.”

Alabama

Neither Alabama’s corporate registration statutory framework, nor its cases, provide a clear answer on this issue.  See, e.g. Ala. Code § 10A-1-5.31.  However, a pre-Bauman district court opinion suggested that general jurisdiction based solely on consent through registration was sufficient.  Johnston v. Foster-Wheeler Constructors, Inc., 158 F.R.D. 496, 501 (M.D. Ala. 1994).  A post-Bauman case disagrees. Roper v. CNU of Alabama, 2017 WL 3334876, at *2 (N.D. Ala. Aug. 4, 2017) (being “registered to do business in Alabama . . . alone is insufficient for the court to exercise general jurisdiction”).  It’s hard to say how Alabama law comes down on this issue.

Alaska

Alaska’s registration statute provides no guidance on in this issue, and the cases are mostly unhelpful.  However, in Stephenson v. Duriron Co., 401 P.2d 423 (Alaska 1965), the court suggested that a prior version of the registration statute required a nonresident defendant to register to conduct business but did not “purport to define those activities which may subject a foreign corporation” to the jurisdiction of Alaska courts.  Id. at 424.  Thus, transacting business alone likely does not suffice for consent in Alaska.

Arizona

In Arizona, a post-Bauman appellate court decision held that registration to do business does not subject a foreign jurisdiction to general jurisdiction “either by prescription or consent,” because the defendant cannot “fairly . . . waive its due process rights when . . . the statute[]” provides no such notice.  Wal-Mart Stores, Inc. v. Lemaire, 395 P.3d 1116, 1119 (Ariz. App. 2017); but see Bohreer v. Erie Insurance Exchange, 165 P.3d 186, 187-92 (Ariz. App. 2007) (upholding general jurisdiction without minimum contacts and stating consent-by-registration satisfies due the process; “agree[ing]” with now overruled (see Delaware) Sternberg decision).  Lemaire declined to overrule Bohreer, but the former post-dates Bauman, it is the more current and more likely approach that Arizona’s Supreme Court would follow.

Arkansas

The Arkansas Code explicitly provides that “[t]he appointment or maintenance in this state of a registered agent does not by itself create the basis for personal jurisdiction over the represented entity in this state.”  Ark. Code Ann. § 4-20-115. See also Pearrow v. National Life & Accident Insurance Co., 703 F.2d 1067, 1069 (8th Cir. 1983) (appointment of an agent for service of process does not create general personal jurisdiction) (applying Arkansas law); Antoon v. Securus Technologies, Inc., 2017 WL 2124466, at *3 (W.D. Ark. May 15, 2017) (“express” statutory limitation precludes general jurisdiction by consent, because “an exception that is so large as to swallow the rule here would [not] be a natural or fair reading of these statutes”); but see Basham v. American National County Mutual Insurance Co., 2015 WL 1034186, at *4 (W.D. Ark. March 10, 2015) (allowing general jurisdiction by consent under Knowlton (see Minnesota).  Arkansas seems solid against general jurisdiction by consent.

California

In California, consent to jurisdiction through registration to do business equates to consent to service of process only, but has no consequence for personal jurisdiction. See, e.g. Bristol-Myers Squibb Co. v. Superior Court, 377 P.3d 874, 884 (Cal. 2016) (“a corporation’s appointment of an agent for service of process, when required by state law, cannot compel its surrender to general jurisdiction for disputes unrelated to its California transactions”), overruled on other grounds, ___ U.S. ___, 137 S. Ct. 1773 (2017).  See also DVI, Inc. v. Superior Court, 128 Cal. Rptr.2d 683, 694 (Cal. App. 2002) (“designation of an agent for service of process and qualification to do business in California alone are insufficient to permit general jurisdiction”) (pre-Bauman); Gray Line Tours v. Reynolds Electric. & Engineering Co., 238 Cal. Rptr. 419, 421 (Cal. App. 1987) (same); Am Trust v. UBS AG, 681 Fed.Appx. 587, 589 (9th Cir. 2017) (affirming dismissal, consent to jurisdiction not required of corporations registering to do business); L.A. Gem & Jewelry Design, Inc. v. Ecommerce Innovations, LLC, 2017 WL 1535084, at *5 (C.D. Cal. April 27, 2017) (“Designation of an agent for service of process in California, alone, is not enough to show general jurisdiction.”); Lindora, LLC v. Isagenix International, LLC, 198 F. Supp.3d 1127, 1136-37 (S.D. Cal. 2016) (no general personal jurisdiction despite defendant registered to do business in California); American Insurance Co. v. R&Q Reinsurance Co., 2016 WL 5930589, at *2 (N.D. Cal. Oct. 12, 2016) (same); Angelini Metal Works Co. v. Hubbard Iron Doors, Inc., 2016 WL 6304476, at *3 (C.D. Cal. Jan. 5, 2016) (same); Freeney v. Bank of America Corp., 2015 WL 12535021, at *41 (C.D. Cal. Nov. 19, 2015) (rejecting general jurisdiction based on registration or appointment of agent for service of process); Henderson v. United Student Aid Funds, Inc., 2015 WL 12658485, at *4 (S.D. Cal. April 8, 2015) (no general personal jurisdiction despite defendant registered to do business in California); Overhill Farms Inc. v. West Liberty Foods LLC, 2014 WL 4180920, at *4 (C.D. Cal. Aug. 21, 2014) (“while it is relevant that Defendant may be registered to do business and has designated an agent for service of process in California, these acts alone are insufficient to support a finding of general jurisdiction”).

Colorado

After Bauman, the Colorado Supreme Court held that, although a defendant foreign corporation “ha[d] a registered agent in Colorado,” nonetheless “the record in this case does not support a finding that general jurisdiction over [defendant] is appropriate.”  Magill v. Ford Motor Co., 379 P.3d 1033, 1038-39 (Colo. 2016).  See also Allied Carriers Exchange, Inc. v. Alliance Shippers, 1999 WL 35363796, at *5 (D. Colo. Sept. 22, 1999) (“appointment of a registered agent . . . alone cannot reasonably be characterized as purposeful, continuous, and systematic” so as to create general jurisdiction). Magill thus nullifies the unfavorable pre-Bauman dictum in Packaging Store, Inc. v. Leung, 917 P.2d 361, 363 (Colo. App. 1996).

Connecticut

The Second Circuit Court of Appeals in Brown v. Lockheed-Martin Corp., rejecting the consent through registration argument in an asbestos case, interpreting the Connecticut statute not to permit such jurisdiction in order to avoid declaring the statute unconstitutional.  814 F.3d 619, 636-37 (2d Cir. 2016), affirming Brown v. CBS Corp., 19 F. Supp.3d 390, 397 (D. Conn. May 14, 2014).  Pre-Bauman state court cases had ruled otherwise, see Talenti v. Morgan & Brother Manhattan Storage Co., 968 A.2d 933, 941 (Conn. App. 2009); Lake Road Trust, LTD. v. ABB, Inc., 2011 WL 1734458, at *6 (Conn. Super. April 11, 2011), but in light of Brown, it would be unusual for Connecticut state courts to follow a contrary path.

Delaware

The Delaware Supreme Court was one first post-Bauman state high courts to foreclose any argument that a nonresident Corporation could be subjected to general jurisdiction merely by registering to do business.  Genuine Parts Co. v. Cepec, 137 A.3d 123 (Del. 2016).  Cepec held that Delaware’s registration statute “as requiring a foreign corporation to allow service of process to be made upon it in a convenient way in proper cases, but not as a consent to general jurisdiction,” in accordance with Bauman and “common sense.”  Id. at 142-43.  Prior, contrary precedent was overruled.  Id. at 141-42 (rejecting Sternberg v. O’Neil, 550 A.2d 1105, 1108-12 (Del. 1988), and Continental Casualty Co. v. American Home Assurance Co., 61 F. Supp.2d 128, 12930 (D. Del. 1999)). See AstraZeneca AB v. Mylan Pharmaceuticals, Inc., 72 F. Supp. 3d 549, 556 (D. Del. 2014) (“compliance with Delaware’s registration statutes . . . cannot constitute consent to jurisdiction”), aff’d on other grounds, 817 F.3d 755 (Fed. Cir. 2016).

District of Columbia

The current District of Columbia statute provides that “[t]he designation or maintenance in the District of a registered agent shall not by itself create the basis for personal jurisdiction.”   D.C. Code §29-104.02 (2013).  See Freedman v. Suntrust Banks, Inc., 139 F. Supp.3d 271, 279-80 (D.D.C. 2015) (general jurisdiction based on registration and agent for service of process “explicitly foreclose[d]” by Bauman because it would subject defendant to jurisdiction in multiple fora; prior precedent no longer valid); Kuennen v. Stryker Corp., 2013 WL 5873277, at *4 (W.D. Va. Oct. 30, 2013) (a defendant’s “business certificate and appointed agent . . . are not independent support for general jurisdiction − the principles of due process require a firmer foundation than mere compliance with state domestication statutes”) (applying District of Columbia law).  Under a prior statute, In re FTC Corp. Patterns Report Litigation, 432 F. Supp. 274, 286 (D.D.C. 1977), allowed mere service on a registered agent to invoke general jurisdiction, although modern terminology was not used.  Under the current D.C. statute, that doesn’t happen.

Florida

In Magwitch, LLC v. Pusser’s West Indies Ltd., 200 So. 3d 216 (Fla. App. 2016), the court was “not persuaded” that registration to business was a basis for general personal jurisdiction, holding that “Pennsylvania Fire has yielded to the two-prong analysis for long-arm jurisdiction set forth in recent decades by the Supreme Court.”  Id. at 218.  Accord Rizack v. Signature Bank, N.A., 2017 WL 5197917, at *3-4 (Fla. Cir. March 20, 2017) (following Sofrar).  Likewise, federal courts both pre- and post-Bauman have repeatedly declined to rule that registration and appointment of an agent for service is a valid basis for general jurisdiction over a nonresident defendant.  See, e.g., Consolidated Development Corp. v. Sherritt, Inc., 216 F.3d 1286, 1293 (11th Cir. 2000) (“Courts of appeals that have addressed this issue have rejected the argument that appointing a registered agent is sufficient to establish general personal  jurisdiction over a corporation”); Hinkle v. Continental Motors, Inc., 2017 WL 3333120, at *10 (M.D. Fla. July 21, 2017) (being “registered to do business here . . . alone is insufficient to confer jurisdiction”); PHD@Western, LLC v. Rudolf Construction Partners, LLC, 2016 WL 5661637, at *4 (S.D. Fla. Sept. 30, 2016) (rejecting registration as basis for general jurisdiction); Erwin v. Ford Motor Co., 2016 WL 7655398, at *12 (M.D. Fla. Aug. 31, 2016) (consent through registration does not warrant “exercise of jurisdiction [because it fails to] . . . satisfy the Due Process Clause”); Evans v. Andy & Evan Industries, Inc., 2016 WL 8787062, at *3 (S.D. Fla. July 15, 2016) (registration to do business, even with other contacts, insufficient to support general jurisdiction); Royal Acquisitions 001, LLC v. Ansur America Insurance Co., 2015 WL 1437689, at *4 (S.D. Fla. March 27, 2015) (registration to do business and appointment of a registered agent “are not so continuous and systematic as to render Defendant essentially at home”); Recao v. Bell Helicopter Textron, Inc., 2014 WL 12595302, at *4 (S.D. Fla. Sept. 23, 2014) (rejecting both registration and agent for service as basis for general jurisdiction); Mio, LLC v. Valentino’s, Inc., 2013 WL 3364392, at *6 (M.D. Fla. July 3, 2013) (an “agent to accept service of process . . ., standing alone, does not meet the general jurisdiction requirement”); In re Farmland Industries, Inc., 2007 WL 7694308, at *12 (M.D. Fla. March 30, 2007) (“agree[ing] with those cases holding that registering to do business and appointing a registered agent in the state of Florida, without more, does not subject a foreign corporation to the general personal jurisdiction of the state for any and all unrelated actions”); Sofrar, S.A. v. Graham Engineering Corp., 35 F. Supp.2d 919, 919 (S.D. Fla. 1999) (“personal jurisdiction over a corporate defendant cannot be found on the basis of a defendant’s registration to do business in the state and designation of a corporate agent alone”).  Florida looks solid.

Georgia

Georgia’s registration statute provides no indication that registration affects jurisdiction one way or another; nor are there relevant state cases.  However, pre-Bauman federal district courts in Georgia were inconsistent.  Moore v. McKibbon Brothers, 41 F. Supp.2d 1350, 1354 (N.D. Ga. 1998), considered registration as one factor of a minimum contact analysis, rather than as consent to jurisdiction in and of itself.  Contrarily, Wheeling Corrugating Co. v. Universal Const. Co., 571 F. Supp. 487, 488 (N.D. Ga. 1983), upheld general jurisdiction based on registration to do business as consent, relying on pre-International Shoe precedents, and based largely on defendant’s failure to support its opposition to jurisdiction with any evidence.  Id. We can’t give you a good handle on Georgia.

Hawaii

Hawaii is another state that has not adopted a position on the issue of consent to jurisdiction through registration to do business, either by statute or case law.  Hawaii’s registration statute, Haw. Rev. Stat. § 414-437, is silent as to jurisdiction.  Another state that appears up for grabs.

Idaho

Idaho’s statute provides that appointment of a registered agent has no effect on jurisdiction or venue.  Idaho Code § 30-21-414 (2015).  A federal district court similarly ruled that the presence of a registered agent alone is insufficient for general jurisdiction over a nonresident corporation.  Strickland v. Bae Systems Tactical Vehicle Systems, LP, 2013 WL 2554671 (D. Idaho June 10, 2013) (“the fact that both corporations have registered agents in Idaho, standing alone, is not enough to establish general jurisdiction over the corporations”).  We should be all right in Idaho.

Illinois

In another post-Bauman decision, the Illinois Supreme Court held that Illinois’s statute did not “require foreign corporations to consent to general jurisdiction as a condition of doing business …, nor [did] they indicate that, by registering … or appointing a registered agent, a corporation waives any due process limitations.”  American Insurance Co. v. Interstate Warehousing, Inc., ___ N.E.3d ___, 2017 WL 4173349, at *5 (Ill. Sept. 21, 2017).  See Alderson v. Southern Co., 747 N.E.2d 926, 944 (Ill. App. 2001) (“designation of an Illinois registered agent is not an independently determinative factor” in jurisdictional analysis).

Illinois federal courts, particularly since Bauman, have held that consent by registration is not a proper exercise of general jurisdiction.  See Congdon v. Cheapcaribbean.com, Inc., 2017 WL 5069960, at *8 (N.D. Ill. Nov. 3, 2017) (“it has long been held that registering to do business in a state, ‘standing alone,’ cannot satisfy due process required to assert personal jurisdiction”); Guaranteed Rate, Inc. v. Conn, ___ F. Supp.3d ___, 2017 WL 3704845, at *4 (N.D. Ill. Aug. 28, 2017) (registration to do business insufficient to support general jurisdiction); MG Design Assocs. Corp. v. CoStar Realty Information, Inc., ___ F. Supp.3d ___, 2017 WL 3070848, at *7 (N.D. Ill. July 19, 2017) (“registering to do business is not enough to confer general jurisdiction over a foreign corporation”); Muenstermann v. United States, 2017 WL 1408037, at *2 (S.D. Ill. April 20, 2017) (corporate registration/agent for service of process “do not constitute the type of continuance and systematic affiliations” required to support general jurisdiction; pre-Bauman contrary precedent is no longer applicable); Perez v. Air & Liquid Systems Corp., 2016 WL 7049153, at *6-9 (S.D. Ill. Dec. 2, 2016) (“registering to do business or maintaining a registered agent is not enough to confer general jurisdiction over a foreign corporation”); Johnson v. Barrier, 2016 WL 3520157 (N.D. Ill. June 28, 2016) (dismissing action; defendant’s consent to jurisdiction in previous cases not judicial estoppel); Leibovitch v. Islamic Republic of Iran, 188 F. Supp.3d 734, 749 (N.D. Ill. 2016) (“under Illinois law, the appointment of a registered agent is not determinative in the personal jurisdiction analysis”), aff’d, 852 F.3d 687 (7th Cir. 2017); Dimitrov v. Nissan North America, Inc., 2015 WL 9304490, at *4-5 (N.D. Ill. Dec. 22, 2015) (applying “lessons of Daimler”; no general jurisdiction over foreign corporation simply because it was registered to do business in Illinois); Surita v. AM General LLC, 2015 WL 12826471, at *3 (N.D. Ill. Nov. 4, 2015) (plaintiff’s “desire for this Court to exercise ‘all-purpose jurisdiction’ over [defendant] based on the presence of its registered agent in Illinois and [its] registration to do business in Illinois is unavailing, especially in light of” Bauman); Rozumek v. Union Carbide Corp., 2015 WL 12831301, at *2 (S.D. Ill. July 1, 2015) (registration to do business does not create general jurisdiction under Bauman); Rozumek v. General Electric Co., 2015 WL 12829795, at *2 (S.D. Ill. July 1, 2015) (same); Shrum v. Big Lots Stores, Inc., 2014 WL 6888446, at *2, *7 (C.D. Ill. Dec. 8, 2014) (“maintenance of an agent for the service of process does not rise to the level of ‘continuous and systematic’ contacts”); Sullivan v. Sony Music Entertainment, 2014 WL 5473142, at *3 (N.D. Ill. Oct. 29, 2014) (similar).  Before Bauman, see: Rawlins v. Select Specialty Hospital, 2014 WL 1647182, at *5 (N.D. Ill. April 23, 2014); ACUITY v. Roadtec, Inc., 2013 WL 6632631, at *5 (N.D. Ill. Dec. 16, 2013); Bray v. Fresenius Medical Care Aktiengesellschaft Inc., 2007 WL 7366260, at *4 (N.D. Ill. Aug. 30, 2007).

Indiana

Indiana courts, even prior to Bauman, rejected general jurisdiction based only on a foreign corporation’s consent by registering to do business.  Wilson v. Humphreys (Cayman) Ltd., 916 F.2d 1239, 1245 (7th Cir. 1990) (discussing consent-by-registration and holding that “ordinarily, registration, standing alone, will not satisfy due process”) (applying Indiana law); United States Bank National Ass’n v. Bank of America, N.A., 2016 WL 5118298, at *7-8 & n.4 (S.D.N.Y. Sept. 20, 2016) (defendant “had not waived its right to object to the exercise of personal jurisdiction by registering to do business in Indiana and designating an agent for service of process in Indiana”) (applying Indiana law); Garcia v. LQ Properties, Inc., 2016 WL 3384644, at *3 (N.D. Ind. June 20, 2016) (registration to do business, even with other contacts, insufficient to support general jurisdiction); United States Bank National Ass’n v. Bank of America, N.A., 2015 WL 5971126, at *6 (S.D. Ind. Oct. 14, 2015) (“Merely registering to do business in Indiana, though a necessary precursor to engaging in business activities in the state, does not establish personal jurisdiction over a corporation.”); McManaway v. KBR, Inc., 695 F. Supp.2d 883, 895 (S.D. Ind. 2010) (following Wilson; pre-Bauman).  Indiana looks safe.

Iowa

A post-Bauman Iowa federal district court allowed general jurisdiction via consent.  Spanier v. American Pop Corn Co., 2016 WL 1465400 (N.D. Iowa April 14, 2016).  The court considered itself bound by the adverse, pre-Bauman Knowlton decision (see Minnesota).  2016 WL 1465400, at *4 (consent by registration was a valid “means of exercising general jurisdiction” under Knowlton, which held “that consent by registration is a sufficient condition for the exercise of personal jurisdiction, which does not require a due process analysis”).  See also Daughetee v. CHR Hansen, Inc., 2011 WL 1113868, at *7 (N.D. Iowa March 25, 2011) (following Knowlton).  Right now, Iowa is on the pro-consent side.

Kansas

Kansas is seriously murky.  In a pre-Bauman decision the Supreme Court of Kansas held that registration is sufficient to establish general jurisdiction by consent.  Merriman v. Crompton Corp., 146 P.3d 162, 171, 177 (Kan. 2006).  Merriman found the Delaware decision in Sternberg “persuasive,” id. at 176, but in light of Bauman, the Delaware Supreme Court has overruled Sternberg (see Delaware).  See also AK Steel Corp. v. PAC Operating Ltd. Partnership, 2017 WL 3314294, at *4 (D. Kan. Aug. 3, 2017) (Kansas will continue to follow Pennsylvania Fire unless expressly overruled); Snyder Insurance Services. v. Sohn, 2016 WL 6996265, at *3 (D. Kan. Nov. 30, 2016) (defendant “consented to general personal jurisdiction by its registration to do business in Kansas”).  However, a recent Kansas intermediate appellate court ruled that registration alone is insufficient for general jurisdiction.  Kearns v. New York Community Bank, 400 P.3d 182 (table), 2017 WL 1148418, at *6 (Kan. App. March 24, 2017).  Further, an expansive view of general jurisdiction by consent was held to violate the dormant Commerce Clause in In re Syngenta AG MIR 162 Corn Litigation, 2016 WL 2866166, at *5-6 (D. Kan. May 17, 2016).

Kentucky

The issue of consent-based jurisdiction through registration to do business or designation of an agent is uncertain in Kentucky, because the statute provides no guidance, and no relevant cases have addressed this topic.  Ky. Rev. Stat. Ann. §§14A.4-010 (2012).  This absence of precedent may arise from the Kentucky Supreme Court’s limitation the Commonwealth’s Long-Arm statute (which does not extend to maximum constitutional due process limits) so that “even when the defendant’s conduct and activities fall within one of the enumerated [Kentucky-related] categories, the plaintiff’s claim still must ‘arise’ from that conduct or activity,” Caesars Riverboat Casino, LLC v. Beach, 336 S.W.3d 51, 56 (Ky. 2011), which therefore would seem to permit only specific jurisdiction.  We’re leaving Kentucky in the uncertain category, though.

Louisiana

Louisiana state and federal courts, both before and after Bauman, have rejected general jurisdiction on a consent by registration basis.  See, e.g., Firefighters’ Retirement System v. Royal Bank of Scotland PLC, 2017 WL 3381227, at *4 n.41(M.D. La. Aug. 4, 2017) (“being registered as a foreign corporation with the Louisiana Secretary of State’s office is not enough to establish general personal jurisdiction”); Nationwide Signs, LLC v. National Signs, LLC, 2017 WL 2911577, at *3 (E.D. La. July 7, 2017) (“the presence of a registered agent and registered business office is insufficient to support the exercise of general jurisdiction”); Mercury Rents, Inc. v. Crenshaw Enterprises Ltd., 2017 WL 2382483, at *1-2 (W.D. La. May 30, 2017) (“registering to do business in a forum State does not establish general jurisdiction”); Gulf Coast Bank v. Designed Conveyor Systems, LLC, 2017 WL 120645, at *7 (M.D. La. Jan. 12, 2017) (no consent to jurisdiction through registration, and because interpreting a registration statute as providing consent to general jurisdiction would “rob [Bauman] of its central meaning”); J.A.H. Enterprises, Inc. v. BLH Equipment, LLC, 2016 WL 7015688, at *4 (Mag. M.D. La. Oct. 24, 2016) (“Maintaining a license in a state does not necessarily mean that the state has general jurisdiction over the licensed individual.”), adopted, 2016 WL 7031288 (M.D. La. Nov. 30, 2016); Gulf Coast Bank & Trust Co. v. Designed Conveyor Systems, LLC, 2016 WL 4939113, at *3 (M.D. La. Sept. 14, 2016) (“that an entity is registered to do business in a forum State and maintains an agent for service of process in a forum State is insufficient to establish general jurisdiction”); Sciortino v. CMG Capital Management Group., Inc., 2016 WL 4799099, at *3 (E.D. La. Sept. 14, 2016) (state registration to sell securities does not support general jurisdiction); Firefighters’ Retirement System v. Royal Bank of Scotland, PLC, 2016 WL 1254366, at *5 (M.D. La. March 29, 2016) (“Fifth Circuit precedent has consistently held that being qualified to do business in a state and the appointment of a registered agent for service alone cannot support the exercise of general jurisdiction. Such precedent is further strengthened post-Daimler.”); Long v. Patton Hospitality Management, LLC, 2016 WL 760780, at *4-6 (E.D. La. Feb. 26, 2016) (contacts including registering to do business and maintaining a registered agent for service insufficient to establish general personal jurisdiction); Louisiana Limestone & Logistics, LLC v. Granite Group, 2014 WL 1217956, at *5 (W.D. La. Feb. 28, 2014) (“[Plaintiff] contends that this Court may exercise general jurisdiction over [defendant] because [defendant] registered with the Louisiana Secretary of State. . . .  However, [plaintiff’s] position is not consistent with Fifth Circuit precedent holding that the presence of the registered agent and registered business office alone is insufficient to support the exercise of general jurisdiction.”); Crochet v. Wal-Mart Stores, Inc., 2012 WL 489204, at *4 (W.D. La. Feb. 13, 2012) (no jurisdiction where a defendant’s “only contacts with Louisiana are its registration with the Louisiana Secretary of State to do business and its appointment of an agent for service of process”); DNH, LLC v. In-N-Out Burgers, 381 F .Supp.2d 559, 565 (E.D. La. 2005) (“Qualifying to do business in a state and appointing an agent for service of process there do not . . . sustain an assertion of general jurisdiction”); Lyons v. Swift Transportation Co., 2001 WL 1153001, at *6-7 (E.D. La. Sept. 26, 2001) (“regardless of the existence of an agent for service of process, the exercise of personal jurisdiction over a non-resident defendant must nevertheless comport with the principles of due process”).  See also Taylor v. Arellano, 928 So.2d 55, 58-60 (La. App. 2005) (nonresident corporation was not subject to general jurisdiction based on designation of agent for service, because there were not sufficient contact to satisfy due process, and narrowly construing Phillips Petroleum Co. v. OKC Ltd. Partnership, 634 So.2d 1186, 1187 (La. 1994), which contained dicta that could be read as supportive of general jurisdiction through consent).

Maine

Maine’s registration statute provides that “[t]he appointment or maintenance in this State of a clerk or registered agent does not by itself create the basis for personal jurisdiction” in Maine courts.  Me. Rev. Stat. Ann. tit. 5, § 115 (2013).  In Sandstrom v. ChemLawn Corp., 904 F.2d 83 (1st Cir. 1990) (applying Maine law), merely being licensed to do business in Maine and having a agent for service of process was neither “actually doing business” nor “continuous and substantial” business activity that would allow general personal jurisdiction.  Id. at 89.  Down East looks solid.

Maryland

The statutory framework eliminates consent through registration as a basis for general jurisdiction.  See Md. Code Ann., Corps. & Ass’ns §7-101 (“[w]ith respect to any cause of action on which a foreign corporation would not otherwise be subject to suit in this State, compliance with [the registration statute] …” neither renders a foreign corporation “subject to suit” nor is considered “consent by it to be sued” in Maryland.) (2014).  Maryland courts similarly reject general jurisdiction simply as a matter of registration to do business or appointment of an agent.  See, e.g., Republic Properties Corp. v. Mission West Properties, LP, 895 A.2d 1006, 1022 (Md. 2006) (“service of process within Maryland upon the resident agent of a domestic corporate general partner of a foreign limited partnership does not confer, by itself, personal jurisdiction over the foreign limited partnership,” calling into question the viability of Pennsylvania Fire); Goodyear Tire & Rubber Co. v. Ruby, 540 A.2d 482, 487 (Md. 1988) (presence of the agent for service “would not alone be sufficient to subject [defendant] to suit here”); Advanced Datacomm Testing Corp. v. PDIO, Inc., 2009 WL 2477559, at *8 (D. Md. Aug. 11, 2009) (due process precludes basing general jurisdiction on nothing more than registration/agent for service of process); Tyler v. Gaines Motor Lines, Inc., 245 F. Supp.2d 730, 732 (D. Md. 2003) (“reject[ing] the notion that appointing a registered agent is sufficient to establish general personal jurisdiction over a corporation”).  Maryland looks good.

Massachusetts

The Massachusetts registration statute is silent on the issue of consent to jurisdiction over registration for appointment of an agent.  Federal precedent recognizes that where a “defendant has registered as a foreign corporation to do business in Massachusetts and has named a registered agent for service of process . . . such activities, standing alone, are not enough to confer general personal jurisdiction.” Fiske v. Sandvik Mining & Construction USA, LLC, 540 F. Supp.2d 250, 256 (D. Mass. 2008) (following Sandstrom (see Maine).  They do, however, “add some modest weight to the jurisdictional analysis. Id. accord Grice v. VIM Holdings Group, LLC, 2017 WL 6210891, at *4, 10 (D. Mass. Dec. 8, 2017) (no general jurisdiction; finding registration relevant to specific jurisdiction post-Bauman); Cossart v. United Excel Corp., 2014 WL 4927041, at *2 (D. Mass. Sept. 30, 2014) (“Registration . . . cannot satisfy general jurisdiction’s requirement of systematic and continuous activity.”), rev’d on other grounds, 804 F.3d 13 (1st Cir. 2015) (specific jurisdiction).  However, a Massachusetts state trial decision, citing Pennsylvania Fire, and similar cases, includes extensive dicta suggesting that consent by registration was a valid exercise of general jurisdiction.  Galvin v. Jaffe, 2009 WL 884605, at *6-11 (Mass. Super. Jan. 26, 2009) (defendant was individual corporate officer consent-by-registration of corporate entities as a basis for general jurisdiction also discussed).  Despite that discordant note, Massachusetts seems favorable.

Michigan

The Michigan Supreme Court held decades ago that “admission of defendant to carry on business in this State . . . gave to it the status of a domestic corporation . . ., but did not extend its liability to be sued” on any and all claims.  Renfroe v. Nichols Wire & Aluminum Co., 83 N.W.2d 590, 594 (Mich. 1957).  Michigan federal courts have followed.  Asphalt v. Bagela Baumaschinen GmbH & Co. KG, 2017 WL 1177455, at *4 & n.1 (E.D. Mich. March 30, 2017) (“numerous courts have determined that parties do not consent to general jurisdiction by registering to do business in the state of Michigan, without more”); Magna Powertrain De Mexico S.A. De C.V. v. Momentive Performance Materials USA LLC, 192 F. Supp.3d 824, 830 (E.D. Mich. June 16, 2016) (“Michigan courts have rejected the idea that the registration statutes allow an inference of consent to general personal jurisdiction”).  Michigan is solid.

Minnesota

Minnesota is one of the few states in which appointment of an agent has been enough to constitute consent to general jurisdiction.  The appellate cases so holding are pre-Bauman, and have not been reconsidered since.  See Rykoff-Sexton, Inc. v. American Appraisal Assoc., Inc., 469 N.W.2d 88, 90 (Minn. 1991) (“[o]nce the defendant has appointed an agent for service of process . . . personal jurisdiction pursuant to the consent of the defendant does not invoke constitutional or long arm statutory analysis”); Knowlton v. Allied Van Lines, Inc., 900 F.2d 1196, 1200 (8th Cir. 1990) (“appointment of an agent for service of process . . . gives consent to the jurisdiction of Minnesota courts for any cause of action, whether or not arising out of activities within the state”) (applying Minnesota law).  Neither case conducted a due process analysis.  Ally Bank v. Lenox Financial Mortgage Corp., 2017 WL 830391 (D. Minn. March 2, 2017), upheld consent through a registration as valid form of general jurisdiction, following Knowlton, and distinguishing Bauman as “address[ing] the limits of general jurisdiction over a foreign corporation, not the limits of a defendant’s capacity to consent to personal jurisdiction.”  Id. at *3.  For other Minnesota post-Bauman applications of jurisdiction by consent under Knowlton see: Ritchie Capital Management, Ltd. v. Costco Wholesale Corp., 2017 WL 4990520, at *2 (D. Minn. Oct. 30, 2017); Edmondson v. BNSF Railway Co., 2015 WL 10528453, at *3-4 (Minn. Dist. May 12, 2015).  Cf. McGill v. Conwed Corp., 2017 WL 4534827, at *8 (D. Minn. Oct. 10, 2017) (no general jurisdiction where corporate registration was revoked).  Minnesota is solid the other way.

Mississippi

Mississippi’s registration statute specifically excludes consent by registration, stating that “[t]he appointment or maintenance in this state of a registered agent does not by itself create the basis for personal jurisdiction over the represented entity in this state.”  Miss. Code Ann. §79-35-15 (2013).  Accord Mullen v. Bell Helicopter Textron, Inc., 136 F. Supp.3d 740, 744 (S.D. Miss. 2015) (“Alone, [defendant’s] business registration in Mississippi does not establish that it is ‘at home’ in Mississippi.”); Pitts v. Ford Motor Co., 127 F. Supp.3d 676, 683 (S.D. Miss. 2015); Handshoe v. Yount, 2015 WL 7572344, at *4 (S.D. Miss. Nov. 24, 2015); Robinson v. Knight Protective Service, Inc., 2014 WL 1326096, at *4 (S.D. Miss. March 31, 2014); Continental First Federal, Inc. v. Watson Quality Ford, Inc., 2009 WL 2032401, at *8-9 (M.D. Tenn. July 9, 2009) (applying Mississippi law); Norfolk Southern Railway Co. v. Burlington Northern, 2005 WL 1363210, at *2-3 (S.D. Miss. June 2, 2005).  Mississippi looks alright on this issue.

Missouri

Following Bauman, the Missouri Supreme Court held that a nonresident corporation does not consent to simply by registering to do business.   State ex rel. Norfolk Southern Railway Co. v. Dolan, 512 S.W.3d 41, 51-53 (Mo. 2017) (“Dolan”).  “[A] broad inference of consent based on registration would allow national corporations to be sued in every state, rendering [Bauman] pointless.”  Id. at 51.  Numerous post-Bauman state and federal courts have also reached the same result.  See Madlock v. Westar Energy, Inc., 517 S.W.3d 678, 679 (Mo. App. 2017) (following Dolan); Siegfried v. Boehringer Ingelheim Pharmaceuticals, Inc., 2017 WL 2778107, at *5 (E.D. Mo. June 27, 2017) (“[c]ompliance with Missouri’s registration statute does not confer personal jurisdiction”); Everett v. Aurora Pump Co., 2017 WL 2778091, at *1 (E.D. Mo. June 27, 2017) (following Dolan; “registration no longer provides a basis for a court to exercise personal jurisdiction over a defendant”); Matthews v. BNSF Railway Co., 2017 WL 2266891, at *2 (W.D. Mo. May 23, 2017) (following Dolan; reconsidering prior decision); Alvarracin v. Volume Services, Inc., 2017 WL 1842701, at *2 (W.D. Mo. May 4, 2017) (“agree[ing] with the findings of those courts who have determined that Knowlton’s [see Minnesota] holding cannot survive in light of” Bauman); MacCormack v. The Adel Wiggins Group, 2017 WL 1426009, at *3-4 (E.D. Mo. April 21, 2017) (similar; overruling prior decisions in same litigation); Addelson v. Sanofi S.A., 2016 WL 6216124, at *4 (E.D. Mo. Oct. 25, 2016) (“personal jurisdiction is not established by appointment of an agent for service of process”; Knowlton not good law post-Bauman); In Re: Zofran (Ondansetron) Products Liability Litigation, 2016 WL 2349105, at *4 (D. Mass. May 4, 2016) (general jurisdiction by consent “would distort the language and purpose of the Missouri registration statute and would be inconsistent with” Bauman) (applying Missouri law); Beard v. Smithkline Beecham Corp., 2016 WL 1746113, at *2 (E.D. Mo. May 3, 2016) (rejecting registration to do business as general jurisdiction by consent; prior precedent no longer valid after Bauman); Keeley v. Pfizer, Inc., 2015 WL 3999488, at *4 (E.D. Mo. July 1, 2015) (“A defendant’s consent to jurisdiction must satisfy the standards of due process and finding a defendant consents to jurisdiction by registering to do business in a state or maintaining a registered agent does not”); Neeley v. Wyeth LLC, No., 2015 WL 1456984, at *3 (E.D. Mo. March 30, 2015) (Bauman “clearly rejects” general jurisdiction based on corporate registration); Smith v. Union Carbide Corp., 2015 WL 191118, at *3 (Mo. Cir. St. Louis City Jan. 12, 2015) (having registered agent “does not automatically establish general personal jurisdiction”).

Some post-Bauman Missouri federal courts disagreed, claiming to be bound by Knowlton (see Minnesota), and allowed general jurisdiction by consent based on compliance with corporate registration. Mitchell v. Eli Lilly & Co., 159 F. Supp.3d 967, 975-79 (E.D. Mo. 2016); Steadfast Insurance Co. v. Schindler Elevator Corp., 2016 WL 7332992, at *2-3 (W.D. Mo. Dec. 16, 2016); Regal Beloit America, Inc. v. Broad Ocean Motor LLC, 2016 WL 3549624, at *4-5 (E.D. Mo. June 30, 2016); Chalkey v. Smithkline Beecham Corp., WL 705134, at *4 (E.D. Mo. Feb. 23, 2016); Jackson v. SmithKline Beecham Corp., 2016 WL 454735, at *1 (E.D. Mo. Feb. 5, 2016); Trout v. SmithKline Beecham Corp., 2016 WL 427960, at *1 (E.D. Mo. Feb. 4, 2016); Gracey v. Janssen Pharmaceuticals, Inc., 2015 WL 2066242, at *3 n.4 (E.D. Mo. May 4, 2015).  Cf. Ocepek v. Corporate Transportation, Inc., 950 F.2d 556, 557 (8th Cir. 1991) (pre-Bauman decision extending Knowlton to Missouri law).  No federal court has permitted a jurisdiction-by-consent theory since the Missouri Supreme Court’s decision in Dolan.

Montana

In Montana, “[t]he appointment or maintenance in this state of a registered agent does not by itself create the basis for personal jurisdiction over the represented entity in the state.”  Mont. Code Ann. §35-7-105.  There are few court decisions, but the Ninth Circuit declined to permit consent through registration.  King v. American Family Mutual Insurance Co., 632 F.3d 570, 579 (9th Cir. 2011) (where the nonresident defendant’s “sole contacts” work “Certificates of Authorization and . . . an agent for service of process” it could not support general jurisdiction) (applying Montana law).  The Supreme Court’s reversal of Montana’s adverse general jurisdiction decision in BNSF Railway Co. v. Tyrrell, 137 S. Ct. 1549 (2017), expressly declined to discuss jurisdiction by consent, because the Montana Supreme Court had not addressed that issue.  With the statute and the Ninth Circuit, Montana is looking all right on this.

Nebraska

Under Nebraska law, “[b]y designating an agent upon whom process may be served within [the] state, a defendant has consented to the jurisdiction in personam by the proper court.”  Mittelstadt v. Rouzer, 328 N.W.2d 467, 469 (Neb. 1982); see also Ytuarte v. Gruner & Jahr Printing & Publishing Co., 935 F.2d 971, 973 (8th Cir. 1991) (appointment of an agent for service of process by corporate defendants gives consent to the jurisdiction of a state’s courts for any cause of action, whether or not arising out of activities within the state) (applying Nebraska law).  Decisions after Bauman have not retreated from this type of consent-based jurisdiction, despite the Supreme Court’s curtailment of general jurisdiction.  See, e.g., Consolidated Infrastructure Group, Inc. v. USIC, LLC, 2017 WL2222917, at *7 (D. Neb. May 18, 2017) (“[o]ne of the most solidly established ways of giving . . . consent [to general jurisdiction] is to designate an agent for service of process within the State”; citing Knowlton (see Minnesota)); Perrigo Co. v. Merial Ltd., 2015 WL 1538088, at *7 (D. Neb. April 7, 2015) (allowing general jurisdiction based on consent through registration).  Nebraska is another state firmly in the expansive jurisdiction category.

Nevada

Nevada’s Supreme Court has held that a foreign corporation’s compliance with the  state’s registration statute does not “in itself subject a nonresident . . . company to the personal jurisdiction of Nevada Courts.”  Freeman v. Second Judicial Dist. Court, 1 P.3d 963, 968 (Nev. 2000) ( “[o]ther courts and legal scholars have agreed that the mere act of appointing an agent to receive service of process, by itself, does not subject a non-resident corporation to general jurisdiction”).  Accord Hunt v. Auto-Owners Insurance Co., 2015 WL 3626579, *5 n.2 (D. Nev. June 10, 2015) (“corporate licensure and amenability to service of process “in Nevada does not establish personal jurisdiction”).  Nevada is solid.

New Hampshire

New Hampshire’s registration statute does not indicate that a nonresident defendant’s compliance results in its consent to general jurisdiction.  The First Circuit has held that “[c]orporate registration in New Hampshire adds some weight to the jurisdictional analysis, but it is not alone sufficient to confer general jurisdiction.” Cossaboon v. Maine Medical Center, 600 F.3d 25, 37 (1st Cir. 2010) (applying New Hampshire law).  Cossaboom did not even mention Holloway v. Wright & Morrissey, Inc., 739 F.2d 695 (1st Cir. 1984), which in an entirely non-constitutional analysis interpreted New Hampshire’s statute, at least for litigation “causally connected” to New Hampshire, registration constituted “consent[] to jurisdiction.”  Id. at 699.  Holloway is best interpreted as a specific jurisdiction case, as it refused to rule on whether registration “would authorize a suit on a cause of action that has no relationship to the state of New Hampshire.”  Id.  Although there is that old case, we put New Hampshire in the anti-consent majority.

New Jersey

While the New Jersey Supreme Court has yet to preclude the consent to general jurisdiction through registration to do business, the Appellate Division recently did, in light of Bauman.  In Dutch Run-Mays Draft, LLC v. Wolf Block, LLP, 164 A.3d 435 (N.J. App. Div. 2017), the court could not “agree business registration rises to consent to submit to the general jurisdiction in the forum,” given Bauman’s “clear narrow application of general jurisdiction,” and declining to follow prior contrary precedent.  Id. at 444-45.  Although some New Jersey federal courts allowed consent by registration before Dutch Run, the majority did not.  See, e.g., Boswell v. Cable Services Co., 2017 WL 2815077, at *4-6 (D.N.J. June 28, 2017) (New Jersey registration statute lacked “express language” indicating consent, rejecting general jurisdiction on basis of registration); Display Works, LLC, v. Bartley, 182 F. Supp.3d 166, 175-76 (D.N.J. 2016) (rejecting general jurisdiction by consent; “the sweeping propositions of jurisdictional power in Pennsylvania Fire . . . cannot be squared with” Bauman); Singh v. Diesel Transportation, LLC, 2016 WL 3647992, at *3 (D. N.J. July 7, 2016) (“reject[ing] Plaintiff’s argument that compliance with [a statutory] designation of agent requirement renders [defendant] susceptible to general jurisdiction in New Jersey”); McCourt v. A.O. Smith Water Products Co., 2015 WL 4997403, at *4 (D.N.J. Aug. 20, 2015) (“The single fact that Defendant registered to do business in New Jersey is insufficient to conclude that it ‘consented’ to jurisdiction here.”); Kubin v. Orange Lake Country Club, Inc., 2010 WL 3981908, at *3 (D.N.J. Oct. 8, 2010) (pre-Bauman); Davis v. Quality Carriers, Inc., 2009 WL 3335860, at *3 (D.N.J. Oct. 15, 2009) (rejecting jurisdiction by consent by designation of agent for service of process under federal statute; pre-Bauman).

Post-Bauman New Jersey cases that allowed jurisdiction-by-consent based on registration were all pharmaceutical patent cases decided prior to the Federal Circuit’s decision in Acorda Therapeutics Inc. v. Mylan Pharmaceuticals, Inc., 817 F.3d 755 (Fed. Cir. 2016), which declined to base general jurisdiction on this basis.  See Senju Pharmaceutical Co. v. Metrics, Inc., 96 F. Supp.3d 428, 436-37 (D.N.J. 2015) (following Pa. Fire); Otsuka Pharmaceutical Co. v. Mylan Inc., 2015 WL 1305764, at *8-11 (D.N.J. March 23, 2015) (same).

Unless and until the New Jersey Supreme Court messes things up, New Jersey now looks strong against jurisdiction by consent.

New Mexico

According to the New Mexico Supreme court “[w]hile designation of an agent for service of process may confer power on a state to exercise its jurisdiction, it does not automatically do so.”  Page & Wirtz Construction Co. v. C & G Prestressed Concrete, 772 P.2d 1298, 1300 (N.M. 1989).  The Tenth Circuit has reached a similar result. Budde v. Ling-Temco-Vought, Inc., 511 F.2d 1033, 1036 (10th Cir. 1975) (applying New Mexico law).  But see Werner v. Wal-Mart Stores, Inc., 861 P.2d 270, 272-73 (N.M. App. 1993) (interpreting registrations statutes and concluding that “without an express limitation, the legislature intended [New Mexico’s registration statute] to apply to any claims against a foreign corporation with a registered agent in New Mexico,” and ruling that due process analysis was not necessary, citing Knowlton, 900 F.2d at 1200 (see Minnesota); Fireman’s Fund Insurance Co. v. Thyssen Mining Construction of Canada, Ltd., 2011 WL 13085934, at *2-3 (D.N.M. July 29, 2011), rev’d in part and on other grounds, 703 F.3d 488 (10th Cir. 2012) (following Werner in preference to Budde).  With the New Mexico supreme Court on our side, we’ll put this one in the majority, too.

New York

Many years before Bauman, back in the days of Pennsylvania Fire, the New York Court of Appeals allowed general jurisdiction by consent.  Bagdon v. Philadelphia & Reading Coal & Iron Co., 111 N.E. 1075, 1077 (N.Y. 1916).  While Bagdon has not been overruled, a distinct majority of New York state and federal cases have recognized, since Bauman, that general jurisdiction can no longer constitutionally be obtained by “consent” amounting to nothing more than registration to do business in New York.  One of the more noteworthy cases is Minholz v. Lockheed Martin Corp., 227 F. Supp.3d 249 (N.D.N.Y. 2016), concluding after a lengthy discussion of conflicting precedents – particularly Brown (see Connecticut) −  that general jurisdiction can no longer be created by registration to do business.  “[T]the Supreme Court’s shift in the general jurisdiction analysis over foreign corporations from the ‘minimum contacts’ review described in International Shoe to the more demanding ‘essentially at home’ test enunciated in [Bauman] − suggests that federal due process rights likely constrain an interpretation that transforms a run-of-the-mill registration and appointment statute into a corporate ‘consent’ to the exercise of general jurisdiction.”  Id. at 264 (citations and quotation marks omitted).

Other post-Bauman New York decisions rejecting general jurisdiction by “consent” resting upon corporate registration are:  Sae Han Sheet Co. v. Eastman Chemical Corp., 2017 WL 4769394, at *6 (S.D.N.Y. Oct. 19, 2017) (“corporations do not consent to general jurisdiction when they register under the various New York registration statutes”); Sonterra Capital Master Fund Ltd. v. Credit Suisse Group AG, ___ F. Supp.3d ___, 2017 WL 4250480, at *46 (S.D.N.Y. Sept. 25, 2017) (rejecting registration to do business under banking statute as consent to general jurisdiction); Spratley v. FCA US LLC, 2017 WL 4023348, at *3-4 (N.D.N.Y. Sept. 12, 2017) (“Since every state in the union has a business registration statute, treating the registration to do business in a state as an implicit consent to general jurisdiction must also be ‘unacceptably grasping.’”); Australia & New Zealand Banking Group Ltd. v. APR Energy Holding Ltd., 2017 WL 3841874, at *3-4 (S.D.N.Y. Sept. 1, 2017) (“a foreign corporation did not consent to the exercise of general jurisdiction simply by registering to do business and appointing an agent”; third-party discovery case); Wilderness USA, Inc. v. DeAngelo Brothers LLC, ___ F. Supp.3d ___, 2017 WL 3635123, at *7- (W.D.N.Y. Aug. 23, 2017) (rejecting general jurisdiction by consent; “this doctrine has been invalidated by the Supreme Court’s decision in Daimler”); FrontPoint Asian Event Driven Fund, L.P. v. Citibank, N.A., 2017 WL 3600425, at *3-5 (S.D.N.Y. Aug. 18, 2017) (“Plaintiffs may not use New York’s [banking] registration statute as a basis for asserting general jurisdiction over the Foreign Defendants”); Famular v. Whirlpool Corp., 2017 WL 2470844, at *4 (S.D.N.Y. June 7, 2017) (“the reasoning [of pre-Bauman precedent was] incomplete and unpersuasive in that those cases did “not meaningfully analyze the impact of [the] watershed case”); Justiniano v. First Student Management LLC, 2017 WL 1592564, at *6 (E.D.N.Y. April 26, 2017) (jurisdiction by consent “has been placed in serious doubt” by recent Supreme Court precedent); Sullivan v. Barclays PLC, 2017 WL 685570, at *39-40 (S.D.N.Y. Feb. 21, 2017) (no consent to general jurisdiction based on registration under banking statute); Weiss v. National Westminster Bank PLC, 176 F. Supp.3d 264, 277 & n.7 (E.D.N.Y. 2016) (same); Strauss v. Credit Lyonnais, S.A., 175 F. Supp.3d 3, 17 & n.7 (E.D.N.Y. 2016) (same); Taormina v. Thrifty Car Rental, 2016 WL 7392214, at *6 (S.D.N.Y. Dec. 21, 2016) (applying Brown to New York law; prior precedent not valid after Bauman); Bonkowski v. HP Hood, LLC, 2016 WL 4536868, at *3 (E.D.N.Y. Aug. 30, 2016) (following Brown; pre-Bauman jurisdiction by consent precedent no longer viable); In re Foreign Exchange Benchmark Rates Antitrust Litigation, 2016 WL 1268267, at *2 (S.D.N.Y. March 31, 2016) (registration to do business not “broad[]” consent to jurisdiction); Chatwal Hotels & Resorts LLC v. Dollywood Co., 90 F. Supp.3d 97, 105 (S.D.N.Y. 2015) (“the mere fact of [defendant’s] being registered to do business is insufficient to confer general jurisdiction in a state that is neither its state of incorporation or its principal place of business”); Amelius v. Grand Imperial LLC, ___ N.Y.S.3d ___, 2017 WL 4158854, at *9-13 (N.Y. Sup. Sept. 11, 2017) (defendant “is not subject to general jurisdiction merely because it has registered to do business here”); Mischel v. Safe Haven Enterprises, LLC, 2017 WL 1384214, at *5 (N.Y. Sup. April 17, 2017) (general jurisdiction based on registration to do business is improperly “coercive” after Bauman); Gliklad v. Bank Hapoalim B.M., 2014 WL 3899209, at *1 (N.Y. Sup. Aug. 4, 2014) (in light of Bauman jurisdiction by consent “is no basis for the exercise of general jurisdiction”). Cf. Gucci America, Inc. v. Weixing Li, 768 F.3d 122, 135, 137 & n.15 (2d Cir. 2014) (rejecting general jurisdiction; after Bauman, defendant’s registration and agent for service of process are factors to consider regarding specific jurisdiction) (applying New York law); Hood v. Ascent Medical Corp., 691 Fed. Appx. 8 (2d Cir. 2017) (forum selection clause does not constitute consent to jurisdiction); Magdalena v. Lins, 999 N.Y.S.2d 44, 45 (N.Y.A.D. 2014) (no general jurisdiction by consent via forum selection clause); Chambers v. Weinstein, 2014 WL 4276910, at *16, 997 N.Y.S.2d 668 (table) (N.Y. Sup. Aug. 22, 2014) (New York law license does not create general jurisdiction over attorney residing out of state).

Contrary post-Bauman decisions that continue to follow Bagdon are: Wheeler v. CBL & Associates Properties, Inc., 2017 WL 3611295, at *2-3 (N.Y. Sup. Aug. 17, 2017); Serov v. Kerzner International Resorts, Inc., 43 N.Y.S.3d 769 (table), 2016 WL 4083725, at *4-5 (N.Y. Sup. July 26, 2016); Aybar v. Aybar, 2016 WL 3389890, at *3-4 (N.Y. Sup. May 25, 2016); Corporate Jet Support, Inc. v. Lobosco Insurance Group, LLC, 2015 WL 5883026, at *2 (N.Y. Sup. Oct. 7, 2015); Fallman v. Hotel Insider Ltd., 2016 WL 316378, at*2 (S.D.N.Y. Jan. 15, 2016); Bailen v. Air & Liquid Systems Corp., 2014 WL 3885949, at *4-5 (N.Y. Sup. Aug. 5, 2014); Beach v. Citigroup Alternative Investments, 2014 WL 904650, at *6 (S.D.N.Y. March 7, 2014).

It’s been a helluva fight, but right now New York looks pretty firm, particularly in federal court.

North Carolina

Long ago, the North Carolina Supreme Court held that “the casual presence of the corporate agent or even his conduct of single or isolated activity in a state in the corporation’s behalf are not enough to subject it to suit on causes of action unconnected with the activities there.” Byham v. National Cibo House Corp., 143 S.E.2d 225, 231 (N.C. 1965).  Other courts have refused to construe North Carolina’s registration statute – which does not discuss jurisdiction – as authorizing jurisdiction on the basis of a foreign corporation’s registration alone.  Sebastian v. Davol, Inc., 2017 WL 3325744, at *11 (W.D.N.C. Aug. 3, 2017) (North Carolina statute “contains no reference to jurisdiction by consent”; finding “no decision − state or federal − construing North Carolina’s registration or licensing statutes to extend personal jurisdiction over registered businesses”); JPB Installers, LLC v. Dancker, Sellew & Douglas, Inc., 2017 WL 2881142, at *4 (M.D.N.C. July 6, 2017) (“Long-standing precedent forecloses [plaintiff’s] argument that [defendant’s] registration to do business in North Carolina is sufficient to subject it to the general jurisdiction of this Court.”); Public Impact, LLC v. Boston Consulting Group, Inc., 117 F. Supp.3d 732, 740 (M.D.N.C. 2015) (there is “no decision − State or federal − construing North Carolina’s registration statute to extend personal jurisdiction over registered businesses”); Thompson v. Mission Essential Personnel, LLC, 2013 WL 6058308, at *2 n. 1 (M.D.N.C. Nov. 14, 2013) (“registration to do business in the state alone is not the deciding factor on which jurisdiction should be determined”), adopted, 2014 WL 4745947 (M.D.N.C. Sept. 23, 2014).  Rock solid.

North Dakota

The North Dakota statute expressly provides that registration does not equate to consent to jurisdiction, stating that “[t] appointment or maintenance in this state of a registered agent does not by itself create the basis for personal jurisdiction over the represented entity in this state.”  N.D. Cent. Code§§10-01.1-15 (2012).  Thus, “[m]ere registration to transact business in North Dakota does not render [defendant] subject to general jurisdiction in the state.” HomeRun Products, LLC v. Twin Towers Trading, Inc., 2017 WL 4293145, at *4 (D.N.D. Sept. 27, 2017).  South Dakota looks solid.

Ohio

Ohio State and federal courts have ruled that designating an agent for service is insufficient to warrant consent to general jurisdiction, notwithstanding due process.  The Supreme Court determined that, if Ohio were to treat the designation of an agent for service of process as consent to general jurisdiction, that would violate the Commerce Clause:

[A] designation with the Ohio Secretary of State of an agent for the service of process [that] likely would have subjected [defendant] to the general jurisdiction of Ohio courts over transactions in which Ohio had no interest . . . is an unreasonable burden on commerce.

Bendix Autolite Corp. v. Midwesco Enterprises, Inc., 486 U.S. 888, 895 (1988).

In Wainscott v. St. Louis-S.F. Railway Co., 351 N.E.2d 466, 471 (1976), the Ohio Supreme Court stated that the “consent theory” of personal jurisdiction only extends to claims based on minimum contacts with the forum, reversing the appellate court’s denial of a motion to dismiss for lack of jurisdiction.  See also Pittock v. Otis Elevator Co., 8 F.3d 325, 329 (6th Cir. 1993) (following Wainscott) (applying Ohio law); Avery Dennison Corp. v. Alien Tech. Corp., 632 F. Supp. 2d 700, 711 n.7 (N.D. Ohio 2008) (“It appears that registration to do business in Ohio is simply one fact to consider in analyzing personal jurisdiction.”).  These cases indicate that the recent contrary decision in Grubb v. Day to Day Logistics, Inc., 2015 WL 4068742, at *3 (S.D. Ohio July 2, 2015), is wrongly decided and based on obsolete precedent.  We’re putting Ohio into the anti-consent column.

Oklahoma

Oklahoma’s registration statute is silent on the issue of whether registration constitutes consent to jurisdiction.  Okla. Stat. tit. 18 §1022.  Although Oklahoma state courts have yet to address this issue, a federal district court acknowledged the lack of state precedent, but followed Bauman, holding that mere registration to do business is insufficient to establish general jurisdiction, dismissing the prescription pharmaceutical product liability claims of nonresident plaintiffs.  Aclin v. PD-RX Pharmaceuticals, Inc., 189 F. Supp.3d 1294, 1305 (W.D. Okla. 2016) (recognizing the Supreme Court’s and Tenth Circuit’s “preferential construction,” and declining “to exercise general jurisdiction over the Defendants on the basis of their registration in Oklahoma).  Aclin relied on Samuelson v. Honeywell, 863 F. Supp. 1503, 1507 (E.D. Okla. 1994), which rejected the argument that registration in Oklahoma constitutes consent to general jurisdiction pre-Bauman.  See Guillette v. PD-RX Pharmaceuticals, Inc., 2016 WL 3094073, at *8 (W.D. Okla. June 1, 2016) (same); Manning v. PD-RX Pharmaceuticals Inc., 2016 WL 3094075, at *7-8 (W.D. Okla. June 1, 2016) (same); Nauman v. PD-RX Pharmaceuticals Inc., 2016 WL 3094081, at *7-8 (W.D. Okla. June 1, 2016) (same).  Oklahoma is OK.

Oregon

The Oregon Supreme Court granted a writ of mandate, reversed a lower court’s decision and held that a foreign corporation’s registration to do business did not “as a matter of state law, the legislature did not intend that appointing a registered agent . . . would constitute consent to the jurisdiction of the Oregon courts.”  Figueroa v. BNSF Railway Co., 390 P.3d 1019, 1022 (Or. 2017).  Figueroa ruled that “appointing a registered agent to receive service of process merely designates a person upon whom process may be served,” but “does not constitute implied consent to the jurisdiction.”  Id.  See also Lanham v. Pilot Travel Centers, LLC, 2015 WL 5167268, at *11 (D. Or. Sept. 2, 2015) (“nothing in Oregon law supports a conclusion that compliance with these statutes confers general personal jurisdiction over a nonresident defendant for conduct occurring outside Oregon”).  Solid.

Pennsylvania

Pennsylvania is reputedly the only state in the nation with a corporate registration statute specifically providing that a nonresident corporation consents to “general jurisdiction” by complying with the statute.  42 Pa. Cons. Stat. Ann. §5301.  Well before Bauman, the Third Circuit interpreted compliance with this statute as consent to suit on any cause of action and as per se sufficient to support for general jurisdiction . Bane v. Netlink, Inc., 925 F.2d 637, 641 (3d Cir. 1991).  Some Post-Bauman courts have rejected registration to do business in Pennsylvania as a basis for general jurisdiction.  Antonini v. Ford Motor Co., 2017 WL 3633287, at *2 n.2 (M.D. Pa. Aug. 23, 2017) (registration, plus other contacts “more closely resemble those found insufficient to establish general jurisdiction”); McCaffrey v. Windsor at Windermere Ltd. Partnership, 2017 WL 1862326, at *4 (E.D. Pa. May 8, 2017) (registration to do business insufficient for general jurisdiction under Bauman); Spear v. Marriott Hotel Services, Inc., 2016 WL 194071, at *2 (E.D. Pa. Jan. 15, 2016) (rejecting plaintiff’s “reli[ance] solely on the fact that defendants are registered to do business” in Pennsylvania).  However,  most decisions applying Pennsylvania law have continued to engage in what is now gross jurisdictional overreach.  Mendoza v. Electrolux Home Products, Inc., 2017 WL 5010352, at *5 (E.D. Cal. Nov. 2, 2017) (following Bors) (applying Pennsylvania law); Plumbers’ Local Union No. 690 Health Plan v. Apotex Corp., 2017 WL 3129147, at *10-11 (E.D. Pa. July 24, 2017); Hegna v. Smitty’s Supply, Inc., 2017 WL 2563231, at *3-4 (E.D. Pa. June 13, 2017); Kukich v. Electrolux Home Products, Inc., 2017 WL 345856, at *6 (D. Md. Jan. 24, 2017) (following Bors) (applying Pennsylvania law); Bors v. Johnson & Johnson, 208 F. Supp.3d 648, 653-55 (E.D. Pa. 2016).  Cf. George v. A.W. Chesterton Co., 2016 WL 4945331, at *3 (W.D. Pa. Sept. 16, 2016) (general jurisdiction not created, even under Bane, by registration after an alleged injury).  As we have explained before, a state statute cannot trump the due process requirements of the federal constitution, so Pennsylvania’s statute and the decisions applying it are of doubtful constitutional validity.  Although there are some cracks, with the uniquely adverse statutory language, we’re leaving Pennsylvania in the pro-consent camp unless and until something dramatic happens.

Rhode Island

Although no state court has adjudicated this issue, federal courts have rejected this argument.  North American Catholic Education Programming Foundation, Inc. v. Cardinale, 567 F.3d 8, 16 n.6 (1st Cir. 2009) (“courts have consistently held that the appointment of an agent of process alone does not suffice to allow for the exercise of general jurisdiction”) (applying Rhode Island law); Phoenix Insurance Co. v. Cincinnati Indemnity Co., 2017 WL 3225924, at *4 (Mag. D.R.I. March 3, 2017) (defendant’s “license to transact insurance business in Rhode Island and its designation of [a] Rhode Island . . . agent to accept service of process do not tip the balance in favor of asserting general jurisdiction”), adopted, 2017 WL 2983879 (D.R.I. July 13, 2017); Harrington v. C.H. Nickerson & Co., 2010 WL 3385034, at *4 (D.R.I. Aug. 25, 2010) (“this Court will not presume that Defendant consented to personal jurisdiction where there is no indication that either the Rhode Island legislature, or Defendant itself, intended that corporate registration would serve as consent to personal jurisdiction in Rhode Island”).  Rhode Island is all right.

South Carolina

As long ago as 1971 the court in Ratliff v. Cooper Laboratories, Inc., 444 F.2d 745 (4th Cir. 1971) (applying South Carolina law), held that “the application to do business and the appointment of an agent for service to fulfill a state law requirement is of no special weight in” a general jurisdictional context.  See also Yarborough & Co. v. Schoolfield Furniture Industries, Inc., 268 S.E.2d 42, 44 (S.C. 1980) (corporate domestication statute conferred jurisdiction only as “to causes of action arising directly from the act relied upon to establish jurisdiction”).  A post-Bauman South Carolina court held that “even after an effective service of process, personal jurisdiction must still comport with due process,” rejecting an argument that mere service on a foreign corporation’s appointed agent effectuated personal jurisdiction.  Gibson v. Confie Insurance Group Holdings, Inc., 2017 WL 2936219, at *6 (D.S.C. July 10, 2017).  See Gracious Living Corp. v. Colucci & Gallaher, PC, 216 F. Supp. 3d 662, 668 (D.S.C. 2016) (service of defendant’s statutory agent for service did not create general personal jurisdiction); Gabrish v. Strickland Marine Agency, Inc., 2005 WL 5168410 (S.C. Dist. Dec. 2, 2005) (following Ratliff).  Rock solid.

South Dakota

South Dakota’s registration statute expressly mandates that “[t]he appointment or maintenance in this state of a registered agent does not by itself create the basis for personal jurisdiction.”  S.D. Cod. L. §59-11-21 (2009).  This provision overruled a contrary federal court decision.  See Sondergard v. Miles, Inc., 985 F.2d 1389, 1391 (8th Cir. 1993) (applying South Dakota law).  On the strength of the statute, we think South Dakota will be all right.

Tennessee

Tennessee state courts “historically” allowed consent on the basis of registration, Davenport v. State Farm Mutual Automobile Insurance Co., 756 S.W.2d 678, 679 (Tenn. 1988) (dictum), but such cases were all pre-Bauman.  Cf. First Community Bank, N.A. v. First Tennessee Bank, N.A., 489 S.W.3d 369, 401-02 (Tenn. 2015) (finding issue waived).  Even before Bauman, Tennessee precedent was not uniform.  JRM Investments, Inc. v. National Standard, LLC, 2012 WL 1956421, at *3 (Tenn. App. May 31, 2012) (affirming dismissal of defendant admittedly with a Tennessee agent for service of process for lack of general jurisdiction).  Since Bauman, federal court decisions have rejected this theory.  Western Express, Inc. v. Villanueva, 2017 WL 4785831, at *5-7 (M.D. Tenn. Oct. 24, 2017) (“it is clear that [defendant’s] designation of an agent for service of process, standing alone, [did] not constitute consent to the general jurisdiction” in Tennessee; “mere designation of an agent for service of process in a particular state, in compliance with a state statute, standing alone, does not constitute consent to general jurisdiction within that state”).  Moreover, a Davenport has been construed as relating to specific jurisdiction only.  Ratledge v. Norfolk Southern Railway Co., 958 F. Supp. 2d 827, 838 (E.D. Tenn. 2013).  Tennessee is all over the lot, so we rate it as undecided.

Texas

Both state and federal Texas courts have ruled that registration to do business does not amount to consent to jurisdiction.  See, e.g., Salgado v. OmniSource Corp., 2017 WL 4508085 (Tex. App. Oct. 10, 2017) (having a “registered agent in Texas . . . [alone] is not enough to subject a nonresident defendant to general jurisdiction”) (unpublished); Northern Frac Proppants, II, LLC v. 2011 NF Holdings, LLC, 2017 WL 3275896, at *16 (Tex. App. July 27, 2017) (“general jurisdiction contacts are not established by showing that foreign business entities . . . were registered to do business in Texas, and (iii) had registered agents for service of process in Texas”) (unpublished); Asshauer v. Glimcher Realty Trust, 228 S.W.3d 922, 933 (Tex. App. 2007) (“having a registered agent and being registered to do business in Texas only potentially subjects a foreign corporation to jurisdiction”); Conner v. ContiCarriers & Terminals, Inc., 944 S.W.2d 405, 416 (Tex. App. 1997) (“By registering to do business, a foreign corporation only potentially subjects itself to jurisdiction.”) (emphasis original); Wenche Siemer v. Learjet Acquisition Corp., 966 F.2d 179, 183 (5th Cir. 1992) (“the mere act of registering an agent . . . does not act as consent to be hauled into Texas courts on any dispute with any party anywhere concerning any matter”) (applying Texas law); Agribusiness United DMCC v. Blue Water Shipping Co., 2017 WL 1354144, at *5-6 (S.D. Tex. April 13, 2017) (registration and agent for service of process insufficient to be “at home” and therefore subject to general jurisdiction); ADT, LLC v. Capital Connect, Inc., 2015 WL 7352199, at *5 (N.D. Tex. Nov. 20, 2015) (following Wenche); Fiduciary Network, LLC v. Buehler, 2015 WL 2165953, at *5-6 (N.D. Tex. May 8, 2015) (consent through “registration of an agent for process and registration to do business” will not suffice for general jurisdiction); Transverse, LLC v. Info Directions, Inc., 2013 WL 3146838, at *5 (Mag. W.D. Tex. June 17, 2013) (“Courts have consistently held that the appointment of an agent of process alone does not suffice to allow for the exercise of general jurisdiction.”), adopted, 2013 WL 12133970 (W.D. Tex. Aug. 30, 2013); 800 Adept, Inc. v. Enterprise Rent-A-Car, Co., 545 F. Supp.2d 562, 569 n.1 (E.D. Tex. 2008) (“A party does not consent to personal jurisdiction merely by complying with a state’s registration statutes or appointing an agent for service of process.”); Arkwright Mutual Insurance Co. v. Transportes de Nuevo Laredo, 879 F. Supp. 699, 700-01 (S.D. Tex. 1994) (Texas certificate to do business does not establish general jurisdiction); Leonard v. USA Petroleum Corp., 829 F. Supp. 882, 889 (S.D. Tex. 1993) (“A foreign corporation must have contact, other than mere compliance with Texas domestication requirements, to be subject to personal jurisdiction in Texas.”).  Cf. Johnston v. Multidata Systems International Corp., 523 F.3d 602, 614 (5th Cir. 2008) (“Never before have we held that licenses to do work can create general jurisdiction.”) (applying Texas law).  But see Del Castillo v. PMI Holdings North America, Inc., 2015 WL 3833447, at *3-4 (S.D. Tex. June 22, 2015) (allowing general jurisdiction based on registration and agent for service of process).  Solid.

Utah

Utah’s registration statute “[does] not create an independent basis for jurisdiction.”  Utah Code Ann. § 16-17-401 (2013); see also Oversen v. Kelle’s Transportation Service, 2016 WL 8711343, at *3 (D. Utah May 12, 2016) (registration does not equate to general jurisdiction because “[n]othing in the text [of the statute] suggests that such an act will give rise to general personal jurisdiction or, for that matter, specific personal jurisdiction in any particular case”); Ayers v. Tanami Trading Corp., 2009 WL 1362402, at *3 (D. Utah May 14, 2009) (“[d]esignating an agent for the service of process within a state, without more, is insufficient to establish general jurisdiction”); Miller v. Robertson, 2008 WL 270761, at *5 (D. Utah Jan. 29, 2008) (“qualifying to do business or appointing a registered agent are relevant factors . . ., but they are not decisive by themselves”).  Utah looks good.

Vermont

Vermont’s statute and state cases provide no guidance.  Federal courts have predicted that Vermont would reject consent to general jurisdiction based on registration.  Bertolini-Mier v. Upper Valley Neurology Neurosurgery, P.C., 2016 WL 7174646, at *4 (D. Vt. Dec. 7, 2016) (“mere registration to do business in Vermont is not determinative of the jurisdictional questions in this case,” following Brown, (see Connecticut)); Viko v. World Vision Inc., 2009 WL 2230919, at *7 (D. Vt. July 24, 2009) (“compliance with Vermont’s foreign corporation registration statute does not entail consent to general personal jurisdiction, at least independently of the minimum contacts required by due process”).  Somewhat surprisingly, Vermont also looks good.

Virginia

The consequence of registration with respect to general jurisdiction is unclear, because there is no controlling case law, and the relevant decisions conflict.  Most recently, a Virginia trial court ruled that “[d]esignating an agent does not amount to continuous and systematic operations that render [defendant] ‘essentially at home’ in Virginia, as is minimally required for general personal jurisdiction.”  New York Commercial Bank v. Heritage Green Development, LLC, 2017 WL 954197, at *2 (Va. Cir. March 7, 2017).  New York Commercial followed Reynolds & Reynolds Holdings, Inc. v. Data Supplies, Inc., 301 F. Supp. 2d 545, 551 (E.D. Va. 2004), which held that the consent-by-registration theory does not comport with due process).  Id. at 551.  Conversely, Cognitronics Imaging Systems, Inc. v. Recognition Research, Inc., 83 F. Supp.2d 689, 693-94 (E.D. Va. 2000), held, well before Bauman, that compliance with a corporate registration statute did result in consent to general jurisdiction.  Somewhat surprisingly, Virginia still seems too close to call.

Virgin Islands

Citing Bauman’s “reluctance to extend general jurisdiction,” In re Asbestos Products Liability Litigation (No. VI), 2014 WL 5394310 (E.D. Pa. Oct. 23, 2014) (applying Virgin Islands law), held that a defendant’s current Virgin Islands license to do business and agent for service of process were “not so significant that they could substitute for its place of incorporation or principal place of business.”  Id. at *9.  Not a lot, but what there is looks good.

Washington

By statute, designation or maintenance in this state of a registered agent does not by itself create the basis for personal jurisdiction over the represented entity.”  Wash. Rev. Code §§23.95.460; Washington Equipment Manufacturing Co. v. Concrete Placing Co., 931 P.2d 170, 173 (Wash. App. 1997) (“A certificate of authority to do business and appointment of a registered agent do not then confer general jurisdiction over a foreign corporation.”); Cox v. Alco Industries, Inc., 2015 WL 10891167, at *4-6 (Wash. Super. Sept. 10, 2015) (registration to do business, even with other contacts, insufficient to support general jurisdiction; following Brown (see Connecticut); Dokoozian Construction LLC v. Executive Risk Specialty Insurance Co., 2015 WL 12085859, at *2 (W.D. Wash. July 28, 2015) (“reject[ing] the idea that the appointment of an agent for service of process alone works as consent to be sued in that state”); U.S. ex rel. Imco General Construction, Inc. v. Insurance Co. of Pennsylvania, 2014 WL 4364854, at *3 (W.D. Wash. Sept. 3, 2014) (basing general jurisdiction on registration to do business was “exorbitant” assertion of jurisdiction barred by Bauman).  Washington looks solid.

West Virginia

While the registration statute is silent on the jurisdictional invocations, federal courts have found that registration alone did not establish general jurisdiction.  Gallaher v. KBR, Inc., 2010 WL 2901626, at *10 (N.D.W. Va. July 21, 2010) (corporate registration and having agent for service of process “are not sufficient to establish general personal jurisdiction”); In re Mid-Atlantic Toyota Antitrust Litigation, 525 F. Supp. 1265, 1278 (D. Md. 1981) (“With no contact with West Virginia . . ., [defendant’s] consent [by registering to do business] to jurisdiction is an insufficient basis for personal jurisdiction”) (applying West Virginia law), aff’d, 704 F.2d 125 (4th Cir. 1983).  The sample isn’t large, but West Virginia looks all right on this issue.

Wisconsin

The Wisconsin Supreme Court held post-Bauman that “appointing a registered agent under Wis. Stat. § 180.1507 does not signify consent to general personal jurisdiction.  The statute’s plain language does not mention jurisdiction, and [plaintiff’s] proffered deviation from the text would place the statute’s constitutionality into doubt.”  Segregated Account of Ambac Assurance Corp. v. Countrywide Home Loans, 898 N.W.2d 70, 77 (Wis. 2017).  Expansive jurisdiction by consent “would extend Wisconsin’s exercise of general jurisdiction beyond the tapered limits recently described by the Supreme Court.”  Id. at 80.  “A foreign corporation’s contacts with Wisconsin would be irrelevant so long as it registered an agent for service of process − which all foreign corporations authorized to transact business in this state must do,” which would render the Long Arm statute “idle and nugatory.”  Id. at 79. Pennsylvania Fire “represent[ed] a disfavored approach to general jurisdiction.”  Id. at 82.  Now solid.

Wyoming

Wyoming’s registration of foreign corporations statutes and cases have yet to address the issue of consent to general jurisdiction through registration or appointment of an agent.  Matching question marks at the beginning and the end of the alphabet.

A (relatively) long time ago in a state not so far away, the Michigan Legislature enacted the Michigan Product Liability Act.  It contained a provision providing the manufacturers of FDA-approved drugs with immunity from product liability absent the application of two narrow exceptions.  A challenge to the constitutionality of the provision soon followed and the Michigan Supreme Court, in Taylor v. Smithkline Beecham Corp., 658 N.W.2d 127 (Mich. 2003), basically said the legislature can enact a law like that and the immunity on drug manufacturers was as broad as it seemed.  (This guest post provides a nice history.)  Other decisions followed, like Garcia v. Wyeth-Ayerst Labs., 385 F.3d 961 (6th Cir. 2004), and Desiano v. Warner-Lambert & Co., 467 F.3d 85, 98 (2d Cir. 2006), aff’d by equally divided court, 552 U.S. 440 (2008), coming down on opposite sides of the issue of whether the first exception—the defendant “before the event that allegedly caused the injury . . . intentionally withholds from or misrepresents to [FDA] information concerning the drug that is required to be submitted” under the FDCA that would have prevented original or continued approval—runs into Buckman preemption.  What also followed was that Michiganders who wanted to sue over alleged drug started to go elsewhere.  (Not to galaxies several parsecs—a unit of distance, not time—away, but just to other states.)  They did so because they hoped that the immunity in § 600.2946(5) would not follow them.

We have called this phenomenon the Michigan diaspora, and, while the dispersal of the Michigan litigation tourists is merely temporary, their cases do keep popping up in some likely spots.  Just last month, we discussed how West Virginia state courts have applied Michigan law to the claims of Michiganders hoping to find more plaintiff-friendly law.  We have also discussed how the claims of Michiganians claiming gynecomastia from Risperdal have fared in the Philadelphia Court of Common Pleas, a jurisdiction that has seen plenty of action in that particular litigation.  We praised the court’s application of the Michigan statute to bar the claims.  The plaintiffs in that case appealed to the Superior Court of Pennsylvania, which has reversed more than a few defense rulings we have liked.  Instead In re Risperdal Litig., __ A.3d __, 2017 WL 5712521 (Pa. Super. Nov. 28, 2017), respected the force of the Michigan Legislature’s clear enactment and affirmed.

On appeal, the plaintiffs agreed that Michigan law applied, but argued that the statute provided no protection where the use was off-label.  When the plaintiffs (actually all but one of them) were prescribed the drug it had been approved but did not yet have an indication for use in juveniles, which they were at the time.  The statute, however, hinged on whether “the drug was approved for safety and efficacy,” not whether the particular indication had been approved.  Federal courts had followed “the plain language of the statute” and found off-label use was irrelevant to the application of immunity as long as the drug was approved.  2017 WL 5712521, **5-6.  “Thus, we conclude that as long s a drug has received approval, and its label is compliant with FDA regulations, the MPLA applies to bar any product liability claim, despite the drug’s indicated uses.” Id. at *6.

Next, plaintiffs argued that they had enough evidence to raise a genuine issue as to the statutory exception based on a fraud on the FDA.  Defendants claimed that any attempt to meet the exception would be preempted because the FDA had never found such a fraud.  The Superior Court did not take the opportunity to add to either side of the preemption ledger because plaintiffs did not have the evidence they needed anyway. Id. at *7.  The statute did not just require any fraud on FDA, but a withholding of information such that its proper submission would have meant “the drug would not have been approved” or FDA “would have withdrawn approval for the drug.”  Plaintiffs argued that their evidence of purported fraud was relevant to the approval of the additional indication for juvenile use, but they never contended that the drug would not have been approved or would have been withdrawn.  “[T]he proof of fraud a plaintiff is required to present in order to receive the benefit of the fraud exception must relate to the initial FDA approval.” Id. at *8.  Given that FDA had denied a citizen’s petition in 2014 that requested the drug be withdrawn, it was clear that any purported fraud related to the application to add the juvenile use indication almost a decade earlier was insufficient to trigger the exception. Id. We all know Yoda famously said “Do or do not.  There is no try.”  Here, plaintiffs tried and tried again, but they did not get around the statutory immunity despite their sojourn to Pennsylvania.

 

This guest post is by Kevin Hara, an associate at Reed Smith and relatively frequent contributor to the Blog.  Here, he discusses two recent favorable procedural developments in further appeals from two really awful decisions by intermediate courts of appeals.  As always, our guest posters are 100% responsible for what they write – due 100% of the credit, as well as any blame.  Take it away Kevin.

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SCOTUS Calls For Solicitor General’s Views In Third Circuit Fosamax Case

Friday December 8 was a day with two items that are particularly noteworthy because of their potentially momentous implications. Remember the Blog’s previous lambasting of the Third Circuit’s unprecedented Fosamax preemption decision and the haymaker that court unleashed on the drug and device industry, in In re Fosamax (Alendronate Sodium) Products Liability Litigation, 852 F.3d 268 (3d Cir. 2017)?  Now, there is positive news to report. The Supreme Court has invited the Solicitor General “to file a brief in this case expressing the views of the United States.” Merck, Sharp & Dohme Corp. v. Albrecht, et al., No. 14-1900 (Order, Dec. 8, 2017).

What is that? Here is SCOTUSBlog’s description:

“CVSG” stands for “call for the views of the Solicitor General.”  In most cases in which someone is seeking review of the lower courts’ decision, the Court will issue a straightforward grant or denial.  But sometimes the Court will want the government’s views on what it should do in a case in which the government isn’t a party but may still have an interest — for example, because the interpretation of a federal statute is involved.  So the Court will issue an order in which it “invites the Solicitor General to file a brief expressing the views of the United States.”  It isn’t an “invitation” in the sense that the federal government gets to decide whether it wants to file a brief at all, because the Court expects the government to file.  There is no deadline by which the government is required to file the brief, however.  And the government’s recommendation, although not dispositive, will carry significant weight with the Court.

In Fosamax, this development is important because it signals that the case stands out from the general certiorari pool, meaning that review is more likely to be granted.  Statistics are surprisingly hard to come by, but a law review article, Thompson & Wachtell, “An Empirical Analysis of Supreme Court Certiorari Petition Procedures:  The Call for Response and the Call for the Views of the Solicitor General,” 16:2 G. Mason L.R. 237 (2009), analyzed ten years of Supreme Court cases (1994-2004) and concluded:

The overall grant rate increases from 0.9% to 34% following a CVSG from the Court; in other words, the Court is 37 times more likely to grant a petition following a CVSG.  For petitions on the paid docket, the grant rate increases even more, to 42%; a paid petition is 47 times more likely to be granted following a CVSG.

Id. at 245 (emphasis added).  If those somewhat dated statistics are even close to currently accurate, the Fosamax CVSG is a big deal.

Recall that the Third Circuit grossly misinterpreted the “clear evidence” preemption test from Wyeth v. Levine, which held that without clear evidence that the FDA would not have approved the label change, a court cannot rule a manufacturer’s compliance with federal and state law is impossible, and thereby preempted, already an exacting defense.  As the Blog explained in praising the petition for certiorari, the Third Circuit distorted Levine, applied an unprecedented standard, and ruled that a manufacturer could not invoke preemption without “clear and convincing” evidence that the FDA would have rejected a proposed warning.  Thus, not only did the Third Circuit reverse summary judgment for the manufacturer in more than 1000 cases, it rendered impossibility preemption even more difficult than the anti-preemption justices in Levine intended.  The Blog also discussed the Product Liability Advisory Council’s amicus brief in support of the petition here, which explained that the Third Circuit’s decision invites further lower court confusion, obliterates the district court’s ruling that was supported by undisputed evidence, encourages pharmaceutical manufacturers to flood the FDA with proposed label changes, and threatens to stifle the innovation necessary to develop new, potentially life-saving drugs.

This latest development raises defense hopes that SCOTUS will grant the petition, and finally reverse one of the worst decisions of 2017, which would be a huge win for the manufacturer in particular, and of greater significance for the big picture for pharmaceutical companies and consumers in general. Stay tuned.

New Jersey Supreme Court Grants Review of Accutane Cases

Also on December 8, the New Jersey Supreme Court granted the appeals in all of the Accutane cases that the appellate court revived back in July. The Blog has monitored the Accutane litigation through many of the twists and turns of its tortuous existence for more than a decade, first with the Accutane MDL, and then with the New Jersey cases.  As a resident of the San Francisco Bay Area, when I think of the Accutane litigation, I automatically picture Lombard Street, often touted “The Crookedest Street In The World,” with its eight hairpin turns and switchbacks that span the 600 feet of the street’s natural 27° grade.  In fact, Lombard Street is not even the most crooked street in San Francisco, because Vermont Street, has a greater sinuosity at 1.56 versus 1.2 for Lombard, though Vermont at seven turns, has one fewer than its more famous cousin.   Lombard Street and its adornment of brick red and beautiful flowers attracts thousands of tourists per year.  This meandering avenue is difficult to traverse, requires careful navigation, has been around a long time, and produced extreme frustration for those who occupy it: if it sounds familiar, bear in mind that the Accutane litigation likewise has a lengthy history, ongoing since 2003, has zigged and zagged, and neither side is particularly thrilled with the results.  The Blog has discussed many of the good aspects here, (vacating plaintiff verdicts) here, (dismissals based on learned intermediary doctrine) here, (MSJ granted) and here (warnings adequate as a matter of law), as well as the very bad Appellate Division decisions earlier this summer, when the court reinstated more than 2000 causation based dismissals.

With that in mind, here is a very brief summary of the mind-bending history of the Accutane saga and the battle over the proper expert testimony that has hopefully neared its dénouement.  As already discussed at length, the Appellate Division reversed the trial court’s decision that excluded plaintiffs’ expert causation testimony, reviving more than 2000 lawsuits.  Not surprisingly, the manufacturer appealed, supported by amicus briefs from 21 of New Jersey’s largest employers, including many Roche competitors, the HealthCare Institute of New Jersey, the New Jersey Chamber of Commerce, the American Medical Association, and eight scholars and professors of law.  When it comes to expert testimony, New Jersey unfortunately travels The Road Not Taken, applying a “relaxed” standard of expert testimony in toxic tort cases, as set forth in Rubanick v. Witco Chemical Corp., 125 N.J. 421 (1991), rather than the more rigorous federal Daubert standard.  Under Rubanick, expert testimony may be admitted “even though it is controversial and its acceptance is not widespread,” only if “it is based on a sound methodology that draws on scientific studies reasonably relied on in the scientific community and has actually been used and applied by responsible experts or practitioners in the particular field.”  Id. at 447.  In Kemp v. State, 174 N.J. 412, 425-426 (2002), the court ruled that the inquiry was not based on reasonableness, but instead examines “whether comparable experts in the field [would] actually rely on that information.  Kemp, 174 N.J. at 426 (citations and quotations omitted).  Since Rubanick and Kemp, New Jersey courts have continued the state’s unique application of scientific expert testimony with an approach distinct from the more exacting federal standard, resulting in inconsistency, confusion, and the morass of the Accutane litigation.

As the Blog discussed, and the amici explained, the Accutane trial judge applied a standard similar to Daubert, but the Appellate Division reversed the decision based on Rubanick. In so doing, the appellate court essentially ignored the gold standard of scientific evidence, epidemiological studies all but one which failed to “demonstrate[] a statistically significant increased risk of developing Crohn’s disease.”  In re Accutane Litigation, 451 N.J. Super. 153, 168  (App. Div. July 28, 2017).  Nonetheless, the Appellate Division allowed the plaintiffs’ experts to rely on evidence that should have been excluded as unreliable, such as animal studies, anecdotal case reports, and analogous medicines – in other words, scientifically unsound data.  Id. at 165-166.  Similarly to the Fosamax decision, this represents not only bad law and bad precedent, but also has far-reaching implications.  Pharmaceutical manufacturers and health professionals resoundingly decried the Accutane decision as one that will stifle research and development, and the practice of medicine out of the uncertainty of scientific evidence, and fear of legal reprisals.  The amici implored the New Jersey Supreme Court to adopt Daubert’s methodology to reaffirm the trial court’s role as a gatekeeper to ensure that only reliable scientific evidence informs the jury’s decision.  Again, the industry can take heart in the court’s order granting review of the Appellate Division’s abysmal decision, and hope that the New Jersey Supreme Court will allow modern scientific principles, rather than the unreliable and questionable methods, to govern expert testimony.  If that occurs, no doubt will the New Jersey high court reinstate the trial court’s ruling, and order dismissal of the more than 2000 cases for lack of  causation evidence.

Happy birthday, Christopher Plummer.   The great Canadian actor turns 88 today, and seems as vibrant as ever.  What a marvelous career Plummer has had.  He is a preeminent Shakespearean actor.  We saw him play Iago to James Earl Jones’s Othello on Broadway 35 years ago.  Of course, most people remember Plummer as Captain Von Trapp in The Sound of Music (1965), a film for which Plummer reserves enormous contempt, referring to it (if at all) as “The Sound of Mucus.” Much more recently, we enjoyed Plummer’s flinty interpretation of Ebenezer Scrooge in The Man Who Invented Christmas.  And there has been abundant publicity over Plummer’s replacement of Kevin Spacey in House of Cards.  It seems a thankless task to succeed someone in such scandalous circumstances.  But we’ll thank Plummer, if only because he supplied a (strained) segue into today’s post, which is about successor liability.

 

More specifically, we have a pro-defense decision on successor liability with respect to a bankrupt medical device manufacturer. The court holds that there is no liability for design and manufacturing claims under either NY or PA law – including PA’s peculiar product line liability theory. The court concludes as a matter of law that product line liability applies only to manufacturers, not to distributors. But there is a fly in the ointment: the court’s conclusion on the failure to warn claim is rather muddled – to the point where that cause of action is not concluded at all.

 

In Deluca v. Portland Orthopaedics Ltd., et al., 2017 U.S. Dist. LEXIS 198962 (E.D.N.Y. Dec. 2, 2017), a husband and wife sued for injuries relating to a failed hip implant. The husband and wife lived in New York. That is where the 2009 implant operation took place. That is also where the injury – the 2012 failure of the implant – took place. The implant was manufactured by Portland, an Australian company that had entered into receivership shortly before the plaintiff’s implant operation and that had sold off its assets before the implant failed three years later. The plaintiffs sued Portland, as well as the Singapore successor company and its manufacturing and distributing affiliates, which were incorporated in Pennsylvania (not something we’d ever recommend doing). The complaint included claims for strict liability (failure to warn, manufacturing defect, and design defect), negligence, and breach of warranty – the usual. Portland never appeared on the case and was dismissed. One presumes it would be judgment-proof. The remaining defendants moved for summary judgment, and their arguments centered around successor liability – or, to be precise, absence of successor liability. The court sensibly held that New York law governs because that is where the injury occurred, but the court also treats us to an analysis under Pennsylvania law, where it arrives at the same destination, albeit via a slightly more complicated route.

 

The successor corporation purchased certain assets of Portland. There was no purchase of stock or any formal merger. Under those circumstances, the successor typically does not acquire prior tort liabilities. That is the law in both New York and Pennsylvania. There are some exceptions to this general rule, but none applies here.

 

New York recognizes four possible exceptions, none of which saved the plaintiffs’ design or manufacturing defect claims:

 

First, the successor did not expressly or impliedly assume prior liabilities. In fact, those liabilities were expressly excluded.

Second, the de facto merger exception does not apply. There was no continuity of ownership, management, or physical locations. In addition, the seller continued to exist, even if only in gossamer form.

Third, the “mere continuation” exception does not apply. Again, the seller lingered, and there was no hint of overlapping owners or managers.

Fourth, there is no evidence that the asset sale was a fraudulent effort to evade liability.

 

Pennsylvania adds another factor – whether the transfer was made without adequate consideration and without provisions for creditors of the selling corporation. That factor also does not apply here. More significantly, or problematically, some Pennsylvania courts have announced a “product line” exception, an extreme pro-plaintiff doctrine left over from the 1980s. The Deluca court is not persuaded that this exception has been endorsed by the Pennsylvania Supreme Court. And remember that the Deluca court has chosen New York law to govern this case. Nevertheless, just in case some appellate court might get dodgy, the Deluca court goes through the motions of measuring the evidence in the case against the product line exception and concludes that it does not help the plaintiffs here. The factors animating the product line exception are pretty fuzzy: (1) whether the purchase of the product line caused the “virtual destruction of the plaintiff’s remedies against the original manufacturer,” (2) does the successor have the ability to assume the original manufacturer’s “risk-spreading role,” and (3) the fairness of requiring the successor to assume responsibility insofar as the successor was enjoying the original manufacturer’s good will.

 

The Deluca court easily dispensed with these factors by pointing to some important facts:

 

  1. Portland’s insolvency preceded the asset sale, and was certainly not caused by it.
  2. The asset sale was not prompted by any scheme to evade product liability claims. At the time of the sale, the problem of implant failures was not on the radar screen.
  3. The purchase agreement explicitly excluded goodwill as well as related liabilities.

 

Further, the Deluca court held that the product line exception could not be used against the defendants who were never involved in manufacturing. Thus, even if someone wanted to shape the gooey product line factors so as to preserve claims against a successor, the distributor defendants would still be off the hook.

 

The plaintiffs requested additional discovery on the successor liability question. The Deluca court refused that request on both procedural and substantive grounds. The procedural problem for the plaintiffs was that they failed to submit a Rule 56(d) affidavit documenting what discovery would be sought and why it wasn’t obtained earlier. The substantive ground was futility. Even from the face of the plaintiff’s’ arguments, it was clear to the court that the request was a mere fishing expedition, with no justification for the delay and no expectation that anything reeled in would make a difference.

 

So far so good for the defense. But the court also kept the failure to warn claim alive, at least for now. New York law recognizes that successor corporations sometimes have an independent duty to warn. That duty arises not from succession of the prior manufacturer’s duties, but from the successors’ relationship with customers. Here, the plaintiffs alleged that a sales representative working for one of the defendants was in a position to provide additional warnings to the treating doctor. We do not know what those warnings would be, and are not sure how they would fit into the chronology of the case. The defendants pointed to the Instructions for Use as containing ample warnings. The Deluca court responded that it is unclear whether the physician received the IFU or whether the warnings were in fact adequate.

 

To our eyes, those questions should not be enough to stave off summary judgment. How could the doctor not have access to the IFU? Is there any suggestion that the defendants did something to make the IFU unavailable? Seems unlikely. How is the adequacy of the warning not an issue of law? And is there any open issue of warning causation? That is, did the plaintiffs proffer any evidence that a different warning – whatever that might be – would have changed the doctor’s mind in such a way as to avoid the alleged injury? On these points, the court’s reasoning is full of holes.  We suspect that the plaintiffs will ultimately be unable to fill those holes with evidence.  Then the defendants will be in a position to borrow a title from the Bard: all’s well that ends well.

 

We have a guest post today, from Luther Munford of Butler Snow.  He’s been doing some thinking about how something analogous to the “two schools of thought” medical malpractice doctrine should apply to medical product liability cases.  As always with out guest posts, our posters deserve 100% of the credit, and any blame, for their posts.

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When the law addresses medical judgment directly, it allows room for reasonable physician choice.  It is ironic then, that a product liability suit over design defect may not allow any such room.  In order to protect physician choice, courts need to resist the temptation to turn product liability disputes into a contest in which reasonable physician choice has no place.

In medical malpractice litigation, where the standard of care is directly in issue, there is room for diversity of opinion.  The jury focuses on the doctor’s choices.  And if, in the light of a diversity of medical opinion, the doctor’s conduct was reasonable, there is no liability.  Steven. E. Pegalis, 1 Am. Law Med. Malp. § 3:3 (2017) (“reasonably applicable alternative methods of diagnosis or treatment” allowed).  As it is phrased in Pennsylvania, if there are “two schools of thought,” the doctor is free to pick one over the other.  Jones v. Chidester, 610 A.2d 964, 969 (Pa. 1992) (“school of thought” means “a considerable number of recognized and respected professionals”).  See also Velazquez ex rel. Velazquez v. Portadin, 751 A.2d 102, 107-108 (N.J. 2000) (allowing practice with “substantial support as proper practice by the medical profession”) (quoting Schueler v. Strelinger, 204 A.2d 577, 585 (N.J. 1964)).

But in a product liability case over defective design, there may be no room for reasonable choice.  Design defect law may ask a jury whether there is any “safer alternative” to a defendant’s device, and, if the jury believes there is, the defendant’s device may be found defective and presumably unsuitable for sale to anyone.  In fact, this question can arise whether or not there is a specific “safer alternative design” requirement in state law because the plaintiff may simply offer such a design as evidence of unreasonable risk. In answering the question, the jury will be asked to choose which expert witness is “most credible” without any allowance for reasonable differences of opinion.

If the law is going to protect a doctor’s ability to exercise reasonable medical judgment in choosing among available devices and surgeries, the question is what needs to be done to keep the unsuitable instrument of design defect litigation – where the doctor may not even be a witness and there is no pre-suit screening panel — from taking away those choices.  Only if the doctor has a choice can the doctor have the ability to determine the best method of treating the patient.

There are at least five ways design defect law can be shaped to protect doctor choice.

First, there is the question of actual doctor choice.  Where the surgeon has chosen not to employ an alternative, perhaps because of the surgeon’s education, training and experience, the jury should not be allowed to find the manufacturer liable because a choice the surgeon rejected might be deemed by the jury to be  “safer.”  See Anderson v. PA Radocy & Sons, Inc., 865 F. Supp. 522, 531 (N.D. Ind. 1994) (manufacturer not liable for employer’s decision to purchase uninsulated fiberglass bucket rather than insulated one); James. A. Henderson & Aaron. D. Twerski, Optional Safety Devices: Delegating Product Design Responsibility to the Market, 45 Ariz. St. L.J. 1399, 1417 (2013) (delegation to learned intermediary defeats design liability).

Second, a court should apply established product liability law principles and exclude from any list of “safer alternatives” those alternatives that present different advantages and disadvantages that require doctor choice, such as a different treatment or different surgery.

This is consistent with the way product liability generally protects consumer choice.  It is generally accepted that, to be a “safer alternative design,” the design must be for the same product, not a different one.  A different product may be safer in one respect, but if it serves different distinct purposes, it cannot provide a basis for finding the less safe product defective.  Informed consumers remain free to choose, and manufacturers are allowed to innovate.  The issue comes up in a variety of product liability contexts.

For example, the Fourth Circuit held in an early negligence case that, given the “peculiar purposes of [the] design” of a Volkswagen bus to provide room for passengers and cargo by placing the driver in front of the engine, a plaintiff could not argue that the design was unsafe because it was not as crashworthy as that of a passenger sedan.  The court granted judgment as a matter of law for the defendant.  Dreisonstok v. Volkswagenwerk, A.G., 489 F.2d 1066, 1074 (4th Cir. 1974), followed in Restatement (Third) of Torts: Product Liability § 2, cmt. f, illus. 9 (1998).  Similarly, a safer bullet proof vest does not make a bullet proof vest with less coverage unreasonably dangerous when the vest allows a greater range of motion.  Linegar v. Armour of Am., Inc., 909 F.2d 1150, 1154 (8th Cir. 1990); see also Hosford v. BRK Brands, Inc., 223 So.3d 199, 208 (Ala. 2016) (smoke alarm not defective just because a more expensive dual-sensor alarm was sold).

This principle is particularly apt in the field of medical devices where different products offer different sets of benefits and complications and whose “safety” depends on professional judgment and, in the case of devices, surgical skill.  Like the learned intermediary doctrine, device defect law should recognize that the doctor relies not only on what the manufacturer has supplied, but also “other medical literature, and any other source available to him, and … the personal medical history of his patient.”  Lebowitz v. Ortho Pharmaceutical Corp, 307 A.2d 449, 457 (Pa. Super. 1973).  The Texas Court of Appeals so held in a hormone therapy case:

[A] plaintiff cannot prove that a safer alternative design exists by pointing to a substantially different product, even when the other product has the same general purpose as the allegedly defective product . . .  Thus, a safer alternative design must be one for the product at issue . . . [Plaintiff] does not explain how [the drug] could have been modified or improved . . .  In essence, [plaintiff] argues that the [drug] should have been a different product . . .  But, as the supreme court has explained, Texas law does not recognize this sort of categorical attack on a product.

Brockert v. Wyeth Pharm., Inc., 287 S.W.3d 760, 770-71 (Tex. App. 2009). See also In re Propulsid Prod. Liab. Litig., No. MDL 1355, 2003 WL 367739, at *3-4 (E.D. La. Feb. 18, 2003) (alternative or different methods of treatment insufficient to prove alternative design).

In medical device cases, courts have held that different devices which perform in different ways cannot be treated as safer alternatives. The principal authorities come from the pedicle screw cases where the courts refused to accept other fixation devices, such as those involving hooks and wires, as presenting safer alternative designs.  The Fifth Circuit explicitly gave doctor choice as a primary reason for its holding.  It said:

[Plaintiff] therefore argues that other products that do not use pedicle screws should be considered as alternative designs . . .  Underlying this argument is the assumption that all pedicle screws are defective and there can be no system using pedicle screws that would be an acceptable product.  The problem with this argument is that it really takes issue with the choice of treatment made by [plaintiff’s] physician, not with a specific fault of the pedicle screw sold by [defendant].

Theriot v. Danek Med., Inc., 168 F.3d 253, 255 (5th Cir. 1999).

Similarly, in other device cases it has been held that a treatment that uses no device at all cannot be considered as a safer alternative.  As the United States District Court for the District of Nevada explained:

Neither is the Court swayed by Plaintiff’s argument that the testimony of [the expert] to the effect that Plaintiff’s [surgery] could have been accomplished without use of [the product].  The fact that an alternative method of [surgery] was potentially available does not support Plaintiff’s design defect claim.  As argued by Defendants, non-mesh repair is not an alternative design and does not meet Plaintiff’s burden to support this particular claim.

Schmidt v. C.R. Bard, Inc., No. 2:11-CV-00978-PMP, 2013 WL 3802804, at *2 (D. Nev. July 22, 2013).

While this rule would have its most direct application in states with a safer alternative design requirement, it would not be limited to those states.  It should apply wherever alternative design is used as a basis for declaring a device unreasonably dangerous.  In Driesenstock, the Fourth Circuit’s Volkswagen bus case, the issue was whether the alternative could be used to prove the defendant’s negligence.  And in Linegar, the Eighth Circuit’s bullet-proof vest case, the question was whether the vest was unreasonably dangerous.  In neither case was there a specific safer alternative design requirement.  See James Beck (“Bexis”), On Alternative Design, Take Two – Negligence, Drug and Device Law Blog (Feb. 27, 2017) (use of alternative design in negligence cases).

[Editorial note:  The Massachusetts Niedner decision (discussed here) is also an excellent example of this application]

Third, even where the products might be very similar, the jury should not be asked to choose between two products where either one is supported by a “school of thought” or “substantial medical opinion.”  From the “doctor’s choice” perspective, it is error for a court to intervene in the diagnosis and treatment of a patient in order to dictate the treatment of a patient when reasonable medical professionals could disagree.  For example, one court recognized the “same product” requirement but nevertheless said a jury could find that an alternative was safer if it did not alter “a fundamental and necessary characteristic of the product.”  Hines v. Wyeth, No. CIV. A. 2:04-0690, 2011 WL 1990496, at *8 (S.D.W. Va. May 23, 2011) (citing Torkie-Tork v. Wyeth, 739 F. Supp. 2d 895, 900 (E.D. Va. 2010)).  In that case the court said it was for the jury to decide whether natural progestin and synthetic progestin were different products. Id. at *9.  But if either choice would be within the doctor’s standard of care, that difference should not matter.

Fourth, the principle of reasonable doctor choice could also be used to interpret comment k to the Restatement (Second) of Torts §402A.  That comment rules out design defect liability for medical products if a proper warning is given and the device is “unavoidably unsafe.”  This has sometimes been incorrectly said to simply import a risk-utility test.  Mullins v. Ethicon, Inc., 117 F. Supp. 3d 810, 818-819 (S.D.W. Va. 2015).  But a better reading would be to say that a medical product is “unavoidably unsafe” and so qualifies for comment k protection if its use, within the professional standard of care, presents a risk of injury to the patient.  That would, for example, be true of nearly all implantable medical devices. See James Beck (Bexis), Unavoidably Unsafe PMA Medical Devices, Drug and Device Law Blog (Nov. 30, 2017).

Finally, the principle of doctor choice might be a basis for excluding from evidence actions of the federal Food and Drug Administration based on a comparison of one treatment to another if both treatments were considered to be within the doctors’ standard of care.  Congress has told the FDA that it is not to “limit or interfere with the authority of a health care practitioner to prescribe or administer any legally marketed device to a patient….”  21 U.S.C. § 396 (2009).  Nevertheless, the FDA does take regulatory actions based not on independent judgments about safety and effectiveness but rather upon comparisons among methods of treatment.  A negative comparison that failed to recognize reasonable doctor choice should be just as inadmissible as expert testimony that failed to apply the correct liability standard.  See, e.g., United States v. Wintermute, 443 F.3d 993, 1001 (8th Cir. 2006).

If the principle of doctor choice were applied in design defect law, it would be necessary to decide what theories of design defect liability would survive.  Certainly a device not considered to be within the standard of care would face liability if it were so egregiously dangerous as not to have any justifiable therapeutic use.  Or if scientific testing proved a way to design the same product so that it was both safer and equally effective, that might be considered in some jurisdictions.

And none of this would directly affect liability for failure to warn, because any rule that rests on doctor’s choice has to assume that doctors are aware of the complications that may arise out of use of the device.

A lot of us attended the annual ACI Drug & Medical Device Litigation Conference in New York City last week.  One of the messages sent loud and clear from the initial client round table panel is that our clients don’t like surprises, and it is helpful to them to know information about potential litigation possibilities (read:  threats), even if they are not current targets.

So that’s what we’re doing here today – about a topic that wasn’t even the topic of a separate presentation at this year’s ACI Conference. That threat is innovator liability.  For those of you not familiar with litigation jargon, this is the term that litigators, particularly those on our side of the “v.,” use for plaintiff-side litigation theories seeking to hold manufacturers of branded drug products liable for injuries caused by competing generic products that our clients didn’t make.

Yes, innovator liability is an inherently absurd theory that contravenes the most foundational principle of strict liability – that the manufacturer of a defective product should be responsible for injuries caused by that product.  That’s why innovator liability is usually brought on a misrepresentation/fraud theory, rather than under “traditional” product liability theories.  Because branded manufacturers are required by federal law to allow generic products to take (for free) their labels and use them verbatim, innovator liability theories posit that it is “foreseeable” that “fraud” or “misrepresentation” purportedly occurring with respect to branded labels could lead physicians to prescribe generic drugs bearing the same labeling at some unknown future date.  It also lets the actual manufacturer of the allegedly “defective” product that actually caused harm off the hook, even though the manufacturer controls everything else about how the product is manufactured and promoted.

Since 90% or so of the current prescription drug market is generic, innovator liability is a very dangerous – indeed existential – threat to the branded drug industry.  Potentially 10% of the prescription drug market share would be forced to shoulder 100% of possible liability, not only with that additional liability bailing out current business competitors, but also being effectively uninsurable because it does not arise from a defendant’s own products and is potentially unlimited in both amount and time.

Plaintiffs pursue innovator liability currently for one reason only – the deterrent effect of preemption on claims brought against the manufacturers of generic products.  Such preemption is now likely to continue in full effect for the foreseeable future, with the FDA’s regulatory attempt to change the rules to eliminate generic preemption now effectively over, and with the threat of additional appointments of anti-preemption Supreme Court justices very likely minimal as well, for the time being.

Innovator liability was not even a separate topic at this year’s ACI conference.  With good reason.  As detailed in our innovator liability scorecard and in our 50 state survey, the defense side has been winning the overwhelming majority of the decisions that have addressed such theories.

Here’s the big however.

Most of this litigation so far has been decided in federal court, and in federal court, with jurisdiction based on diversity of citizenship, the Erie principle favoring conservative applications of state law over radical changes has worked strongly to the defense’s advantage in federal cases.  No federal circuit court has ever recognized innovator liability, and given the state of Illinois law (see our 50 state survey), we don’t see the Seventh Circuit becoming the first.

No, the problem is with state courts of last resort, which are not constrained by Erie.  So far there have been two high court decisions on innovator liability – and our side’s success rate there is only 50%.  We lost in Wyeth, Inc. v. Weeks, 159 So.3d 649, 656-76 (Ala. 2014).  Weeks was overturned by the legislature almost before the ink was dry, so it looks like a hiccup, but we have to wonder, if it could happen in Alabama, could it happen anywhere?  The answer was “no” in Iowa, the only other high court decision so far. See Huck v. Wyeth, Inc., 850 N.W.2d 353, 369-81 (Iowa 2014).  Huck, however, was actually a 4-4 split decision that operated as an affirmance only because the defendant had won below, and the Huck justices who saw things our way did so in part (how much a part is unclear) because of the pendency of the FDA’s now-dead rule on generic labeling.  Id. at 380-81 (“the FDA’s proposed rule . . . would abrogate the Mensing holding, permitting consumers of generic drugs to bring a claim against generic manufacturers”).

Plaintiffs are aware of this.  We’re not giving anything away here.  They have thus been trying to move the innovator liability theater of litigation operations to state-court appeals for years.  And they have finally been able to do so.  Right now, the issue is pending in three high courts:  California, T.H. v. Novartis Pharmaceuticals Corp., 199 Cal. Rptr.3d 768, 774-82 (Cal. App. 2016), review granted & depublished, 371 P.3d 241 (Cal. June 8, 2016) (discussed here); Massachusetts, Rafferty v. Merck & Co., 33 Mass. L. Rptr. 464, 2016 WL 3064255, at *5-7 (Mass. Super. May 23, 2016) (discussed here), appeal granted, No. SJC-12347 (Mass. 2017); and West Virginia, McNair v. Johnson & Johnson, 694 Fed. Appx. 115, 120 (4th Cir. 2017) (discussed here), certified question accepted, No. 17-0519 (W. Va. Sept. 1, 2017).

The California and Massachusetts appeals have been argued, and we wish we had better news to report.  As we discussed, the California argument was mostly about the “perpetual liability” aspects of the case (that the defendant branded company had left the market years before the plaintiff was exposed to a generic product), so there is a distinct possibility that the California Supreme Court will either bypass the basic innovator liability question or worse allow it.  In Massachusetts – another notoriously liberal tort jurisdiction – too many members of the Supreme Judicial Court for our liking were asking questions about under what conditions (such as scienter) innovator liability could be permitted.  The West Virginia Supreme Court of Appeals is not as radically pro-plaintiff as it was back when it rejected the learned intermediary rule, see Johnson & Johnson v. Karl, 647 S.E.2d 899 (W. Va. 2007).  However, one judge remains from the Karl majority, and the situation of generic drug using plaintiffs without anyone they can sue is certainly present.  After all, if it could happen in Alabama, it could happen anywhere.

So what happens if the tide starts to turn in 2018 on innovator liability?  It certainly could, and because of the magnitude of the potential threat, we can’t ignore it.  As stated at ACI, our clients don’t like surprises, particularly surprise threats, so we’re letting you know that from our perspective, the threat is real.  Moreover, particularly in California and Massachusetts, we can’t expect a legislative fix of the sort that came through in Alabama.

And if state high courts start what the other side could argue to be a “trend,” what does that do to the current monolith of federal court decisions?

So what’s Plan B?

Congress appears right well paralyzed on any issue like this.  Aside from cutting their donors’ taxes, we don’t expect much there.

That leaves the FDA.  Could it be persuaded to issue a regulation preempting innovator liability?  There is that 1962 uncodified “direct conflict” preemption clause, and a lot of FDA statements about how its regulatory scheme is not supposed to change the standards of common-law liability.  That is one plausible outcome, but plaintiffs would be active, too, demanding an end to preemption of generic products.  Does a regulatory fix for innovator liability thus degenerate into a three-way fight between branded, generic, and plaintiffs?  That’s a recipe for paralysis, as well.

How does one litigate an innovator liability case?  Unlike a product liability case, the defendant isn’t a manufacturer, so it doesn’t have access to design, manufacturing, warning, and adverse report information about the product that actually caused (allegedly) the plaintiff’s harm.  At minimum that’s a serious discovery problem.  Will the solution be joining generic drug manufacturers as third-party defendants?  That would be a fine finger-pointing mess, and what would the consequences be for preemption?  Even the DDLaw Blog might be forced to take sides, which for eleven years we have been able to avoid doing.  Who knows, depending on where a plaintiff chose to sue, it might be difficult under BMS to obtain personal jurisdiction over the generic manufacturer.  These are just a few of the questions that broader adoption of innovator liability would pose.

We don’t like being the ones to point out the dark clouds on the horizon.  We’d much rather celebrate defense wins – and we hope we do in T.H., Rafferty, and McNair.  But our clients don’t like surprises, and given the size of the threat posed by innovator liability, we’d be remiss not to point out what we know/fear is out there.  After all, innovator liability is not even on the ACI’s own agenda (although it was mentioned) this year.  So a word to the wise.  Don’t be caught napping.  Think about Plan B.

Those of us who practice in the mass tort space spend vast portions of our professional lives dealing with our opponents’ experts. In our minds, we seek only to enforce the dictates of the Federal Rules and of the United States Supreme Court (and their esteemed state counterparts); to wit, to ensure that experts are  qualified to render the opinions they offer and that they arrived at those opinions through reliable methodologies.  But, so very often, we face the fact that experts can say virtually anything they want with impunity (and most often without even being excluded).  We say “virtually” because we learned today, with horror (and, we confess, with some amusement), that even this regrettable reality has its limits.

Today’s case, Ruehl v. S.N.M. Enterprises, 2017 WL 5749560 (M.D. Pa. Nov. 28, 2017), is not a drug or device case.  It is a slip-and-fall case, but it illustrates the outer limits of a court’s tolerance for an expert’s misconduct and the consequences of straying beyond those bounds.  In Ruehl, the plaintiff’s decedent, his elderly wife, died as she attempted to pass through automated sliding glass doors into the defendant’s hotel.  The plaintiffs alleged that the sliding glass doors struck the decedent as she passed them, knocking her off balance so she fell and hit her head on concrete.  The defendant contended that the decedent simply lost her balance and fell.

The plaintiffs hired an expert who asserted that he was “a premier expert witness in the field of automated sliding glass door technology.” Ruehl, 2017 WL 5749560 at *2.   The expert’s retention agreement provided that he “retain[ed] the right to approve video deposition[s],” but, as the court noted, did not “foreshadow[] [the expert’s] curious and categorical refusal to comply with court orders, or attend video depositions.” Id. After the fact (and we’ll tell you more about what led up to this), the expert filed a declaration stating that he “generally refuse[d] to allow videotaped depositions” but “on one occasion allowed such a deposition provided that [his] face was not shown,” id. (internal punctuation omitted), a condition that “apparently stem[med] from some concern on [the expert’s] part that unknown and unnamed persons [would] digitally alter the video in ways that [would] be detrimental to [him].”  The court commented, “In nearly four decades of legal practice devoted exclusively to federal court litigation, we have never encountered such an idiosyncratic view by any lay or expert witness . . . .” Id.

But, to get back to the story, the plaintiffs’ counsel apparently learned of the expert’s opposition to being videotaped about two years into the litigation, after they had paid the expert more than $20,000 for his services. Some months later, the defendant scheduled a videotaped deposition of the expert, which, as the court emphasized, “they were entitled to do under the Federal Rules of Civil Procedure.” Id. at *3.   The expert demanded from the defendant, and accepted, a $3,050 prepayment of his fee for the deposition, while simultaneously notifying the plaintiffs’ attorneys that he would not voluntarily agree to participate in the deposition.

The plaintiffs’ attorneys moved for a protective order and “vigorously advocate[ed] on [the expert’s] behalf.” Id. at *3.  But the court reached the obvious conclusion, denying the protective order and ordering the expert to sit for a videotaped deposition.  And the court limited use of the deposition to the litigation, thereby (lol) “address[ing] [the expert’s] odd and speculative concern that his words and visage would be digitally altered by unknown sinister actors . . . .” Id.

As the court explained, the order gave the expert the choice among complying with the order, seeking timely reconsideration of it, or initiating motion practice (for a protective order or to quash the deposition subpoena) through an attorney of his own. “The one thing he could not do, however, was to engage in some unilateral, passive-aggressive course in which he ostensibly agreed to schedule a deposition, while privately evading his basic obligation owed by all witnesses by failing to appear for that deposition.  Yet that is precisely the path that [he] chose.” Id.

First, according to “testimony and contemporaneous notes of plaintiffs’ counsel,” when the expert was informed that the court had denied the protective order, he responded, “I don’t care about you or [the decedent] or some a****** judge.” Id. And, when the plaintiffs’ counsel implored the expert to cooperate because the family of the decedent was counting on his testimony, he replied, “Nothing will bring her back, so I don’t give a s***.” Id. But “at the same time that [the expert] was presenting his refusal to participate in the videotaped deposition in profane terms as some matter of principle, he was also willing to forego that principle for a price.” Id. at *4.  Specifically, as the expert admitted, he told the plaintiffs’ counsel that he would sit for the deposition if they provided him with a $10,000,000 Lloyds of London indemnity bond.  “Plaintiffs’ counsel understandably discounted this bizarre and extortionate suggestion.” Id.

Simultaneously, and in spite of all of this, the expert’s office manager – also his wife – was making scheduling arrangements for the deposition, on a date and at a location that the expert specifically approved.   Deposition time arrived, and – wait for it – the expert didn’t show up.  Ultimately, the plaintiffs were “compelled to negotiate a settlement of [the] lawsuit from a highly disadvantageous position,” since their expert had abandoned them. Id. The defendant moved for sanctions, and the plaintiffs ended up joining the motion.  That’s right, both sides were seeking sanctions against the same expert.  The expert responded and (lol lol) filed a motion for sanctions against the plaintiffs’ law firm.

In a victory for all that is good and right – and obvious – the court granted the parties’ joint motion for sanctions and denied the expert’s cross-motion. The court found that the expert’s conduct “involved a dual dereliction of the duty of candor and cooperation that [he] owed to [the] court, as well as the duty of loyalty [he] owed to his clients who had paid him more than $20,000 and were relying on him to provide crucial expert testimony in this case.” Id, at *7.  The court concluded,

Thus, [the expert’s] pattern of misleading conduct designed to frustrate this court’s order and the discovery process, coupled with his openly voiced contumacious disdain for his responsibility to the court and his own client, is sanctionable as contempt . . . . But perhaps most egregious of all is the disservice which [the expert] did to his clients, . . . an elderly couple who had retained his services to assist them in this litigation. . . . While [the expert] may be completely indifferent to the plight he created for the [plaintiffs], we are not. Therefore, [we will impose sanctions] in an effort to assist [the expert] in locating his moral, legal and ethical compass . . . .

Id. at *8.   (Note to selves:  look for other opinions by this awesomely pithy judge.)

The court did not order the expert to repay his entire $20,000 fee, finding that such a sanction would not be “narrowly tailored, as required by law,” because the expert had provided some professional services before the episode began. But the court asked the plaintiffs’ attorneys to submit an accounting of all time and expenses broadly related to the expert’s misconduct.  In addition, the court ordered the expert to repay the defendant for deposition fees and expenses totaling almost $5,000.  Finally, and best of all, finding that “[the expert’s] conduct in the instant case may be relevant to a consideration of his continued licensure by the state and membership in [the American National Standards Institute (ANSI)],” the court ordered that a copy of the decision be forwarded “to the appropriate licensing and professional association officials for whatever action they may deem appropriate.” Id., at *9.

All in all, a horror show, and we feel sorry for all of the parties. But kudos to the judge for decisive action (and cool rhetoric), and a cautionary flag to any other expert whose sense of omnipotence may be similarly ballooning.  We’ll watch for other decisions of this ilk, and we’ll keep you posted.

This guest post is by Reed Smith‘s Matthew Jacobson.  It discusses the FDA’s recent guidance on the hot topic of 3D printing as a manufacturing practice for regulated drugs and medical devices, but not biologics (at least not yet).  As always with our guest posts the author is 100% responsible for the content.

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A lot has happened over the past 19 months, some good, some bad, and some just unbelievable. To name a few, and without sounding like a remake of We Didn’t’ Start the Fire, a total solar eclipse, a new human organ was discovered, Brexit, another royal engagement, the Patriots had the largest comeback in Super Bowl history, fourteen top-level people have “left” the presidential administration (not counting the entire Obama administration), Tim Tam’s became available in the U.S., and Bexis and I wrote the most comprehensive law review article to date on the product liability implications of 3D printing.

And as we prepare to head into 2018, the U.S. Food and Drug Administration (FDA) gave us another headline releasing its guidance for Technical Considerations for Additive Manufactured Medical Devices and issuing a statement from FDA Commissioner Scott Gottlieb M.D. on a “new era of 3D printing of medical products.”  For those daily readers, you may remember that we first reported on the guidance when it was in its draft form in May 2016—19 months ago. In that time, FDA has been evaluating comments and feedback provided by entities in the 3D printing industry. The final guidance is, as you may expect, substantively similar to its draft form. As we see it, that is good news, that the new administration’s approach on 3D printing of medical devices is the same as the old—which is rare these days.

The FDA Commissioner says the agency has reviewed more than 100 medical devices and one drug that are currently on the market, which are being manufactured by 3D printers.  He goes on to say that the “FDA is now preparing for a significant wave of new technologies” and that the FDA is “working to provide a more comprehensive regulatory pathway that keeps pace with those advances, and helps facilitate efficient access to safe and effective innovations that are based on these technologies.”  That regulatory framework will need to adjust how “existing laws and regulations that govern device manufacturing [apply] to non-traditional manufacturers like medical facilities and academic institutions that create 3D-printed personalized devices for specific patients they are treating”—in other words, point of treatment device fabrication.  The FDA is also researching the technology itself, has its own 3D printing labs and is providing opportunities for “innovative approaches to pharmaceutical product design or manufacturing, including additive manufacturing of pharmaceuticals.”  In fact, according to the statement “[m]ore than a dozen pharmaceutical manufacturers have formally or informally been in contact with [the FDA’s Center for Drug Evaluation and Research] regarding the use of 3D printing to manufacture drugs.”

The guidance, according to the FDA, is intended to provide FDA’s thoughts on 3D printing and is meant to evolve as the technology grows.  As was its draft version, it is still split up into two categories of considerations: 1) design and manufacturing and 2) device testing.  Both sections overlap in substance, and the device testing section in particular provides strong, detailed recommendations for what a device manufacturer should include in a premarket submission for a device that uses additive manufacturing as a manufacturing technique.

Some noteworthy additions to the draft guidance (we are not repeating what we said then) that us non-technical folks noticed in the latest guidance are:

    • The final guidance adds that patient-matched devices (devices that are based on or “matched” to a specific patient’s anatomy, usually based on medical imaging data) are especially vulnerable to file conversion errors because “anatomic curves are typically geometrically or mathematically complex, which can create difficulties when calculating conversions.”
    • The guidance also adds a section on cybersecurity and privacy related to protecting personally identifiable information and protected health information, which can be an issue for patient-matched devices.
    • Establishing control limits to make sure that a product meets all predetermined requirements when it is “printed.”
    • Pointing out that use of workflow that automates one or more software steps should be considered.
    • Adding to the “Material Controls” section materials of animal origin and composite materials

For the most part it appears the guidance’s changes, some of which we noted above, focused on the different types of 3D printers that are available and each printer’s unique characteristics, which may vary from brand to brand and with the type of material used. The guidance also seems to focus more on providing examples rather than trying to be all inclusive, which will allow for the technology to develop, without the need for the guidance to be updated.

We have been waiting a while for this final guidance to be released. Unfortunately, we may have to wait even longer for the FDA to release a guidance on the truly novel medical devices, which are 3D printed with biomaterials, such as stem-cells.  Dr. Gottlieb says that the FDA “envision[s] that burn patients in the near future will be treated with their own new skin cells that are 3D printed directly onto their burn wounds” and “the potential for this same technology to eventually be used to develop replacement organs.”  However, based on the timing of the FDA’s past communications with 3D printing, it may be longer than 19 months this time. Who knows, by then we may be dealing with the FDA’s position on 3D printing under the Rock’s presidency.

The defendants in the Eliquis MDL have turned somewhat of a preemption hat trick. The latest order is In re Eliquis (Apixaban) Prods. Liab. Litig., No 17-md-2754 (S.D.N.Y. Nov. 29, 2017), where the district court dismissed twenty-four cases newly transferred into that MDL.  We will explain why in a moment, but first a little background.  The defendants scored their first goal in a case called Utts—which resulted in pair of orders (one before the MDL was formed and one after) ruling that federal law impliedly preempted the plaintiffs’ failure-to-warn and design defect claims.  These were important orders.  As we explained in detail here, the district court very clearly explicated the three Supreme Court opinions that mainly shape implied preemption in the prescription drug space—Wyeth v. Levine, Mensing, and Bartlett.

We all understand that Wyeth v. Levine opened the anti-preemption door by recognizing that an innovator drug manufacturer could sometimes change its label without the FDA’s pre-approval through the Changed Being Effected (or “CBE”) process.  Because that allowed the manufacturer, under some circumstances, to change its label to accommodate state law without running afoul of federal law, implied preemption did not necessarily apply.  Then came Mensing, which held that federal law impliedly preempted failure-to-warn claims against generic drug manufactures because generic manufacturers cannot use the CBE process, and therefore cannot change their labels without pre-approval.  That leaves generic manufacturers between a federal rock and a state-law hard place, which equals preemption.

Finally, Bartlett.  There, the Supreme Court held that federal law impliedly preempted state-law design defect claims for similar reasons, i.e., a generic drug manufacturer cannot change a drug’s design without pre-approval either, thus again triggering implied preemption.  We have said multiple times in this space that Bartlett’s rationale is not limited to generic manufacturers because an innovator drug manufacturer also cannot change its product’s design without pre-approval.

That is where Utts came in.  Although dealing with an innovator drug, the district court applied Bartlett to dismiss the design defect claims.  In the part that we like the most, the court also applied Wyeth and Mensing to dismiss the warnings claims because the plaintiffs did not present any “newly acquired information.”  Because “newly acquired information” is required to invoke the CBE process, the defendants could not change the Eliquis label without federal pre-approval.  Under those circumstances, a state-law tort claim would conflict with federal law, thus preemption.  The district court granted the plaintiffs leave to amend, but they again failed to plead any “newly acquired information.”  Moreover, because the labeling already warned stridently about the risk at issue (bleeding) the warnings were adequate as a matter of law, too.  Case dismissed without leave, as we explained here.

The defendants scored their second goal when the district court applied Utts to other cases in the MDL.  The order that caught our eye was Fortner, which we covered here.  In Fortner, other plaintiffs attempted to plead state-law claims that were not preempted.  But try as they might, these plaintiffs also could not plead any “newly acquired information.”  The CBE process there was still unavailable; the defendants still could not alter the labeling without pre-approval; and federal law still preempted their claims.  And, by the way, the warnings were still adequate as a matter of state law.  (Careful readers have figured out by now that we have oversimplified these orders for brevity, but you get the idea.  You can read our prior posts here, here, and here to get the gory details.)

Which brings us to the defendants’ third goal scored—application of Utts to cases newly transferred into the Eliquis MDL.  To start, we admire the district court’s process.  The district court used Utts as a vehicle to decide preemption in the first instance, and once it set the rules, it ordered any plaintiff assigned or transferred to the MDL to show cause within 14 days why his or her case should not be dismissed.  Slip op. at 2.

These twenty-four plaintiffs, newly transferred from the District of Delaware, complied with the court’s order and made three arguments, none of them successful. They argued first that Utts did not apply because they omitted from their amended complaints some of the material that appeared in the Utts amended complaint.  Slip op. at 4.  In other words, their claims should survive because they were more vague and less complete in asserting their claims.

The plaintiffs in Fortner tried this tactic too—we’ll call it pleading by obfuscation.  But it did not work there, and it did not work here either:  “Even without reference to the documents on which the amended complaint in Utts relied, the complaints ‘simply do[ ] not provide sufficient factual content to support a plausible inference that there exists newly acquired information such that the defendants could unilaterally have changed the Eliquis label to include additional warnings.’”  Slip op. at 5 (quoting Fortner).

Plaintiffs also argued that the warnings were inadequate under their various states’ laws, but they did not explain why. Nor did they “even cite the statutes or case law that pertain to the adequacy of a label’s warnings for any jurisdiction.”  Slip op. at 5.  Thus, “[i]n the absence of citation to any authority, it is unnecessary to address the argument further.”  Slip op at 5.  Finally, the plaintiffs asked to be remanded to the District of Delaware.  That’s right.  If you can’t win, get out of Dodge.  But they again failed to “explain a basis” for granting that relief.

We mused in our last post on Eliquis that this MDL may not last long, and we seem to have been correct. Moreover, given the sound basis for the district court’s preemption rulings, we doubt the plaintiffs will do any better elsewhere.

Today Time Magazine announces its Person of the Year.  The publisher called us a week or so ago to say we were PROBABLY going to be named Man (Person) (Blog) of the Year, but we would have to agree to an interview and a major photo shoot.  We said “probably” is no good and took a pass. Thanks anyway!

[None of that actually happened.  You might even call it fake news.]

Still, we can see why this blog would receive a major award for its literary achievements.  We admit that we are not quite on the same level as, say, James Joyce’s Ulysses, which 84 years ago on this date was found by an SDNY judge not to be obscene.  We also must ruefully acknowledge that our case analyses are not as funny and transgressive as Lolita, which Vladimir Nabokov completed 64 years ago on this date.  But we have occasionally encountered preemption issues as mystifying as Ulysses and plaintiff pseudo-experts who made the unhinged Humbert Humbert character in Lolita seem rational.

If there is a product liability issue that lends itself to literary invention, it is the issue of warnings.  All that even a minimally creative plaintiff lawyer needs to do is parse an existing warning, then dream up some specification or adjective that would frighten doctors or patients just a tiny bit more.  Stephen King is a fine writer, and odds are that he could do a splendid job of boosting terror in both warning labels and failure to warn claims. Of course, let’s remember that we are talking about fiction.

It is not fictional that there are many assorted asinine warning labels out there based on fear of lawsuits.  A hairdryer bears a warning against use by folks “while sleeping.” A tag on an iron helpfully advises against ironing clothes while worn on the body.  A bag of peanuts cautions us that the product … contains nuts.  The instructions for a chainsaw counsel against trying to stop the chain with one’s hands. An over-the-counter bottle of sleeping pills lists possible side effects, including … drowsiness.

There is more than a little fiction at work in the failure to warn claim in Cerveny v. Aventis, Inc., 2017 U.S. Dist. LEXIS 197194 (D. Utah Nov. 29, 2017).  You may remember the name Cerveny.  This litigation has already produced one of the best decisions of 2017.  The crux of this latest Cerveny decision was the fiction that the plaintiffs’ proposed warning would pertain to the plaintiffs. The court ultimately arrives at a sensible ruling on inapplicability of a warning about a risk to a population group that did not contain the plaintiffs.  The court also makes clear that in fraud/negligent misrepresentation claims, a contraindication is not intended to induce reliance.

The plaintiffs in Cerveny were the parents and their child, who was born with certain physical defects.  The mother had taken a prescription fertility drug before pregnancy, but not during the pregnancy.  That rather obvious and fundamental temporal fact is central to the case. The FDA at one point proposed a warning of possible fetal harm when the drug is taken during pregnancy.  That warning was not on the medicine when taken by the mother in this case, and one of the claims was that it should have been.  The failure to warn claim was essentially that the future mother would not have taken the medicine before pregnancy if she knew that taking it during pregnancy could cause birth defects.

Courts all too often are all too tolerant of plaintiff failure to warn theories.  Those claims all contain a dose of speculation, but some are speculative to the point of implausibility. It might be tempting for the court to pass the question, no matter how absurd, to the jury.  Not the Cerveny court: “When a proposed warning does not apply to the plaintiff, she cannot prove defect or inadequacy.”  The Cerveny court quotes from Rivera v. Wyeth-Ayerst Labs, 283 F.3d 315, 321 (5th Cir. 2002), which rejected as “absurd,” and “too speculative to establish Article III standing” a claim based on an allegation that an “extra warning, though inapplicable to [the plaintiff] might have scared her and her doctor” from using the drug.  Cerveny and Rivera recognize that there must be a limitation to how speculative a  failure to warn theory can be, and that Article III standing must actually mean something.  Accordingly, the Cerveny plaintiffs cannot prevail on a cause of action based on a failure to warn about the risk of a medicine used during pregnancy when the use in the case was only prior to pregnancy.  That is a notable result.  We already have a post collecting opinions that likewise reject warning claims based on inapplicable risks.

There was another ground for rejecting the failure to warn claim.  The label for the drug might not have contained an express warning, but it did contain a contraindication vs. use during pregnancy.  So if that is what the plaintiffs claim needed to be said, it was said in the contraindication section, and that is enough.

What about the plaintiffs’ misrepresentation claims?  The contraindication discussed above also said that “no causative evidence of a deleterious effect” of the medicine on the human fetus had been seen. The plaintiffs contended that the “no causative evidence” language was false.  But even if that is so, the contraindication was not directed to the plaintiff, and it was not intended to induce her to take the medication.  The purpose of the contraindication was to inform doctors that their pregnant patients should not take the medicine.  The plaintiff was simply not in that category. The failure to warn theory conjured up by the plaintiff lawyers was clever and creative, but it was also wrong.