The revolution in personal jurisdiction touched off by Daimler AG v. Bauman, 134 S. Ct. 746 (2014) (“Bauman”), is in full swing. The favorable results obtained by numerous corporate defendants that have managed to “get out of Dodge” because they are not “at home” in Dodge are compiled in our Bauman cheat sheet (160 different cases, to date). The most important ones in the prescription medical product area are detailed in the posts under our personal jurisdiction topic heading. Bauman has become the most important tool we have to fight forum shopping by litigation tourist plaintiffs, since litigation tourists, as non-residents, cannot assert specific personal jurisdiction either.
Personal jurisdiction defenses, however, are waivable. They have to be pleaded and asserted at the outset of the litigation, or else the other side will argue – more persuasively, the more time that has passed – that a defendant has slept on its rights while other parties and the judicial system itself have expended valuable time and effort litigating in the plaintiffs’ forum of choice. Thus, corporate defendants have to act quickly to evaluate and raise Bauman-based jurisdictional defenses at the outset of the case. That can be difficult because, like everything in the law, lawyers have made things complicated.
Primarily to help our in-house readers (although others may find this valuable as well), we have compiled the following Bauman personal jurisdiction checklist to help corporate defendants evaluate whether a Bauman jurisdictional defense is likely to be worth raising in particular situations.
- Where are your company’s litigation hot spots? If they are not in your company’s state of incorporation or principal place of business, Bauman might be able to help cut them down considerably going forward.
- Where are any given plaintiffs from? Are they suing in their states of residence or where their claimed injuries arose? If not, then they’re litigation tourists, and Bauman might help. If your company is not sued either where it is incorporated or has its principal place of business, and the plaintiff did not sue where s/he was allegedly injured, then Bauman almost surely can help you.
- Is your company conducting a lot of business in litigation hotspots where it is neither incorporated nor has a principal place of business? If so, Bauman has definitely changed the rules of the game in the company’s favor – amount of business, by itself, no longer means that jurisdiction exists in such places.
- Do you receive multi-plaintiff complaints that try to dodge federal jurisdiction by joining dozens of plaintiffs together who have nothing in common but injury claims involving one (or more) of your products? Such complaints are usually structured to defeat federal diversity jurisdiction − only a couple of plaintiffs live where the suit is brought and a couple of others (not the same ones) are in the same state as your company? If yes, Bauman can help. We have posts that discuss exactly how to beat this kind of complaint.
- Are the courts in your litigation hot spots underfunded and overworked? Most are, and your lawyers should be able to provide details. Bauman gives these courts a way to reduce their dockets. This point is usually persuasive in jurisdictional motions.
- Is your company registered to do business in the litigation hot spots to which points 1, 2, & 3 apply? If yes, expect plaintiffs to claim that your company’s registration means that you have consented to general jurisdiction. Plaintiffs are likely to lose that argument, however, especially if that consent theory wasn’t the law in the hot spot before Bauman. We also have posts that can help on this specific issue.
- Is one plaintiff who correctly sued where s/he was allegedly injured joined with a bunch of litigation tourist plaintiffs injured elsewhere? Those other plaintiffs might try to piggyback on the one proper plaintiff by claiming something called “pendant personal jurisdiction” – something that you should argue doesn’t even exist. We have a post on that here.
- Does your company have subsidiaries or other affiliated corporations that have their principal place of business or are incorporated in the litigation hotspot? While plaintiffs will usually lose (Bauman itself rejected agency and veil piercing is hard to do), you can expect them to argue either “agency” or “piercing the corporate veil” to claim that the in-jurisdiction affiliate’s contacts should be attributed to other affiliated corporations.
- Does your company have an interactive website that generates business from your litigation hot spots? This is another point that plaintiffs might raise, but again they shouldn’t succeed in asserting Internet activity as a basis for jurisdiction over non-resident corporations after Bauman.
- Could a particular plaintiff still bring the same suit somewhere else that is more logically and logistically connected to the dispute? If yes, then a Bauman personal jurisdiction motion can be supplemented with an argument that plaintiff should be sent to the more convenient forum (“forum non conveniens”).
- Don’t know enough facts about a plaintiff’s case to answer any of the earlier questions? Early discovery, limited to such “jurisdictional” facts, is ordinarily available almost everywhere. Make sure your lawyers use it.
- Have you instructed the lawyers representing your company to preserve personal jurisdiction as a defense? If not, you should, because as we mentioned at the outset, personal jurisdiction is waivable if not pleaded and pursued right away. Bauman is not something that can go on the back burner.
- Finally, check the legal positions your company has taken when it has been a plaintiff in litigation. Did your company take any personal jurisdictional positions (especially concerning jurisdiction by consent) contrary to those it would assert in opposing jurisdiction in litigation hot spots? If so, be ready, because that’s something else plaintiffs can try to use against you.
Using the above checklist should allow in-house counsel to evaluate in a timely fashion whether a Bauman challenge to a plaintiff’s choice of jurisdiction is worth pursuing. Choice of jurisdiction is important enough that plaintiffs try all sorts of tricks to trap defendants in courtrooms of plaintiffs’ choosing. Bauman now powerfully enables the right side of the “v.” to fight back. It doesn’t eliminate all litigation hotspots – particularly ones in a corporation’s states of incorporation/principal place of business – but it has the potential to eliminate your company’s involvement in other hotspots that have, for decades, attracted non-resident plaintiffs from all over the country. We wish our in-house readers the best in their Bauman jurisdictional challenges and look forward to adding your favorable results to our cheat sheet.