We’ve been chronicling the troubles that defendants have been having in getting Pennsylvania courts to follow the Due Process requirements of personal jurisdiction since Daimler AG v. Bauman, 571 U.S. 117 (2014). We lamented that Pennsylvania seemed to be going off the deep end while discussing Webb-Benjamin, LLC v. International Rug Group, LLC, 192 A.3d 1133 (Pa. Super. 2018). Webb-Benjamin relied on a couple of federal district court opinions, Bors v. Johnson & Johnson, 208 F. Supp.3d 648 (E.D. Pa. 2016) (which we discussed here), and Gorton v. Air & Liquid Systems Corp., 303 F. Supp.3d 278, 299 (M.D. Pa. 2018), to conclude that general personal jurisdiction – which Bauman limited to the “at home” standard of principal place of business or state of incorporation – existed in Pennsylvania because a state statute (42 Pa. C.S. §5301) mandated use of a lesser standard that could be satisfied by nothing more than a foreign corporation’s registration to do business in Pennsylvania. 192 A.3d at 1138-39.
We’ve never given this statute – or the cases relying on it – much credence because it’s been pretty darn clear, at least since the Civil War, that state statutes cannot supersede the federal constitution. Courts holding otherwise must be channeling John C. Calhoun.
On the Pennsylvania state court side, things are in hiatus at the moment, because in another case, the Pennsylvania Superior Court has agreed to en banc reconsideration of this issue. See Murray v. American Lafrance, LLC, 2018 Pa. Super. Lexis 1320 (Pa. Super. Dec. 7, 2018). If the en banc court agrees with us, that would nullify Webb-Benjamin and result in the Pennsylvania state courts following Bauman (as practically every other state in the country already does).
On the federal side, however, Bors and Gorton professed to be bound by the pre-Bauman Third Circuit decision which held that “consent” is a separate jurisdictional theory from “general”/”all purpose” and “specific”/”case-linked” personal jurisdiction. That nearly thirty-year-old decision, Bane v. Netlink, Inc., 925 F.2d 637 (3d Cir. 1991), held as follows:
[Defendant’s] application for a certificate of authority can be viewed as its consent to be sued in Pennsylvania under section 5301(a)(2)(ii), which explicitly lists “consent” as a basis for assertion of jurisdiction over corporations. Consent is a traditional basis for assertion of jurisdiction long upheld as constitutional. We hold that because [defendant] was authorized to do business in Pennsylvania, it was subject to the exercise of personal jurisdiction by Pennsylvania courts under [the Pennsylvania statute].
Id. at 541 (citing Hess v. Pawloski, 274 U.S. 352, 356-57 (1927), and Dehne v. Hillman Investment Co., 110 F.2d 456, 458 (3d Cir. 1940)).
That’s it. Bane’s consent-based ruling is all of three sentences, supported by two ancient decisions pre-dating International Shoe Co. v. Washington, 326 U.S. 310 (1945). We know what Bauman had to say about that kind of precedent – “citations to these [pre-International Shoe] cases, both decided in the era dominated by Pennoyer’s territorial thinking, should not attract heavy reliance today.” 571 U.S. at 138 n.18. Heck, Bane didn’t even cite International Shoe itself.
Nonetheless, like lemmings over the cliff, Pennsylvania district court decisions have continued to follow Bane, to ignore Bauman, and thus to hold defendants subject to general jurisdiction under Pennsylvania law on nothing more than registration to business. See Shipman v. Aquatherm L.P., 2018 WL 6300478, at *2 (E.D. Pa. Nov. 28, 2018); Aetna Inc., v. Mednax, Inc., 2018 WL 5264310, at *5 (E.D. Pa. Oct. 23, 2018); Pager v. Metropolitan Edison, 2018 WL 491014, at *2 (M.D. Pa. Jan. 19, 2018); 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 (E.D. Pa. June 13, 2017).
In the most recent of these decisions, Youse v. Johnson & Johnson, 2019 WL 233884 (E.D. Pa. Jan. 16, 2019), the plaintiff did not even attempt to argue that Pennsylvania had general jurisdiction – or even the “minimum contacts” necessary to establish specific jurisdiction – over the moving defendant, a company that sold raw talc, but not in Pennsylvania. Youse didn’t care that the defendant had no factual contacts at all with Pennsylvania – as long as it filed that piece of paper decades ago, that was enough.
[C]ourts in this district have continued to apply the precedent established by the Third Circuit in Bane to hold that registration to do business in Pennsylvania constitutes consent to jurisdiction. Other judges in this district have found that under §5301, business registration constitutes consent to jurisdiction in Pennsylvania, even after [Bauman]. Without the Third Circuit overruling Bane or distinguishing [Bauman], we follow these decisions and conclude that registration to do business in Pennsylvania is sufficient to create general personal jurisdiction.
2019 WL 233884, at *3-4 (cites and quotes of the same cases we just finished string-citing omitted).
Defense counsel – listen up youse guys – the courts are telling you what you have to do to get your clients out of this unconstitutional box. Bauman “did not address whether registration to do business is a sufficient basis for general personal jurisdiction, and the Third Circuit has not addressed the question of consent-based jurisdiction” since. Id. at *3. Forget about convincing a district court; nothing’s going to happen on the federal front until the Third Circuit reconsiders and overrules Bane.
This is a classic issue warranting interlocutory appeal under 28 U.S.C. §1292(b). Interlocutory appeal by permission under §1292(b) must: (1) “involve a controlling question of law as to which there is substantial ground for difference of opinion,” and (2) “an immediate appeal from the order may materially advance the ultimate termination of the litigation.” As to the first prong, our 50-state survey of general jurisdiction by consent precedent discusses at great length how every federal court of appeals to address this question since Bauman, and all eight state high courts, have unanimously concluded that “consent” based on corporate registration alone is fundamentally inconsistent with current principles of constitutional Due Process. That meets any standard of “substantial grounds.” Under prong two, an erroneous decision on personal jurisdiction puts at risk of nullification everything that follows in the litigation. See, e.g., Estate of Fox v. Johnson & Johnson, 539 S.W.3d 48 (Mo. App. 2017), transfer denied (Mo. Dec. 19, 2017) & (Mo. March 6, 2018) (overturning multimillion dollar talc verdict and dismissing for lack of personal jurisdiction). If there’s no personal jurisdiction, then there’s no case at all to litigate. Thus the requirement that “ultimate termination” of the litigation be “materially enhanced” should also be a lead pipe cinch.
Thus, we strongly recommend that defense counsel, in order to stop our clients from ceaselessly dog-paddling in the Pennsylvania deep end, seek interlocutory appeals in every future case where Bane and general jurisdiction by consent are all that is preventing dismissal for lack of personal jurisdiction. Sooner or later, hopefully sooner, one of the judges will grant that relief.