Here are a couple of things that happened recently (and no, we don’t mean a travel ban on Europe or the NBA cancelling the rest of its season). They’re not related, but separate posts would be too short.
First, last November we warned our colleagues that it was time to start thinking of alternative grounds – such as “logical contradiction” – for preserving the preemption of fraud on the FDA/private FDCA enforcement claims under Buckman. We pointed out that Buckman was essentially a “purposes and objectives” preemption decision, and that Justice Gorsuch appeared to be following Justice Thomas’ lead in questioning the viability of that theory of preemption. Our previous post was a follow-up to a post the previous month that read judicial tea leaves − a concurrence in denial of certiorari − and warned about where Justice Gorsuch seemed to be heading.
There’s no more need to read tea leaves. In Kansas v. Garcia, ___ S. Ct. ___, 2020 WL 1016170 (U.S. March 3, 2020), Justice Gorsuch joined Justice Thomas’ concurrence reiterating rejection of “purposes and objectives” preemption as a theory:
I write separately to reiterate my view that we should explicitly abandon our “purposes and objectives” pre-emption jurisprudence. . . . The doctrine of “purposes and objectives” pre-emption impermissibly rests on judicial guesswork about broad federal policy objectives, legislative history, or generalized notions of congressional purposes that are not contained within the text of federal law. I therefore cannot apply “purposes and objectives” pre-emption doctrine, as it is contrary to the Supremacy Clause.
Id. at *12 (Thomas & Gorsuch, JJ. concurring) (citations and quotation marks omitted).
Thus, there’s no more uncertainty. Two of the otherwise conservative justices whose votes we have to win on product liability preemption issues are dead set against “purposes and objectives” preemption. We think that the same result that the Court reached in Buckman can be obtained through legal analysis acceptable to Justices Thomas and Gorsuch, but it is now even more critical that these alternative arguments be asserted and preserved in cases where, previously, it would have sufficed simply to cite Buckman.
Second, on the issue of general personal jurisdiction by consent purportedly given in the context of corporate registration to do business, we’d like to point out that our side is now nine for nine in state high courts after Daimler AG v. Bauman, 571 U.S. 117 (2014). Recently, Nebraska switched to the majority rule rejecting such assertions of jurisdiction. In Lanham v. BNSF Railway Co., ___ N.W.2d ___, 2020 WL 962880 (Neb. Feb. 28, 2020), the Nebraska Supreme Court overruled its prior precedent (a 1982 case called Mittelstadt) and recognized that general jurisdiction by consent is inconsistent with Bauman. Mittelstadt’s allowance of general jurisdiction by consent “reflect[ed] the 19th century’s traditional view of personal jurisdiction, where personal jurisdiction could be obtained over a nonresident by personal service in the state.” Lanham, 2020 WL 962880, at *5. That anachronism does not survive Bauman:
We conclude that treating [defendant’s] registration to do business in Nebraska as implied consent to personal jurisdiction would exceed the due process limits prescribed in . . . [Bauman]. Currently, every state requires a foreign corporation doing business in the state to register and appoint an agent for service of process. Consequently, consent by registration would permit a corporation to be subject to general jurisdiction in every state in which it does business. This is the same type of global reach jurisdiction the U.S. Supreme Court expressly rejected as being inconsistent with due process.
Lanham, 2020 WL 962880, at *6 (citations, quotation marks, and footnote omitted). “[W]e join the majority of jurisdictions and hold that a corporation’s registration . . . does not provide an independent basis for the exercise of general jurisdiction. Accordingly, we overrule Mittelstadt.” Id. at *7.
And no only that, we have the Fourth Circuit in a published opinion reaffirming Ratliff v. Cooper Laboratories, Inc., 444 F.2d 745 (4th Cir. 1971) (applying South Carolina law), one of the first decisions ever to reject general jurisdiction by consent:
Ratliff seems to have implicitly concluded that the Pennsylvania Fire line of cases had been superseded by International Shoe’s minimum-contacts approach to personal jurisdiction. . . . Moreover, we find it difficult to reconcile the Pennsylvania Fire approach with the modern view of general jurisdiction expressed in the Supreme Court’s recent cases. Given the number of states that subject foreign corporations to domestication requirements, foreign corporations would likely be subject to general jurisdiction in every state where they operate — a result directly at odds with the views expressed by the Court in [Bauman].
Fidrych v. Marriott International, Inc., ___ F.3d ___, 2020 WL 986674, at *8 (4th Cir. March 2, 2020) (citations omitted) (applying South Carolina law). Pennsylvania Fire Insurance Co. v. Gold Issue Mining & Milling Co., 243 U.S. 93 (1917), of course, is one of those century-old cases plaintiffs in jurisdiction by consent cases love to cite – since they don’t have much else.
We’ve updated our post-Bauman 50-state survey on general jurisdiction by consent to reflect both Lanham and Fidrych. Forty-three of the states (plus DC and VI) currently reject general jurisdiction by consent, with only four states (and PR) allowing it. Moreover, the issue is currently on appeal in two of those four states (New Mexico & Pennsylvania).
And now back to your regularly scheduled pandemic.