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From our prior personal jurisdiction posts concerning Daimler AG v. Bauman, 134 S. Ct. 746 (2014), and the plaintiff-side dodge of “general jurisdiction by consent,” regular blog readers were aware that one of the few jurisdictions where the consent theory appeared to have some traction was Delaware. Those adverse decisions were based on pre-Bauman Delaware state law, Sternberg v. O’Neil, 550 A.2d 1105 (Del. 1988), which had allowed general jurisdiction by consent.

No longer.

In an asbestos mass tort case, the Delaware Supreme Court has just overruled Sternberg – on the basis that general jurisdiction by consent merely by means of registration to do business is incompatible with Bauman:

We conclude that after [Bauman], it is not tenable to read Delaware‘s registration statutes as Sternberg did. Sternberg[] . . . rested on a view of federal jurisprudence that has now been fundamentally undermined by [Bauman] and its predecessor Goodyear Dunlop Tires Operations, S.A. v. Brown. . . . Sternberg represented just one plausible way to read a statute that on its face does not refer explicitly to personal jurisdiction, much less to consent to personal jurisdiction.

Genuine Parts Co. v. Cepec, No. 528, 2015, slip op. at 2 (Del. April 18, 2016) (footnote omitted). Thus, “Delaware‘s registration statutes must be read as a requirement that a foreign corporation must appoint a registered agent to accept service of process, but not as a broad consent to personal jurisdiction in any cause of action, however unrelated to the foreign corporation‘s activities in Delaware.” Id. at 3. That means, “[i]n most situations where the foreign corporation does not have its principal place of business in Delaware, that will mean that Delaware cannot exercise general jurisdiction over the foreign corporation.” Id. (footnote omitted).

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Continue Reading Breaking News – No General Jurisdiction by Consent in Delaware

This post is from the non-Reed Smith side of the blog only.

We are going to break from the traditional communal persona for just a minute because today’s case made me think of something my nine-year old son said just the other day.  He was watching a video with me on the evolution of dance…

This post comes only from the Dechert side of the blog since Reed Smith was involved in the appeal that is the subject of the post.

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Usually plaintiffs’ lawyers have the simpler story to tell.  They’ll tell you that they drive on the highway while defense lawyers wander about on side roads.  If this is true, however, it’s usually because the defense is responding to accusations tossed out by plaintiffs, and responding is rarely simple.  But the roles were reversed in the diversity jurisdiction dispute addressed by the Third Circuit in Johnson v. SmithKline Beecham Corporation, Slip Op.(3d Cir. June 7, 2013).  The defense had the much simpler argument, an argument that won at the district court level (before two judges, losing before one other) and, as we discuss below, just won before the Third Circuit.

The plaintiffs originally filed suit in the Philadelphia Court of Common Pleas, naming a number of defendants, including GlaxoSmithKline’s operating company, GlaxoSmithKline LLC (“GSK LLC”) and GSK LLC’s sole member, GlaxoSmithKline Holdings (“GSK Holdings”).  The defendants believed that there was complete diversity and removed the lawsuit to federal court.  Plaintiffs believed otherwise, and moved to remand.  The key issue was the citizenship of the operating company, GSK LLC.  Plaintiffs argued, among other things, that GSK LLC was a citizen of Pennsylvania, the forum state, and was not diverse from one of the plaintiffs, a Pennsylvania citizen.  The defense argued that GSK LLC was a Delaware citizen, making the case removable.

The defense’s argument was simple.  GSK LLC is a limited liability company, and such non-corporate business organizations are citizens of the state or states in which each of their members are citizens.  Slip. Op. at 21 (citing Carden v. Arkoma Assocs., 494 U.S. 185, 195-96 (1990)).  GSK LLC had only one member: GSK Holding, a corporation.  So what was its citizenship?  By statute (21 USC 1332 (c)), a corporation is a citizen of both the state in which it’s incorporated and the state in which it has its principal place of business.  In both instances, that’s Delaware for GSK Holdings.  Accordingly, GSK Holdings is a Delaware citizen and so is GSK LLC.  Done.  Fairly simple.  There’s diversity.

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Continue Reading Third Circuit on Diversity Jurisdiction: Keep It Simple

We can’t comment on the cases because of our involvement, but we wanted to pass along this new opinion granting summary judgment on statute of limitations grounds in the Seroquel litigation.  Burrell v. AstraZeneca LP, slip op. (Del. Super. Sept. 20, 2010).

It’s worth a read.  The court concluded, for purposes of determining when…

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The fascinating, and ultimately frustrating, pair of decisions in Guinan v. A.I. duPont Hospital for Children, ___ F. Supp.2d ___, 2009 WL 307019 (E.D. Pa. Feb. 6, 2009) (“Guinan I“), and Guinan v. A.I. Dupont Hospital for Children, ___ F. Supp.2d ___, 2009 WL 311113 (E.D. Pa. Feb. 6, 2009) (“…

In our prior posts on “Preemption Lite” and “Then There Were Seven,” we discussed the impact of certain “safe harbor” provisions under state consumer fraud acts where the violations being claimed involved FDA-regulated activities.

We’re pleased to report that one of those cases, Pennsylvania Employee Benefit Trust Fund v. Zeneca, Inc., 2005 WL 2993937,…