July 5, 2017 (Date Decided)
FOR APPELLANT: Jonathan O’Boyle (The O’Boyle Law Firm, P.C., and Law Offices of David Alan Klein, P.C., attorneys, David Alan Klein, on the brief).
FOR RESPONDENT: Stephen M. Orlofsky (Blank Rome LLP, attorneys; Mr. Orlofsky, of counsel; Adrienne C. Rogove, of counsel and on the brief; Ethan M. Simon, on the brief).
Plaintiff, a Chapter 11 debtor-in-possession, appealed from the dismissal of its malpractice action against defendant, a dissolved law firm. Plaintiff, headquartered in Florida, hired a partner of defendant to provide legal representation in the purchase and development of property in West Virginia. Following closing, plaintiff discovered title defects rendering the property unsuitable for development. Plaintiff later filed for relief in the bankruptcy court.
Defendant, a dissolved Pennsylvania limited liability partnership, maintained two New Jersey offices. After defendant’s partners voted to dissolve the partnership, defendant ceased all activity and closed its offices, including its New Jersey offices. When plaintiff filed the present action, defendant had no more than two employees located in Pennsylvania focused solely on winding up defendant’s affairs; however, defendant continued to maintain its New Jersey business registration and registered agent.
Defendant moved to dismiss plaintiff’s complaint for lack of personal jurisdiction. Plaintiff opposed the motion, asserting that at the time of the alleged negligent conduct many of defendant’s partners resided in New Jersey. Plaintiff also alleged specific instances of transacted business between the parties in New Jersey. Defendant responded by producing documents showing that its work on plaintiff’s matter did not occur in its New Jersey offices. The trial court concluded that plaintiff failed to establish a basis for personal jurisdiction and dismissed plaintiff’s complaint.
On appeal, plaintiff argued that a corporate entity’s registration and acceptance of service of process in a state constituted consent to submit to the general jurisdiction of the state’s courts. In response, defendant argued that the U.S. Supreme Court, in its ruling in Daimler AG v. Bauman, 134 S. Ct., 746, set forth the minimum requirements for general jurisdiction to focus on an entity’s affiliation with the state, such as its state of incorporation or evidence of continuous course of business.
The court affirmed the dismissal of plaintiff’s complaint. The court noted that personal jurisdiction could be established if contacts in a state gave rise to the action, or if a corporate defendant’s contacts with a state were so continuous and systematic to consider the state “home” for the defendant to establish general personal jurisdiction. The court ruled that defendant’s contacts asserted by plaintiff might have been sufficient to establish specific jurisdiction, but were not enough to support general jurisdiction. The court held that defendant did not have a systematic presence in New Jersey when plaintiff filed its action as it was already in the process of dissolving.