U.S. District Judge Michael Baylson of the Eastern District of Pennsylvania ruled in Youse & Youse v. Johnson & Johnson that Pennsylvania courts have jurisdiction over defendant Imerys Talc America. The decision touched on the closely watched issue of whether recent U.S. Supreme Court precedent regarding jurisdiction for out-of-state companies conflicts with Pennsylvania’s unique business registration law.
Imerys had argued that, under the U.S. Supreme Court’s 2014 case Daimler A.G. v. Bauman, Pennsylvania could not have jurisdiction. But Baylson cited Bane v. Netlink, a 1991 decision from the U.S. Court of Appeals for the Third Circuit, which said Pennsylvania’s business registration law was a sufficient basis to establish jurisdiction.
“Imerys urges us not to follow Bane, contending that ‘after Daimler, corporations cannot be subject to personal jurisdiction merely because they do business in the forum state,’” Baylson said. “Daimler, however, 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 after Daimler.”
Baylson’s decision followed a growing list of cases in the wake of Daimler that courts have declined to toss from Pennsylvania because of its business registration law, which requires companies to consent to jurisdiction in Pennsylvania. Baylson sited six cases since 2016 where courts denied similar motions.
State courts in Pennsylvania have likewise been addressing the issue recently, and the question is somewhat in flux.
Last month, the state Superior Court agreed to hear a case en banc that hinges on the interplay between Daimler and the registration law. The Superior Court had previously ruled in a pair of cases that the business registration law still established jurisdiction despite the U.S. Supreme Court’s rulings.
Those Superior Court decisions conflicted with a Philadelphia Court of Common Pleas judge who determined in June that jurisdiction arising out of the state’s registration law could not withstand the recent Supreme Court precedent. Along with Daimler, that ruling relied on Bristol-Myers Squibb v. Superior Court of California, BNSF Railway v. Tyrrell, and Goodyear Dunlop Tires Operations v. Brown. Those cases have largely held that courts only have jurisdiction over a company if it is essentially at home in the state, if it is incorporated there, or if the state is the company’s principal place of business.
Imerys is a Delaware corporation, and its principal place of business is in California. The company had argued in Youse & Youse that its only contact with Pennsylvania was its registration to do business.
However, Baylson said that, at least for now, that contact is enough.
“Without the Third Circuit overruling Bane, or distinguishing Daimler, we follow these decisions and conclude that registration to do business in Pennsylvania is sufficient to create general personal jurisdiction,” Baylson said.
Neither Gori Julian & Associates attorney Jason Hodrinsky, nor John McMeekin of Rawle & Henderson, who is representing Imerys, returned a call Thursday.