Introduction -

On January 26, 2017, the U.S. District Court for the Southern District of New York (S.D.N.Y.) decided Famular v. Whirlpool Corp., a case addressing the circumstances in which an out-of-state corporation may be deemed to have consented to the jurisdiction of New York courts. Specifically, Famular dealt with the “consent-by-registration” theory, which holds that a foreign corporation may consent to the general jurisdiction of a state’s courts by registering to do business in that state and appointing an in-state agent for service of process. The key issue addressed by the district court was whether consent-by-registration theory, which had been recognized in several previous decisions, remains valid the wake of the U.S. Supreme Court’s 2014 decision in Daimler AG v. Bauman, which greatly limited courts’ ability to exercise general personal jurisdiction over a non-domiciliary defendant on the basis that the defendant was “doing business” within the forum state. The continued validity of the consent-by-registration theory after Daimler has been a point of disagreement among U.S. federal courts, and resolution of this disagreement is likely to have significant implications for plaintiffs seeking to bring suit against foreign defendants in U.S. courts. In Famular, the district court ultimately concluded that the consent-by-registration theory is no longer a valid basis for the exercise of general personal jurisdiction after Daimler. This decision thus narrows the ability of plaintiffs to bring suits against foreign defendants in New York federal courts, and may have further implications for the theory of consent-by-registration if its reasoning is found persuasive in other jurisdictions.

History of Consent-by-Registration -

The notion that a court may exercise jurisdiction over an out-of-state defendant solely on the basis of that defendant’s registration to do business in the forum state has a long history. It stems largely from the 1917 case of Pennsylvania Fire Insurance Co. v. Gold Issue Mining & Milling Co., in which the U.S. Supreme Court ruled that a company that had registered to do business in Missouri – and that had designated a Missouri public official as agent for the service of process – had consented to the jurisdiction of Missouri state courts.