Boeing, Boeing, Gone: General Jurisdiction over Corporations, Principal Place of Business, and a Second Look at the Total Activities Test
In 2011’s Goodyear Dunlop Tires Operations, S.A. v. Brown, the United States Supreme Court redefined the contours of corporate personal jurisdiction, radically curtailing the “doing business” jurisdiction that previously predominated. Since then, corporations are only subject to general jurisdiction where they are “fairly regarded as at home,” a domicile test effectively limited to two locations: (1) the state in which the corporation is incorporated and (2) the state in which the corporation has its “principal place of business.” However, the Supreme Court has never explicitly defined the term “principal place of business” for personal jurisdiction purposes. The Court has addressed this topic in the context of diversity jurisdiction, in 2010’s Hertz Corp. v. Friend, finding that a corporation’s “principal place of business” is its “nerve center,” usually its corporate headquarters. This note finds that the federal courts, lacking explicit guidance from the Supreme Court, have largely applied the Nerve Center test for personal jurisdiction purposes as well. This is the wrong approach. The Nerve Center test, when applied for personal jurisdiction purposes, unjustifiably limits plaintiffs’ access to convenient forums, shielding defendants from suit in forums to which they are closely connected, and is in deep tension with the Court’s long-standing precedent from International Shoe Co. v. Washington that general jurisdiction must emanate from a defendant’s “continuous and systematic” contacts with the forum state. Using the Boeing Company and its deep connections to the state of Washington as a guiding example, this note argues that the proper test to apply in the context of personal jurisdiction is a modified version of the Total Activities test, under which a corporation has its “principal place(s) of business” at both its “nerve center” and its “locus of operations,” the location at which the bulk of the corporation’s actual activity occurs. This test resolves serious policy concerns raised by mechanically applying the diversity-derived Nerve Center test in the fundamentally different context of personal jurisdiction, and harmonizes potentially conflicting strands of Supreme Court general jurisdiction jurisprudence.
Robert E. Stengel,
Boeing, Boeing, Gone: General Jurisdiction over Corporations, Principal Place of Business, and a Second Look at the Total Activities Test,
88 Brook. L. Rev.
Available at: https://brooklynworks.brooklaw.edu/blr/vol88/iss1/6