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posted 9 years ago
Almost 25 years ago the Supreme Court held that in-state
personal service on an individual is enough to hold that individual
subject to the general jurisdiction of the state. But does in-state
personal service of a corporate executive create general jurisdiction over
a corporation? The Ninth Circuit held in Martinez v. Aero
Caribbean, No. 12-16043, 2014 WL 4100585 (9th Cir. Aug. 21, 2014),
that personal service of a corporate executive does not create general
personal jurisdiction over the corporation. Instead, personal
jurisdiction over a corporation exists only when the corporation’s
contacts render it “essentially at home” in the state.
Id. at *1.
When confronted with this issue of first impression, the
Ninth Circuit considered the Supreme Court’s holding in Burnham v.
Superior Court, 495 U.S. 604 (1990), that California courts could
exercise general personal jurisdiction over an individual defendant
personally served while visiting his children in California. The
Ninth Circuit distinguished Burnham because it did not deal with
corporations, that is, “artificial persons.” While natural persons
are present in a single, ascertainable place, corporations can only act
through their agents and can do so in many places simultaneously. An
officer acting on a corporation’s behalf does not become the corporation;
thus, while a corporation may abstractly be “present” wherever its
officers do business, this is not the type of physical presence the
Burnham Court contemplated in upholding the constitutionality of
“tag jurisdiction.”
The court discussed two cases from other federal circuits
arguable in conflict. The First Circuit had held that service on a
corporation’s president conferred general personal jurisdiction over the
corporation, but did so in a footnote and without expressing a reason or
citing a case. N. Light Tech., Inc. v. N. Lights Club, 236
F.3d 57, 63 n.10 (1st Cir. 2001). The Second Circuit had held that
in-state service on an individual partner permits general personal
jurisdiction over a partnership, First Am. Corp. v. Price Waterhouse
LLP, 154 F.3d 16, 19-21 (2d Cir. 1998), but partnerships differ from
corporations because a partnership does not exist apart from its
partners. The Ninth Circuit expressly declined to express its
opinion on whether the Second Circuit’s decision was correctly
decided.
The U.S. Supreme Court may consider this case—or a similar
one—in the near future as the Ninth Circuit’s decision conflicts with the
First Circuit’s holding. However, the Martinez case follows
the Supreme Court’s recent trend of making the exercise of personal
jurisdiction over individuals and corporate entities more
difficult.
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