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| 1 minute read

Did your company consent to being sued in a state when it registered to do business there? The caselaw split widens.

The SCOTUS has issued a number of recent decisions attempting to clarify the law in the area of personal jurisdiction. It has not, however, been asked to squarely answer the question of whether "consent by registration" is enough to convey general personal jurisdiction over an out-of-state corporation. That soon may change. 

On September 21, 2021, the Georgia Supreme Court issued a decision in Cooper Tire & Rubber Co. v. McCall holding that an out-of-state corporation automatically consents to being sued in Georgia when it registers to do business there. In McCall, a Florida resident was a passenger injured in an single-car accident in Florida. He filed suit in Georgia against the driver, a Georgia resident, the Georgia auto dealer that sold the car, and Cooper Tire, a Delaware corporation with headquarters in Ohio. Cooper Tire moved to dismiss the case against it, arguing the Georgia courts did not have personal jurisdiction, notwithstanding Georgia precedent finding personal jurisdiction over any company that registers to do business within the state. Cooper Tire contended recent SCOTUS decisions made the practice unconstitutional.

The Georgia Supreme Court rejected the challenge, and found these decisions "in tension" with Georgia precedent and the SCOTUS's own precedent, dating back to a 1917. Thus, Georgia joined with federal courts in Pennsylvania, Kansas, and New Mexico, all of whom have issued recent decisions allowing suits to proceed on the basis of consent by registration.

Because the majority of states do not follow this rule, it should only be a matter of time before SCOTUS is asked to weigh in on this issue. Due to the uncertainty this split in authority creates, I'm hoping that day is sooner, rather than later.

Georgia is among several states where companies are subject to general jurisdiction—just like a domestic corporation—through registration. Recent decisions of the U.S. Supreme Court have left open whether the practice is constitutional.