The United States District Court for the Eastern District of Pennsylvania in Winters v. Akzo Nobel Surface Chemistry, LLC recently held that any company that registers to do business in Pennsylvania consents to general jurisdiction in the Commonwealth's courts. This departed from a recent trend in which other judges in the Eastern District held that constructive consent through registration violated the Due Process Clause of the Constitution and that the validity of the Third Circuit's 1991 decision in Bane v. Netlink, Inc. did not survive the U.S. Supreme Court's 2014 decision in Daimler AG v. Bauman.

In Winters, the plaintiffs, Pennsylvania residents, brought suit against multiple defendants, including BTX Global Logistics ("BTX"), for alleged injuries from chemical exposure. BTX is a Connecticut company with its principal place of business in Connecticut. BTX moved to dismiss the complaint for lack of personal jurisdiction. Plaintiffs opposed the motion by arguing that, because BTX had registered to do business in Pennsylvania, it had subjected itself to general personal jurisdiction in Pennsylvania.

In denying BTX's motion, Judge Schmehl sought to distinguish this case from Sullivan v. A.W. Chesterton, Inc. et al. (In re Asbestos Products Liability Litigation) – "the foremost opinion within [EDPA] to depart from Third Circuit precedent [Bane]." In doing so, Judge Schmehl reasoned that Judge Robreno focused on "a narrow issue of law in light of Daimler – whether consent to jurisdiction that foreign corporations give under Pennsylvania's statutory regime is knowing and voluntary and thus, valid." According to Judge Schmehl, because the "Daimler Court did not reference anything regarding consent to jurisdiction based on business registration...and did not establish a new constitutional standard that is relevant to the narrow issue in this case...Bane remains valid and controlling law within the [Third Circuit]." The Court acknowledged that absent Pennsylvania's consent-by-registration law there would be no basis for the Court to exercise personal jurisdiction over BTX.

In Bane, the Third Circuit held that an out-of-state corporation with no offices, property or employees in Pennsylvania, that neither paid taxes nor advertised in the commonwealth, and only had employees occasionally travel to it on business, was subject to general jurisdiction because it registered to do business as a foreign corporation. The Winters Court held that the holding in Bane survived the Supreme Court's decisions in Daimler and its progeny.

Pennsylvania is in a jurisprudential ping-pong match concerning jurisdiction by constructive consent. To say the current state of affairs within Pennsylvania is far from game, set, match is an understatement. The questions surrounding the viability of Bane illustrate that Pennsylvania law is in flux. The current split in Pennsylvania's federal district courts cries out for resolution by the Third Circuit and the Pennsylvania Supreme Court.

Originally published 3 June 2020

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