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US Supreme Court agrees with the legal arguments voiced by our shareholder Larry E. Coben

By: Anapol Weiss

On June 27, 2023, the United States Supreme Court agreed with the legal arguments voiced by our shareholder Larry E. Coben, who authored an Amicus Brief for the Center for Auto Safety and the Attorneys Information Exchange Group in Mallory v. Norfolk Southern Railway Co., 600 U. S. ___ (2023). The result of this ruling is to open the doors of more courts to the victims of corporate neglect (and product defect). As Larry identified the issue:

The issue raised in this appeal has significant jurisprudential implications for every American citizen who has a due process right to seek legal redress when she or he suffers harm at the hands of another, whether the culprit is an individual or a corporation. In this moment in time, the perplexing issue raised by this appeal is why shouldn’t a nationwide corporation be subject to personal jurisdiction in each state in which it decides to obtain the benefits obtained by registering to do business and carrying out continuous and substantial business—regardless of the state in which the harm has arisen?

The U.S. Supreme Court answered Larry’s question, stating:

“But if fairness is what Norfolk Southern seeks, pause for a moment to measure this suit against that standard. When Mr. Mallory brought his claim in 2017, Norfolk Southern had registered to do business in Pennsylvania for many years. It had established an office for receiving service of process. It had done so pursuant to a statute that gave the company the right to do business in-state in return for agreeing to answer any suit against it. And the company had taken full advantage of its opportunity to do business in the Commonwealth . . . “

Larry’s success in this case follows on the heals of another momentous victory in the Massachusetts Supreme Court in Doucet v. FCA US LLC (June 13, 2023), when that Court agreed with Larry that FCA (Chrysler) is subject to suit in Massachusetts when the New Hampshire resident’s defectively designed car—sold by FCA as a new car in Massachusetts—caused injury in an accident occurring in New Hampshire. The argument Larry made was:

Because the defendant here intentionally and purposefully delivered and marketed its products in the Commonwealth, it knew that it could be hauled into court predicated upon the release into the stream of commerce vehicles that were inadequately designed and caused harm.

* * *

The defendant-appellee is an automobile manufacturer incorporated in the State of Delaware, with offices in Michigan and manufacturing plants across the United States. Chrysler, along with its successor corporations conducts continuous and substantial business in every state including, of course, the Commonwealth of Massachusetts. Its advertisements on television and other media outlets are a constant reminder of the products it sells and the “value” of Chrysler products. The Chrysler dealership network extends to this Commonwealth and, in fact, the 2004 model year Sebring in question was leased as a new vehicle by Sudbay Chrysler, which has its dealership in Gloucester, MA. Sudbay is one of the defendant’s authorized dealerships. The same car was then resold by Sudbay to a Massachusetts’ resident a few years later after the lease ended. In 2011, the Sebring in question was sold in a private sale to a New Hampshire resident, who used it for a while and then resold it to Plaintiff Doucet in 2013. Mr. Doucet was a passenger in the Sebring when it was involved in a crash causing catastrophic injury because of flaws in its design. Because the Sebring was released into the stream of commerce in the Commonwealth of Massachusetts by Chrysler and Sudbay, this lawsuit was filed here. The defendant Chrysler’s marketing of the Sebring and the sale of this car in Massachusetts was the “. . . first step in a train of events that result[ed] in the personal injury” [Tatro v. Manor Care, Inc., 416 Mass. 763, 771-772 (Mass. 1994)] to Mr. Doucet. Thus, the plaintiff’s claim arises out of the defendant’s contacts in this Commonwealth, and the lower court’s refusal to accept jurisdiction was erroneous.

The importance of these two landmark decisions was highlighted in an article written by Larry and published in the Legal Intelligencer last year, when he forecasted the need to expand jurisdiction:

Modern commerce demands personal jurisdiction throughout the United States of large corporations. The framers of the United States Constitution, when drafting the commerce clause, desired a common market. In fulfillment of Treasury Secretary Alexander Hamilton’s vision of this nation as monolithic manufacturing engine, the United States developed and now maintains the strongest, unified industrial economy in the world. Downing v. Losvar, 507 P.3d 894, 911–12 (Wash. Ct. App. 2022). The vast expansion of our national economy during the past several decades has provided the primary rationale for expanding the permissible reach of a State’s jurisdiction. By broadening the type and amount of business opportunities available to participants in interstate and foreign commerce, our economy has increased the frequency with which foreign corporations actively pursue commercial transactions throughout the various States. In turn, States should have more leeway in bringing the activities of these nonresident corporations within the scope of their respective jurisdictions. Id. Granting a forum general jurisdiction over a corporation that registers to do business and then executes that plan by substantially carrying-on business in the State is consistent with the U.S. Supreme Court’s earlier rulings because it accepts the reality that these activities are “. . . so substantial and of such a nature . . . that they exceed the “at home” characterization of a corporation’s mere filing of incorporation.

We think it is reasonable that the U.S. Supreme Court will establish a rule that a foreign corporation which registers to do business and then conducts substantial and continuous business in the forum may be subject to general jurisdiction, because such a ruling will eliminate the tension existent between the limiting descriptors of the “at home” test and allow for general jurisdiction when a party is present and served within a state’s borders.