The Supreme Court of Georgia stated that Allstate Insurance Co. v. Klein, 262 Ga. 599 (422 SE2d 863) (1992) does not violate the due process requirements of the United States Constitution despite an expressly stated tension with recent Supreme Court of the United States general personal jurisdiction jurisprudence. Cooper Tire & Rubber Company v. McCall, S20G1368, 2021 WL 4268074, (Sept. 21, 2021). Therefore, Georgia courts are allowed to exercise general personal jurisdiction over any out-of-state corporation that is “authorized to do or transact business in this state at the time a claim arises." Id. at *1.
In Klein, the Supreme Court of Georgia reviewed the Georgia Long Arm Statute and analyzed the definition of "nonresident." In so doing, the Court concluded that a foreign corporation that is authorized to transact business in Georgia may sue or be sued the same as a domestic corporation in this State, and as a result a cause of action does not have to arise out of a defendant's activities with the state. Klein, 262 Ga. at 601. Essentially, post-Klein, any corporation that is authorized to do business in Georgia has been subject to general jurisdiction of Georgia Courts. Id.
In reviewing whether Klein violated the Due Process Clause of the Fourteenth Amendment, the Supreme Court of Georgia had to review the basic tenants of personal jurisdiction jurisprudence. Of course, no PJ discussion can be had without discussing Pennoyer.
In Pennoyer v. Neff, 95 U. S. 714 (24 LE 565) (1878), the Supreme Court established the parameters governing a state court’s authority to assert personal jurisdiction over an out-of-state defendant in accordance with the Due Process Clause of the Fourteenth Amendment to the United States Constitution. Under that framework, due process of law required either the “voluntary appearance” of the out-of-state defendant or personal service of process upon the out-of-state defendant to bring the defendant within the state’s jurisdiction and allow the defendant to be “personally bound by any judgment rendered.” Pennoyer, 95 U. S. at 733-734.
Further, the 1917 case Pennsylvania Fire Insurance Co. of Philadelphia v. Gold Issue Mining & Milling Co., 243 U. S. 93 (37 SCt 344, 61 LEd 610) (1917), dealt with an out-of-state company that obtained a license to do business in Missouri and pursuant to Missouri's corporate statute filed a power of attorney consenting to service in that state. Id. at 94. The Supreme Court of Georgia summarized the holding of Pennsylvania Fire as follows:
[W]here a state statute notifies an out-of-state corporation that by registering and appointing an agent for service of process in the state, the corporation has consented to general personal jurisdiction there, the corporation has not been deprived of the Fourteenth Amendment’s guarantee of due process of law when it is sued in that state
Later, the famous International Shoe v. Washington, 326 U. S. 310 (66 SCt 154, 90 LE 95) (1945) case further defined personal jurisdiction over an out-of-state corporation as "consistent with the Due Process Clause of the Fourteenth Amendment, when the defendant corporation has such minimum contacts with [the forum state] such that the maintenance of the suit does not offend traditional notions of fair play and substantial justice, or in instances where the corporation’s continuous operations in the state were so substantial and of such a nature as to justify suit against it on causes of action arising from dealings entirely distinct from those activities.” Id. at 316, 318 (citation and punctuation omitted).
The Georgia Court highlighted that International Shoe never once mentions Pennsylvania Fire and certainly did not overrule that case. In fact, the Georgia Court states that International Shoe was applied only to cases where "no consent to be sued or authorization to an agent to accept service of process ha[d] been given" because the Supreme Court of the United States was only considering facts where the out-of-state corporate defendant was subject to general jurisdiction against its will. Cooper Tire, 2021 WL 4268074 at *4.
The Court continued that no Supreme Court of the United States case has ever overruled Pennsylvania Fire, including Goodyear Dunlop Tires Operations, S.A. v. Brown, 564 U. S. 915, 926-929 (131 SCt 2846, 180 LE2d 796) (2011) and Ford Motor Co. v. Mont. Eighth Judicial Dist. Court, __ U. S. __ (141 SCt 1017, 1037, 209 LE2d 225) (2020), both of which strictly adhere to International Shoe's famous one or two state approach to general jurisdiction ( i.e., where the company is incorporated and where its principal place of business is located (if different)).
Despite the Supreme Court of the United States' recent emphasis on specific personal jurisdiction, the Supreme Court of Georgia refused to view any case as overruling the proposition that an entity can consent to general jurisdiction. Cooper Tire, 2021 WL 4268074 at *8. In fact, the Supreme Court of the United State expressly ratified the conduct in 2011. See J. McIntyre Mach., Ltd. v. Nicastro, 564 U. S. 873, 880 (II) (131 SCt 2780, 180 LE2d 765) (2011) (plurality op.) (“A person may submit to a [s]tate’s authority in a number of ways[;] [t]here is, of course, explicit consent,” and “[p]resence within a [s]tate at the time suit commences through service of process is another example.” (Citations and punctuation omitted).).
The Georgia Court did note that some states have held that an entity cannot consent to general jurisdiction, however, all of those courts were in states that did not have a corporate domestication or registration statute, or authoritative case law interpreting such a statute to allow notice to out-of-state corporations that they consented to general jurisdiction in the state such as the Klein case. Cooper Tire, 2021 WL 4268074 at *8; See also Fidrych v. Marriott Intl. Inc., 952 F3d 124, 137 (4th Cir. 2020) (South Carolina); Waite v. AII Acquisition Corp., 901 F3d 1307, 1320-1321 (11th Cir. 2018) (Florida); Gulf Coast Bank & Trust Co. v. Designed Conveyor Sys., LLC, 717 Fed. Appx. 394, 397-398 (5th Cir. 2017) (Louisiana); DeLeon v. BNSF Railway Co., 426 P3d 1, 7-9 (392 Mont. 446) (2018) (Montana); and Genuine Parts Co. v. Cepec, 137 A3d 123, 148 (Del. 2016) (Delaware).
More important than the majority opinion (perhaps) is Justice Bethel's concurring opinion. In that opinion she begs the General Assembly to pay attention to the "peculiar and precarious position of the current law of Georgia." Id. at *11. Namely, Justice Bethel takes offense at the predicament "[b]ecause [the current law of Georgia] creates a disincentive for foreign corporations to register in Georgia, this structure strikes me as contrary to the often-expressed desire to make Georgia a 'business-friendly' state." Id. Only time will tell if the General Assembly chooses to do anything.