Corporate > AG Deal Diary > Antitrust-Related Recent Developments: Second Circuit Confirms Limited Nature of General Personal Jurisdiction
29 Sep '16

Following the Supreme Court’s 2014 decision in Daimler AG v. Bauman, several opinions from the United States Court of Appeals for the Second Circuit confirm the limited circumstances in which courts may exercise general personal jurisdiction over a defendant.  The Second Circuit’s decisions in Waldman v. Palestine Liberation Organization, Brown v. Lockheed Martin Corp. and Gucci America, Inc. v. Weixing Li demonstrate that branch offices, employees and business registration in the forum state, standing alone, are insufficient.

In Waldman v. Palestine Liberation Organization, — F.3d — (2d Cir. 2016), the court overturned a district court’s determination that personal jurisdiction was present in an action against the Palestinian Liberation Organization (PLO) and the Palestinian Authority (PA) based on attacks that occurred in Israel.  The panel held that the PLO’s maintenance of an office in Washington, D.C., to promote the Palestinian cause in speeches and media appearances, and retention of a lobbying firm were insufficient to provide the court with jurisdiction over the PLO and PA.

In Brown v. Lockheed Martin, 814 F.3d 619 (2d Cir. 2016), the court declined to adopt a rule that would subject an international corporation to general personal jurisdiction based on a state’s registration statute.  The plaintiff argued that, by registering to do business in Connecticut under Connecticut’s registration statute, Lockheed Martin effectively consented to general personal jurisdiction in that state. Rejecting that contention, the Second Circuit noted that all states appeared to have registration statutes and held that adopting such a rule would subject a corporation to the general jurisdiction of courts in every state in which it registered.  The court found it significant that, although Lockheed leased a building in Connecticut and had used three other leased locations in the jurisdiction from 2008 through 2012, it did not own property in the state. The panel further noted that raw numbers of employees or revenues in a jurisdiction are less salient than those numbers in context of a corporation’s overall operations.  To that point, the panel explained that Lockheed’s 30 to 70 workers in Connecticut represented less than 0.05% of Lockheed's full workforce and the $160 million in revenue for its Connecticut-based work never exceeded 0.107% of the company’s total annual revenue.

In Gucci America, Inc. v. Weixing Li, 768 F.3d 122 (2d Cir. 2014), the court held that, although the district court could impose an injunction freezing the assets of individual defendants having clear contacts with New York, the district court’s later order compelling the Bank of China to comply with the injunction ran afoul of personal jurisdiction principles.  The panel concluded that the Bank of China’s four branch offices in and conduct of a small portion of its worldwide business in New York did not provide a basis for the exercise of general personal jurisdiction.