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United States of America > New York > Litigation Dispute resolution > Advisory > Article > “Tag, You’re Not It:” Corporate Executives May Travel Without Worry as the Ninth Circuit Holds that Corporations Are Not Subject to “Tag Jurisdiction”

Article: “Tag, You’re Not It:” Corporate Executives May Travel Without Worry as the Ninth Circuit Holds that Corporations Are Not Subject to “Tag Jurisdiction”

Almost 25 years ago the Supreme Court held that in-state personal service on an individual is enough to hold that individual subject to the general jurisdiction of the state. But does in-state personal service of a corporate executive create general jurisdiction over a corporation? The Ninth Circuit held in Martinez v. Aero Caribbean, No. 12-16043, 2014 WL 4100585 (9th Cir. Aug. 21, 2014), that personal service of a corporate executive does not create general personal jurisdiction over the corporation. Instead, personal jurisdiction over a corporation exists only when the corporation’s contacts render it “essentially at home” in the state. Id. at *1.

When confronted with this issue of first impression, the Ninth Circuit considered the Supreme Court’s holding in Burnham v. Superior Court, 495 U.S. 604 (1990), that California courts could exercise general personal jurisdiction over an individual defendant personally served while visiting his children in California. The Ninth Circuit distinguished Burnham because it did not deal with corporations, that is, “artificial persons.” While natural persons are present in a single, ascertainable place, corporations can only act through their agents and can do so in many places simultaneously. An officer acting on a corporation’s behalf does not become the corporation; thus, while a corporation may abstractly be “present” wherever its officers do business, this is not the type of physical presence the Burnham Court contemplated in upholding the constitutionality of “tag jurisdiction.”

The court discussed two cases from other federal circuits arguable in conflict. The First Circuit had held that service on a corporation’s president conferred general personal jurisdiction over the corporation, but did so in a footnote and without expressing a reason or citing a case. N. Light Tech., Inc. v. N. Lights Club, 236 F.3d 57, 63 n.10 (1st Cir. 2001). The Second Circuit had held that in-state service on an individual partner permits general personal jurisdiction over a partnership, First Am. Corp. v. Price Waterhouse LLP, 154 F.3d 16, 19-21 (2d Cir. 1998), but partnerships differ from corporations because a partnership does not exist apart from its partners. The Ninth Circuit expressly declined to express its opinion on whether the Second Circuit’s decision was correctly decided.

The U.S. Supreme Court may consider this case—or a similar one—in the near future as the Ninth Circuit’s decision conflicts with the First Circuit’s holding. However, the Martinez case follows the Supreme Court’s recent trend of making the exercise of personal jurisdiction over individuals and corporate entities more difficult.

Article by Charles E. "Trip" Dorkey III and Mark A. Silver

Last Update: 2015-Mar-01 Charles E. “Trip” Dorkey III - Dentons
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Author: Charles E. “Trip” Dorkey III
Law Firm: Dentons
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