As product liability defense counsel, we of course stay up to date on significant court decisions dealing with the defense of Personal Jurisdiction. In cases where we are representing a corporation that was not sued in its home state (i.e., the state where it maintains its headquarters or where it was incorporated), we always consider filing a potential motion to dismiss on behalf of the foreign corporation at the outset of the case. In a motion to dismiss for lack of Personal Jurisdiction, the defense argues that it is not subject to the jurisdiction of the court where the action is filed, and therefore the “Forum Court” does not have the authority to render a decision or judgment that is binding on the foreign corporation, since it lacks the requisite jurisdiction. A jurisdictional motion to dismiss can be extremely powerful, and can protect a defendant from wrongfully being hauled into a court that is located outside of its home state and that does not have any connection to the issues that are in dispute in the lawsuit. Nonetheless, it also is important to carefully consider the prospects of raising this defense at the outset of the case, because the defense can be waived by a defendant, and in some instances, a defendant can consent to the Personal Jurisdiction of a foreign state.
There are, of course, situations where a foreign corporation can be lawfully sued outside of the state where it resides. For example, in the situation where a corporation commits tortious conduct that causes an injury to a plaintiff within the forum state, that is referred to as Specific Personal Jurisdiction and can serve as a basis for forcing a foreign defendant to answer the claims made against it in the Forum Court located outside of its home state. However, in those cases where the Forum Court does not have any connection to the issues in dispute in the pending lawsuit, such as in the case of a product liability lawsuit, where (1) the accident did not occur in the state where the Forum Court is located and (2) the product in question was not designed, manufactured or sold in the state where the Forum Court is located, the Personal Jurisdiction of the court will be challenged by the defendant. The foreign corporation will challenge the jurisdiction of the Forum Court in this instance, because the alleged tortious acts it committed did not take place in the forum state, and therefore do not arise out of its contacts with the forum state.
In the scenario where the foreign corporation is sued outside of its home state, in a court located in a state that does not have any connection to the issues in dispute in the lawsuit, it can only be required to litigate its defense of the lawsuit in the Forum Court, if it can be found that the foreign corporation is subject to the “General Jurisdiction” of that court. When a corporation is subject to the General Jurisdiction of a court, it can essentially be sued for any dispute in that court, regardless of whether the issues in dispute have any connection to the state where the court is located. Normally, a corporation can only be subject to the General Jurisdiction of a court in the state where it resides. If it is found that a corporation is subject to the General Jurisdiction of a court, this means that the defendant-corporation can be required to respond to the claims made against it in that lawsuit, regardless of whether the issues that are in dispute in the lawsuit arise from the defendant corporation’s activities within the state. Therefore, in order for a court to find that a foreign corporation is subject to the General Jurisdiction of that court, there must be a showing that the foreign corporation somehow waived its jurisdictional defense, or previously consented to the General Jurisdiction of the Forum (out-of-state) Court.
New York Court of Appeals Decision in Aybar v. Aybar
New York’s highest court recently issued a noteworthy decision in the area of Personal Jurisdiction dealing with this specific issue of whether defendants, which were foreign corporations sued in New York, had consented to the General Jurisdiction of the New York courts. The New York Court of Appeals held in their decision of Aybar v. Aybar  that the defendants who contested jurisdiction in the case, Ford Motor Company (Ford) and The Goodyear Tire & Rubber Co. (Goodyear), were not subject to the General Personal Jurisdiction of the New York courts by virtue of their registering to do business in the state of New York as foreign corporations and/or by appointing an agent for service of process in New York.
The decision of the NY Court of Appeals in Aybar timely follows the recent landmark decision issued by the U.S. Supreme Court in Ford v. Montana, which we covered in previous posts on this site on December 22, 2020; April 2, 2021; and April 23, 2021. However, the SCOTUS decision in Ford v. Montana primarily dealt with the constitutional limits of a court’s Specific Personal Jurisdiction over a foreign defendant corporation.
In Aybar, the action arose out of a vehicular accident that occurred in the state of Virginia. The Plaintiff, a New York resident, claimed the Goodyear tire equipped on the Ford Explorer the Plaintiff was operating was defective and caused the accident. Instead of commencing this product liability action in the state where the accident occurred, which was Virginia, or in the states where the vehicle was manufactured or sold, the Plaintiff commenced the action in the New York court, which has no connection to the issues in dispute in the lawsuit. In opposition to the jurisdictional challenge made by Ford and Goodyear, the Plaintiff argued those foreign corporations consented to the General Jurisdiction of the New York courts by registering as authorized foreign corporations, and by designating a registered agent for service of process within the state.
Under the New York Business Corporation Law, a foreign corporation “shall not do business in the state until it has been authorized to do so.” As part of the process of registering to do business in the state of New York as a foreign corporation, the foreign corporation also must designate the secretary of state as its agent for service of process, and if it has a registered agent, it must identify that registered agent for service of process when it registers. However, the Court of Appeals correctly pointed out that the New York Business Corporation Law does not condition the right to do business within the state of New York on the foreign corporation consenting to the General Jurisdiction of New York courts.
The Court of Appeals acknowledged it cannot find a foreign corporate defendant to be subject to the General Personal Jurisdiction of the New York courts based on that foreign corporation’s compliance with the existing business registration laws in the state of New York. The Court held that compliance with those business registration laws does not constitute consent and waiver to the General Jurisdiction of the New York courts, as was argued by the Plaintiff. The Court further held that adopting the Plaintiff’s argument would effectively constitute an unauthorized amendment of the Business Corporation Law and include a provision that does not exist in the statute.
This decision will serve as helpful case law precedent to foreign defendants that are forced to defend actions filed against them in the state of New York that do not have any connection to the state or do not arise from their activities within the state – regardless of how prevalent those unrelated activities may be within the state of New York. As mentioned above, the defense of Personal Jurisdiction should always be considered carefully at the outset of the case, because it can be waived in some instances and, therefore, is not an absolute defense.
 2021 NY Slip Op. 05393, Decided October 7, 2021.
 NY BCL section 1301 (a)
 NY BCL section 1304 (a)(7)