As we explained in our case summary, the question in this case was whether a foreign corporation that registers to do business in the State of New York and appoints an in-state agent for the service of process thereby consents to personal jurisdiction in the State. In a 5-2 decision (Singas, J.), the Court held that registration does not constitute consent to jurisdiction. Judge Wilson dissented in an opinion joined by Judge Rivera.
The majority first looked to the various provisions of the Business Corporation Law that require a foreign corporation to register to do business in New York. The “plain terms” of those provisions, the majority observed, did not require a foreign corporation to consent to jurisdiction as a consequence of registering to do business in New York. The majority then turned to Bagdon v. Philadelphia & Reading Coal & Iron Co., 217 N.Y. 432 (1916), which for nearly a century courts–including Supreme Court in this case–had interpreted to mean that appointing an in-state service agent constituted consent to jurisdiction in the State. That decision, the majority explained, had been misinterpreted. In the majority’s view, Bagdon only addressed service of process; it did not address jurisdiction.
In the majority’s view, this understanding of Bagdon was consistent with the trajectory of Supreme Court precedent addressing personal jurisdiction. Historically, that precedent tethered jurisdiction to presence in a state. Under that rubric, a corporation would be deemed present in a state if it’s agent was present there. Thus, proper service on a corporate agent in a state meant that the corporation was properly subject to jurisdiction there. But conflating proper service–the issue addressed in Bagdon–with the jurisdictional effect of proper service was a mistake, the majority explained, especially with the Supreme Court’s evolution away from a presence-based rationale for jurisdiction to the contacts-based rationale articulated in International Shoe Co. v. Washington, 326 U.S. 310 (1945). “[T]he analysis necessary to determine the effect of that service under current precedent is not the same as it was when Judge Cardozo considered the issue [in Bagdon].” According to the majority, Bagdon simply did not address the effect of proper service under current precedent and could not be read as holding that, under that modern framework, appointing an agent to receive service in a state constitutes consent to jurisdiction.
Judge Wilson disagreed on several points. First, he disagreed with the majority’s reading of the Business Corporation Law. “[T]he purpose of the statute was to subject foreign corporations to jurisdiction in New York.” True, it did that through an outdated mechanism, but the fact remained that the purpose of the statute was to subject foreign corporations to jurisdiction in the state. Next, Judge Wilson disagreed about the relevance of changes to Supreme Court personal jurisdiction precedent. Those changes may have made a consent-by-registration rationale for jurisdiction less essential, but the changes did not make it unavailable altogether. And lastly, Judge Wilson disagreed with the majority’s interpretation of Bagdon. “Bagdon is not a case about service, nor is it a common-law rule,” he explained. “Bagdon is a case about consent—specifically, consent through business registration as a valid basis for general jurisdiction in the courts of New York.” In Judge Wilson’s view, the majority’s reinterpretation of Bagdon ignored history to achieve an end that was contrary to what the Legislature had made clear for years: that “purpose in requiring foreign corporations registering to do business here is to subject them to jurisdiction here.”