Georgia Supreme Court Upholds Consent Jurisdiction Over Foreign Corporations
Time changes a lot of things, but after nearly 30 years, the Supreme Court of Georgia hasn’t budged on its stance on general personal jurisdiction. On September 21, 2021, the Court issued a unanimous opinion in a closely watched case regarding whether an out-of-state corporation was subject to suit in Georgia merely because it had registered to do business in Georgia. In Cooper Tire & Rubber Co. v. McCall, the Court declined to overrule Allstate Insurance Co. v. Klein— a nearly 30-year-old precedent granting state courts jurisdiction over companies registered to do business in the state, allowing a suit over faulty tires to go forward.
In 2018, McCall sued Cooper Tire and others in Gwinnett County state court, alleging that a defective tire caused him to lose control of his vehicle. A key argument in Cooper Tire’s defense was lack of personal jurisdiction. Cooper Tire argued that as an out-of-state corporation with minimal Georgia contacts, it could not be sued in a Georgia court. Though the April 2016 crash occurred in Florida, the tire at issue had been purchased six weeks earlier at a Georgia dealership by a Georgia resident. A trial court in 2018 granted Cooper Tire's motion to dismiss the suit, finding the company was “not at home” in Georgia for the purposes of jurisdiction, but the Georgia Court of Appeals reversed that decision, citing Klein to find that Cooper Tire's registration to do business in Georgia made it subject to the state's jurisdiction.
The Georgia Supreme Court agreed. “Because the Long Arm Statute does not apply to an out-of-state corporation that is authorized to do business in Georgia, Cooper Tire is not subject to specific personal jurisdiction in Georgia under OCGA §§ 9-10-90 and 9-10-91,” read the opinion drafted by Supreme Court of Georgia Justice Shawn LaGrua. “However, because Cooper Tire is registered and authorized to do business in Georgia, Cooper Tire is currently subject to the general jurisdiction of our courts under Klein's general-jurisdiction holding, which we have decided to leave in place. On this basis, we affirm the decision of the Court of Appeals.”
In concurrence, Justice Charlie Bethel noted that because of a trend in recent U.S. Supreme Court opinions where the Court has increasingly limited in which a state court can exercise jurisdiction over a foreign corporation, “the current law of Georgia will, at some point, be found to be inconsistent with the requirements of federal due process.” “Georgians injured in Georgia by the acts or omissions of corporations domiciled outside of Georgia and registered to conduct business here might find legal recourse available only in the courts of other states,” J. Bethel wrote. “This is so because in the event the holding of Klein is overruled on due process grounds, the ‘gap’ identified in the [Supreme Court of Georgia's] opinion in this case will immediately spring to life, and Georgia’s law governing the exercise of personal jurisdiction will not include a basis for jurisdiction over those businesses domiciled outside of Georgia that have registered to conduct business in Georgia.”