A Treatise on Personal Jurisdiction From Judge Lihotz

Dutch Run-Mays Draft, LLC v. Wolf Block, LLP, 450 N.J. Super. 590 (App. Div. 2017).  Issues of personal jurisdiction crop up fairly frequently, despite New Jersey’s settled principle of applying personal jurisdiction to the outer limits of what due process allows.  Today’s opinion by Judge Lihotz contains an exhaustive discussion of specific vs. general jurisdiction, in the context of a professional negligence action against a once-proud Philadelphia-based law firm that has since dissolved.

The specific issue was whether the dissolving law firm’s registration to do business in New Jersey, and its acceptance of service of process here, sufficed to confer either general or specific jurisdiction.  The firm moved to dismiss the action for lack of personal jurisdiction.  In response, plaintiff contended that “when the negligent conduct arose, numerous partners of defendant resided in Camden County, and several New Jersey residents were members of the ‘Wind Down Committee.'”  But defendant showed that work on the project that triggered plaintiff’s claim was neither performed in nor billed from New Jersey, no meetings regarding it occurred here, and only two phone calls were made from Philadelphia to New Jersey about the matter.

The Law Division granted dismissal.  The Appellate Division, applying the de novo standard of review, with the burden on plaintiff to plead enough facts to establish personal jurisdiction, affirmed.

Judge Lihotz concluded that none of the facts marshaled by plaintiff sufficed for either specific or general jurisdiction.  Specific jurisdiction did not exist because the facts that supposedly supported extensive contacts with New Jersey connected to the underlying representation did not exist.

Judge Lihotz likewise did not “agree business registration rises to consent to submit to the general jurisdiction in the forum.”  No statute calling for registration gives registration that effect.  Instead, Judge Lihotz ruled that “use of a registered agent is more likely a means of facilitating service of process for actions where jurisdiction properly relates to minimum contacts or specific actions in the forum.”  Moreover, Daimler, AG v. Bauman, 571 U.S. ___, 134 S.Ct. 746 (2014), severely limited the circumstances that would make a defendant “at home,” and therefore subject to personal jurisdiction, in a given forum.  Declining to follow Allied-Signal, Inc. v. Purex Inds., Inc., 242 N.J. Super. 362 (App. Div. 1990), on which plaintiff relied heavily, the panel “join[ed] the many courts that have circumscribed the view of general jurisdiction post-Daimler.”

There was also a “simpler reason” for the panel’s ruling.  “The fact defendant once conducted possibly extensive business in New Jersey cannot serve to establish jurisdiction over defendant’s unrelated actions outside the state when, at the time plaintiff’s complaint was filed, defendant was well on its way to complete dissolution and was not conducting business in New Jersey or anywhere else.”

The opinion is an excellent source of the law in this area, and is as up-to-date as possible, discussing as it does not only New Jersey cases, but Supreme Court of the United States cases issued as recently as June 19, 2017.  Those cases are BNSF Railway Co. v. Tyrell, 581 U.S. ___, 137 S.Ct. 1549 (2017), and Bristol-Myers Squibb Co. v. Superior Court of California, 582 U.S. ___, ___ S. Ct. ___ (2017).

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