GENUINE PARTS CO. v. CEPEC

STRINE, Chief Justice, for the Majority:

I. INTRODUCTION

Like every other state in our republic,1 Delaware requires a foreign corporation that sells any product or service in the state to register to do business and agree to the appointment of a registered agent to receive service of process. In this case, a large Georgia corporation that properly registered to do business in Delaware has been sued in Delaware over claims having nothing to do with its activities in Delaware. Adhering to the interpretation given to our registration statutes — 8 Del. C. §§ 371 and 376 — in Sternberg v. O'Neil,2 our Superior Court held that, notwithstanding the U.S. Supreme Court's decision in Daimler AG v. Bauman,3 the foreign corporation consented to Delaware's general jurisdiction merely by registering to do business in Delaware. This interlocutory appeal raises the singular issue of whether Delaware may exercise general jurisdiction over a foreign corporation for claims having nothing to do with Delaware, as a price for the corporation agreeing simply to be able to do business in Delaware.

We conclude that after Daimler, it is not tenable to read Delaware's registration statutes as Sternberg did. Sternberg's interpretation was heavily influenced by a prior reading given to § 376 by our U.S. District Court,4 and like that District Court decision, rested on a view of federal jurisprudence that has now been fundamentally undermined by Daimler and its predecessor Goodyear Dunlop Tires Operations, S.A. v. Brown.5 Not only that, Sternberg was a case where the exercise of personal jurisdiction over the foreign corporation was proper under the minimum-contacts test, anyway,6 and where the corporate governance claims at issue were closely connected to the internal affairs of a Delaware corporation.7 Most important, Sternberg represented just one plausible way to read a statute that on its face does not refer explicitly to personal jurisdiction, much less to consent to personal jurisdiction.

Our duty under our law is to give as much effect as possible to a state statute, where it is constitutional to do so.8 After Daimler, we hold that Delaware's registration statutes must be read as a requirement that a foreign corporation must appoint a registered agent to accept service of process, but not as a broad consent to personal jurisdiction in any cause of action, however unrelated to the foreign corporation's activities in Delaware. Rather, any use of the service of process provision for registered foreign corporations must involve an exercise of personal jurisdiction consistent with the Due Process Clause of the Fourteenth Amendment.

In most situations where the foreign corporation does not have its principal place of business in Delaware, that will mean that Delaware cannot exercise general jurisdiction over the foreign corporation.9 In that circumstance, the core statute to evaluate whether the foreign corporation is subject to specific jurisdiction is Delaware's long-arm statute, 10 Del. C. § 3104. The long-arm statute operates smoothly in tandem with § 376, which provides that a foreign corporation can be served via its registered agent in the state. Under the long-arm statute, a foreign corporation "submits to the jurisdiction of the Delaware courts" as to any cause of action that arises out of certain enumerated acts by the corporation in this state such as "transact[ing] any business or perform[ing] any character of work or service," or "contract[ing] to supply services or things."10 Moreover, a plaintiff who brings a cause of action fitting under the long-arm statute against a registered foreign corporation need not use cumbersome means of service of process, but instead can serve the foreign corporation's registered agent, as contemplated in the long-arm statute.11

We believe Sternberg's more far-reaching interpretation of § 376 collides directly with the U.S. Supreme Court's holding in Daimler, and subjects § 376 to invalidation. In our republic, it is critical to the efficient conduct of business, and therefore to job- and wealth-creation, that individual states not exact unreasonable tolls simply for the right to do business. Businesses select their states of incorporation and principal places of business with care, because they know that those jurisdictions are in fact "home" and places where they can be sued generally.12 An incentive scheme where every state can claim general jurisdiction over every business that does any business within its borders for any claim would reduce the certainty of the law and subject businesses to capricious litigation treatment as a cost of operating on a national scale or entering any state's market.13 Daimler makes plain that it is inconsistent with principles of due process to exercise general jurisdiction over a foreign corporation that is not "essentially at home" in a state for claims having no rational connection to the state.14 The foreign corporation in this case does not have its principal place of business in Delaware; nor is there any other plausible basis on which Delaware is essentially its home. Hence, Delaware cannot exercise general jurisdiction over it consistent with principles of due process. Furthermore, the plaintiffs concede that they cannot establish specific jurisdiction over the nonresident defendant under the long-arm statute or principles of due process. Therefore, the plaintiffs' claim must be dismissed for lack of personal jurisdiction. Accordingly, we reverse the Superior Court's judgment.

II. BACKGROUND15

The personal jurisdiction issue before us arises out of claims for wrongful exposure to asbestos. The plaintiffs-appellants, Ralph and Sandra Cepec, are residents of Georgia. The seven defendants are companies associated with the manufacture, distribution, or installation of products containing asbestos. One of the defendants is Genuine Parts Company. Between approximately 1988 and 1991, Ralph worked for Genuine Parts in a warehouse in Jacksonville, Florida.

In 2015, the Georgia plaintiffs sued the defendants in Delaware. Five of the seven defendants are Delaware corporations. Genuine Parts, however, is a Georgia corporation whose principal place of business is in Atlanta. That is, Genuine Parts is, like the Cepecs, at home in Georgia, not in Delaware. Nationally, Genuine Parts is known for operating NAPA auto-parts stores. It has never had a corporate office in Delaware, does not conduct its board or shareholder meetings in this state, and does not have any officers here. According to Genuine Parts, fewer than 1% of its employees work in Delaware, fewer than 1% of its auto-parts stores are here, and less than 1% of its revenue comes from our state. Genuine Parts is properly registered to do business in Delaware under § 371 and has a designated agent for service of process in Wilmington in accordance with § 376.

In their complaint, the Cepecs allege that Genuine Parts acted negligently, willfully and wantonly, and with reckless indifference to Ralph's health and safety by wrongfully exposing Ralph to asbestos during the three years that he worked for the company in Florida, which, combined with other asbestos exposure, caused him to develop malignant mesothelioma and other asbestos-related ailments. They also pled that Genuine Parts "is a foreign corporation doing business in the state of Delaware whose registered agent for service of process is: The Corporation Trust Company."16

On June 30, 2015, Genuine Parts moved to dismiss the claims against it for lack of general and specific personal jurisdiction. In response, the Cepecs did not argue that our Superior Court had specific jurisdiction over Genuine Parts under the long-arm statute,17 but argued that Genuine Parts had consented to Delaware's general jurisdiction by registering to do business in this state and appointing an in-state agent for service of process.

In its August 31, 2015 order denying Genuine Parts' motion to dismiss, the Superior Court agreed with the Cepecs' position that Genuine Parts had consented to general jurisdiction in Delaware merely by complying with § 376.18 In reaching that result, the Superior Court relied on this Court's decision in Sternberg. Although the Superior Court did not discuss Sternberg in its order, it expressly incorporated its analysis from an oral ruling and an order on a motion for reargument for a different case, where the court explained in greater detail that it was persuaded to adhere to Sternberg by three decisions from the U.S. District Court for the District of Delaware issued after Daimler, which determined that "express consent — by registering to do business in a state in accordance with state statutes — remains a valid basis for personal jurisdiction."19 Because the Superior Court based its finding of general jurisdiction over Genuine Parts on a theory of express consent, it did not conduct a due-process inquiry. Genuine Parts submitted an interlocutory appeal of the Superior Court's ruling, which we accepted.

III. DISCUSSION AND ANALYSIS

We review the Superior Court's denial of Genuine Parts' motion to dismiss for lack of personal jurisdiction de novo.20

A. Basic Principles Of Personal Jurisdiction

Personal jurisdiction refers to the court's power over the parties in the dispute.21 There are two bases a state can use to exercise personal jurisdiction over a nonresident defendant. The first is general jurisdiction, which grants authority to a state's courts to "assert[] jurisdiction over a nonresident defendant on the basis of wholly unrelated contacts with the forum."22 This all-purpose jurisdiction exists where a corporation's "continuous corporate operations within a state [are] so substantial and of such a nature as to justify suit against it on causes of action arising from dealings entirely distinct from those activities."23 Until recently, a foreign corporation could be subject to general jurisdiction if it had "continuous and systematic" business contacts in the forum state.24 That is, merely doing business in a state was a basis for general jurisdiction there. But as we will later discuss, two recent decisions of the U.S. Supreme Court established that that is no longer enough. Courts can also exercise specific jurisdiction over a corporate defendant where the "suit aris[es] out of or relate[s] to the [corporation's] contacts with the forum."25

Further, "[b]ecause the requirement of personal jurisdiction represents first of all an individual right, it can, like other such rights, be waived."26 And "[b]ecause the personal jurisdiction requirement is a waivable right, there are a `variety of legal arrangements' by which a litigant may give `express or implied consent to the personal jurisdiction of the court.'"27

B. Delaware's Registration Statutes

To understand this dispute, the Delaware statutes upon which the Cepecs rely for their contention that Genuine Parts is subject to Delaware's general jurisdiction must be understood. Critical to their argument is this Court's 1988 Sternberg decision, which first interpreted Delaware's statute for service of process on a foreign corporation's registered agent as conferring general jurisdiction over the corporation. We therefore begin by discussing the registration statutes that Genuine Parts was required to comply with as the cost of doing any business in Delaware, and the context in which Sternberg interpreted them as a basis for general jurisdiction.

To legally do any business in our state, Genuine Parts first had to comply with § 371, which provides in relevant part that:

Genuine Parts also had to agree to have its registered in-state agent accept service of process on its behalf under § 376, which provides in relevant part that:

In addition to §§ 371 and 376, the Sternberg Court's analysis of whether compliance with those statutes conferred general jurisdiction over a foreign corporation involved comparing them to the statutes that apply to foreign corporations that have not registered to do business in Delaware, §§ 382 and 383.

Section 382 provides in pertinent part that:

And under § 383, unqualified foreign corporations are required to pay certain fees and penalties before maintaining any action or special proceeding in Delaware:

Those four statutes served as the basis for the Sternberg Court's holding that the defendant foreign corporation consented to Delaware's general jurisdiction by registering to do business in Delaware and appointing an in-state agent for service of process.32

We also note a fifth statute that was not addressed in Sternberg, § 381, which provides that once a registered foreign corporation withdraws its registration, its appointment of a designated agent for service of process "shall be revoked, and the corporation shall be deemed to have consented that service of process in any action, suit or proceeding based upon any cause of action arising in this State, during the time the corporation was authorized to transact business in this State, may thereafter be made by service upon the Secretary of State."33

And although Delaware's long-arm statute, § 3104, was not a part of the analysis in Sternberg, it informs our construction of the registration statutes today. The long-arm statute provides in pertinent part that:

C. Sternberg's Interpretation Of Delaware's Registration Statutes

Our prior decision in Sternberg is heavily relied upon by the Cepecs to argue that Genuine Parts is subject to Delaware's general jurisdiction, so an understanding of what was at stake in that decision and what it held is also critical to our analysis of the core question at issue on this appeal. In Sternberg, this Court interpreted § 376 as conferring general jurisdiction over a registered foreign corporation via express consent.35 But, it is important to view that holding in the context of the rest of the decision. In Sternberg, a stockholder of an Ohio parent corporation brought a double-derivative suit against the corporation, claiming that it was mismanaging its wholly owned Delaware subsidiary — i.e., breaching fiduciary duties it allegedly owed as a result of acting as a controlling stockholder of a Delaware corporation.36 On appeal from the Court of Chancery's dismissal of the complaint, this Court analyzed whether Delaware had personal jurisdiction over the nonresident parent company whose affiliations with our state consisted of managing its Delaware subsidiary for over thirty years, and whose management of the Delaware corporation was the central issue in the dispute.37 So Sternberg was about the internal affairs of one of our corporate residents and its relationship with its parent corporation — issues that turned on an application of Delaware corporate law.

On those facts, this Court found two alternative bases for personal jurisdiction over the Ohio parent corporation. Its first ruling, and the one the Cepecs rely on to press their position, is that the foreign corporation consented to the exercise of general jurisdiction by the Delaware courts when it qualified to do business in this state and appointed an in-state agent for service of process, in accordance with Delaware's registration statutes.38 In so ruling, Sternberg adopted a reading given to § 376 by our U.S. District Court in D'Angelo v. Petroleos Mexicanos,39 and relied on a line of federal case law, including Neirbo Co. v. Bethlehem Shipbuilding Corp.40 and Pennsylvania Fire Insurance Co. of Philadelphia v. Gold Issue Mining & Milling Co.,41 which held that a foreign corporation that appoints an agent to receive service of process on its behalf in compliance with a state registration statute thereby consents to general jurisdiction in the state.42 To wit, the Neirbo Court held that "[a] statute calling for [the] designation [of an in-state agent for service of process] is constitutional, and the designation of the agent [is] `a voluntary act[]'" that constituted "actual consent" to general jurisdiction in the state.43 Based on the reasoning of those cases, Sternberg made an interpretative choice to construe § 376 as a basis for express consent to Delaware's general jurisdiction and to conclude that there was no due-process problem with that construction.44 In the alternative, this Court held that the Ohio parent corporation "intentionally established and maintained minimum contacts with Delaware by its decision to continue to operate its wholly owned subsidiary ... as a Delaware corporation."45

Sternberg's holding that a foreign corporation expressly consents to general jurisdiction by agreeing to have its designated in-state agent accept service of process has been the law in Delaware since the late 1980s. But two recent U.S. Supreme Court decisions, Goodyear and Daimler, made a major shift in our nation's personal jurisdiction jurisprudence — a shift that undermines the key foundation upon which prior federal cases like Neirbo and Pennsylvania Fire relied.

D. Goodyear And Daimler Set Due-Process Limits On States' Exercise Of General Jurisdiction Over Non-Residents

The first recent case to cast doubt on the idea that a state could require a foreign corporation — as a mere price of doing any business in a state in our fifty-state republic — to be subject to its general jurisdiction for any claim, however unrelated to its activities in the forum state, was the U.S. Supreme Court's 2011 Goodyear decision. The sad circumstances that led to that case involved the death of two teenage boys in a bus accident outside of Paris, France.46 The boys' parents, who were residents of North Carolina, filed suit in North Carolina against tire manufacturer Goodyear USA and three of Goodyear's indirect European subsidiaries.47 Goodyear was an Ohio corporation and the three foreign subsidiaries were organized and based in France, Turkey, and Luxembourg.48 The plaintiffs alleged that the accident was caused by a defective tire that was manufactured at the plant of Goodyear's Turkish subsidiary.49 Goodyear did not contest North Carolina's personal jurisdiction over it,50 but the foreign subsidiaries argued that they were not subject to the state's general jurisdiction.51 The North Carolina Court of Appeals found that North Carolina had general jurisdiction over the foreign subsidiaries because some of the tires the subsidiaries manufactured had reached North Carolina through "the stream of commerce."52 It was undisputed that the type of tire involved in the accident was not distributed in North Carolina.53

In considering whether the defendants were subject to general jurisdiction in North Carolina, the U.S. Supreme Court explained that "[a] court may assert general jurisdiction over foreign (sister-state or foreign-country) corporations to hear any and all claims against them when their affiliations with the State are so `continuous and systematic' as to render them essentially at home in the forum State."54 The Court also stated that "[t]he Due Process Clause of the Fourteenth Amendment sets the outer boundaries of a state tribunal's authority to proceed against a defendant."55

The U.S. Supreme Court then found that "the North Carolina court's stream-of-commerce analysis elided the essential difference between case-specific and all-purpose (general) jurisdiction."56 The Court further explained that "[f]low of a manufacturer's products into the forum ... may bolster an affiliation germane to specific jurisdiction.... But ties serving to bolster the exercise of specific jurisdiction do not warrant a determination that, based on those ties, the forum has general jurisdiction over a defendant."57 It also stated that "[a] corporation's `continuous activity of some sorts within a state,' International Shoe instructed, `is not enough to support the demand that the corporation be amenable to suits unrelated to that activity.'"58 The Court thus concluded that Goodyear's foreign subsidiaries "are in no sense at home in North Carolina" and that "[t]heir attenuated connections to the State fall far short of the `the continuous and systematic general business contacts' necessary to empower North Carolina to entertain suit against them on claims unrelated to anything that connects them to the State."59

Goodyear's logic was followed in a number of federal personal jurisdiction cases,60 the most important of which was the U.S. Supreme Court's own 2014 Daimler decision. In Daimler, the Court confirmed that "only a limited set of affiliations with a forum will render a defendant amenable to all-purpose jurisdiction there."61 Daimler involved another set of sad facts. Twenty-two Argentine residents filed suit in California against a German car manufacturer based in Stuttgart, DaimlerChrysler Aktiengesellschaft, alleging that Daimler's Argentine subsidiary "collaborated with state security forces to kidnap, detain, torture, and kill" Argentine residents who worked for the subsidiary, including certain plaintiffs and plaintiffs' relatives, during a period of military dictatorship known as Argentina's "Dirty War."62 The plaintiffs sought to establish personal jurisdiction over Daimler in California based on one of Daimler's other subsidiaries, which was incorporated in Delaware and had its principal place of business in New Jersey, but distributed Daimler-manufactured cars throughout the United States and California.63

In its discussion of the history of personal jurisdiction, the Daimler Court acknowledged its "post-International Shoe opinions on general jurisdiction" and noted that Perkins v. Benguet Consolidated Mining Co.64 "`remains the textbook case of general jurisdiction appropriately exercised over a foreign corporation that has not consented to suit in the forum.'"65 Then in the heart of its analysis, the U.S. Supreme Court confirmed that the proper inquiry for general jurisdiction under Goodyear "is not whether a foreign corporation's in-forum contacts can be said to be in some sense continuous and systematic, it is whether that corporation's affiliations with the State are so continuous and systematic as to render [it] essentially at home in the forum State."66 The Court noted that the "paradigm" fora for general jurisdiction over a corporation are its place of incorporation and its principal place of business because those affiliations are "unique" and "easily ascertainable."67 But it also acknowledged that general jurisdiction might, "in an exceptional case," be proper outside of those one or two places where the corporation's operations are "so substantial and of such a nature as to render the corporation at home in that State."68 The Court added that "[i]t is one thing to hold a corporation answerable for operations in the forum State, quite another to expose it to suit on claims having no connection whatever to the forum State."69

Importantly, the Daimler Court rejected the plaintiffs' argument that a corporation is subject to general jurisdiction in every state in which it "engages in a substantial, continuous, and systematic course of business," calling that position "unacceptably grasping."70 The Court observed that "such exorbitant exercises of all-purpose jurisdiction would scarcely permit out-of-state defendants `to structure their primary conduct with some minimum assurance as to where that conduct will and will not render them liable to suit.'"71 The Court also made clear that "[a] corporation that operates in many places can scarcely be deemed at home in all of them. Otherwise, `at home' would be synonymous with `doing business' tests framed before specific jurisdiction evolved in the United States."72

Against this background of U.S. Supreme Court decisions, we consider the general jurisdiction issues argued by the parties in this appeal.

E. The Parties' Contentions

The parties' disagreement over the effect Daimler has on the ability of states to condition a foreign corporation's right to do business in the state on being subject to general jurisdiction frames the issue before us. Genuine Parts contends that it would be inconsistent with Daimler's due-process restrictions on general jurisdiction to maintain that a foreign corporation can be subject to Delaware's general jurisdiction simply by registering to do business here and appointing an in-state agent for service of process. Genuine Parts thus asks us to overrule that aspect of Sternberg. Genuine Parts also argues that Delaware's registration statutes do not state, imply, or in any way give notice that the foreign corporation consents to general jurisdiction in Delaware by complying with them.

The Cepecs counter that Sternberg remains good law because Daimler did not overrule U.S. Supreme Court cases including Neirbo and Pennsylvania Firethat held that consent by registration is an independent and valid basis for general jurisdiction.73 They also argue, based on those decisions, that the minimum-contacts analysis does not apply when a defendant has consented to jurisdiction. To support their position, the Cepecs point out that the Daimler Court acknowledged that Perkins exemplifies a case in which general jurisdiction was proper based on the foreign corporation's contacts with the forum state, even though the foreign corporation did not consent to it. They argue that the Court was thus mindful of its prior cases — in which general jurisdiction was based on consent — without overruling that precedent, which suggests that the Court did not intend Daimler to affect consent-based general jurisdiction. Finally, the Cepecs contend that because § 376 provides no limits on the authority of a foreign corporation's registered agent to accept service of process for the corporation, that statute confers general jurisdiction over the nonresident corporation, which is the reading that this Court gave to § 376 in Sternberg.

F. Personal Jurisdiction In Today's Economy

The Goodyear and Daimler decisions have generated many potted histories of the complicated origins of personal jurisdiction jurisprudence as it relates to foreign corporations. We do not believe it productive or necessary to engage in a redundant recitation of our own, given the proliferation of excellent summaries.74 Suffice it to say we no longer live in a time where foreign corporations cannot operate in other states unless they somehow become a resident;75 nor do we live in a time when states have no effective bases to hold foreign corporations accountable for their activities within their borders.76 As importantly, we have long ago become a truly national — even international — economy, and the ability of foreign corporations to operate effectively throughout our nation is critical to our nation's economic vitality and ability to create jobs.

It is in the context of this global economy that the U.S. Supreme Court issued its rulings in Goodyear and Daimler. In these cases, the Court made clear that it is inconsistent with principles of due process for a corporation to be subject to general jurisdiction in every place it does business.77 In light of that guidance, we are now faced with whether Sternberg's interpretation of our registration statutes as conferring general jurisdiction over the foreign corporation remains tenable.

G. Revisiting Sternberg In Light of Daimler

Sternberg involved a careful and accurate recitation of the U.S. Supreme Court's personal jurisdiction jurisprudence before Goodyear and Daimler. Although that jurisprudence's continued viability was the subject of scholarly debates as of the time of Sternberg,78 the U.S. Supreme Court had yet to cast such serious doubt on the underlying principles of long-standing cases like Pennsylvania Fire and Neirbo. Thus, at the time of Sternberg, it was still tenable to rely on those cases for the principle that a state could exercise general jurisdiction over a foreign corporation that complied with a state registration statute without a separate minimum-contacts analysis under the Due Process Clause.

It was against that backdrop that Sternberg read § 376 broadly as providing a basis for general jurisdiction, consistent with an earlier decision of the U.S. District Court for the District of Delaware.79 But notably absent from that prior District Court decision was any reference to explicit statutory language in § 376 that suggested that by registering under § 371 and designating an in-state agent for service of process, the foreign corporation was thereby consenting to the general personal jurisdiction of Delaware.80 In fact, unlike the long-arm statute, § 3104, which speaks of personal jurisdiction explicitly, § 376 provides only that a qualified foreign corporation's designated agent can be served with "[a]ll process issued out of any court of this State [and] all orders made by any court of this State...."81

Although it is possible, as Sternberg did, to read the concept of general jurisdiction into § 376 because it provides for a broad consent to service of process on the foreign corporation's registered agent, it is also possible to give that statute a narrower and constitutionally unproblematic reading.82 That reading would be tied into the statute itself, and the conditions that require registration in the first instance. Under § 371, in order to "do any business in this State, through or by branch offices, agents or representatives located in this State,"83 a foreign corporation must file a statement with the Secretary of State setting forth, among other things, its designated in-state agent, "the business it proposes to do in this State, and a statement that it is authorized to do that business in the jurisdiction of its incorporation."84

Further, by way of comparison, foreign corporations that do not properly register are subject to pay fees, penalties, and taxes under § 383 before they can "maintain any action or special proceeding in this State."85 But unqualified foreign corporations are subject under § 382 to service of process in Delaware through the Secretary of State only for "any civil action, suit or proceeding against [the corporation] in any state or federal court in this State arising or growing out of any business transacted by it within this State."86 Although Sternberg read this as suggesting that registered corporations must therefore be subjecting themselves to general jurisdiction by registering because § 376 did not have similar language, that gloss is only a possible one. Another is that the explicit reference to suits "arising or growing out of any business transacted by it within this State"87 was intended to subject non-registered foreign corporations to equal treatment with registered ones, and described the circumstances where a corporation could be deemed by implied consent to be subject to personal jurisdiction to the same extent as a properly registered corporation. Consistent with that reading, the phrase in § 382 is a good proxy for the circumstances that, if extant, require registration under § 371.88 Section 381 makes the equal treatment point more emphatically by addressing consent and limitations on personal jurisdiction for withdrawing corporations. A withdrawing corporation is "deemed to have consented" to service of process, but only "in any action, suit or proceeding based upon any cause of action arising in this State...."89 It would therefore make sense to read § 371 as requiring that a foreign corporation have a registered agent that can accept service of process in situations when the very conduct that required registration in the first instance — such as "transact[ing] any business or perform[ing] any character of work or service," or "contract[ing] to supply services or things"90 — gives rise to a lawsuit.

That reading also fits with the long-arm statute, which explicitly provides that "[t]he term `person' in this section includes any natural person, association, partnership or corporation."91 The long-arm statute also provides in explicit terms that a foreign corporation "submits to the jurisdiction of the Delaware courts" in certain enumerated circumstances, which include when a claim arises out of the corporation doing business, or contracting to supply goods or services, in the state.92 And in the case of a registered foreign corporation, a plaintiff can effect service using § 376,93 and need not use the mailing procedure in the long-arm statute.94 If § 376 alone could serve as a basis for general jurisdiction, the specific jurisdiction provisions in the long-arm statute would apply only to foreign corporations that have not registered in the state; instead § 3104 broadly applies to "any natural person, association, partnership or corporation."95 Further, Pennsylvania, which is the only state that currently expressly provides by statute that registering to do business in the state is a sufficient basis for general jurisdiction over a foreign corporation, has set forth this consequence of registration in its long-arm statute, not its registration statute.96

A narrower reading of § 376 also avoids the perverse result of subjecting foreign corporations that lawfully do business in Delaware to an overreaching consequence — general jurisdiction — that does not apply to foreign corporations that do business in Delaware without properly registering and are only subject to specific jurisdiction in Delaware under § 382.97 The same perverse result would occur with withdrawing corporations under § 381.98 When a narrower reading is given to § 376 and that statute is read in concert with § 3104, foreign corporations that properly registered or that wish to withdraw registration in Delaware are given equitable treatment with scofflaws, not harsher treatment. That narrower reading also makes sense of both § 3104 and § 371, because § 371 requires a foreign corporation that engages in certain categories of business in Delaware to register and appoint an agent for service of process.99 Working in tandem, § 3104 thus provides for personal jurisdiction over registered businesses when causes of action arise out of their activities in Delaware, with plaintiffs being able to use the registered agent designated under § 371 as the recipient of process in accordance with § 376 and § 3104(k).100

Most important of all, after Goodyear and Daimler, this narrower reading of § 376 has the intuitively sensible effect of not subjecting properly registered foreign corporations to an "unacceptably grasping" and "exorbitant" exercise of jurisdiction, consistent with Daimler's teachings.101 Under a broad reading of § 376, any foreign corporation seeking to sell any product or provide any service in Delaware must, as a price to doing so lawfully, be deemed to have consented to Delaware exercising general jurisdiction over it — i.e., to Delaware exercising jurisdiction in cases having nothing at all to do with the foreign corporation's activities in or even directed to Delaware. Nothing in the text of § 376 compels such a broad reading of that statute.

For present purposes, however, what is most important is not whether Sternberg was somehow incorrect; the question is how § 376 should be interpreted in this case. The reality is that Sternberg's ruling on § 376 was not necessary to the resolution of the case because the Court also found that the foreign corporation had sufficient minimum contacts with Delaware through owning and managing its Delaware subsidiary for over thirty years to provide a constitutional basis for specific jurisdiction.102 The other reality is that Sternberg's construction of § 376 was strongly influenced by prior U.S. Supreme Court jurisprudence whose dependability has been undermined by Daimler.103

Our duty is to construe a statute of our state in a manner consistent with the U.S. Constitution, when it is possible to do so with no violence to its plain meaning.104 Nothing in the registration statutes explicitly says that a foreign corporation registering thereby consents to the personal jurisdiction of this state.105 Nothing in the statutes explicitly says that by having to register in order to "do any business in this State, through or by branch offices, agents or representatives located in this State,"106 and to appoint a registered agent in the state to receive service of process, that meant a foreign corporation was waiving any objection to personal jurisdiction for causes of action not arising out of the conduct in Delaware that gave rise to the registration requirement.

In light of Daimler, § 376 can be given a sensible reading by construing it as requiring a foreign corporation to allow service of process to be made upon it in a convenient way in proper cases, but not as a consent to general jurisdiction. Rather, a foreign corporation would have the protection of the Due Process Clause if a plaintiff tried to use § 376 by suing the corporation for a cause of action that was not addressed by the long-arm statute, which, among other things, essentially tracks the circumstances that require registration under § 371.

By this reading, plaintiffs with a fair basis to subject a foreign corporation to suit in Delaware may do so, but plaintiffs who do not will not. This reading accords with Daimler and common sense. Delaware is a state of fewer than one million people.107 Our citizens benefit from having foreign corporations offer their goods and services here. If the cost of doing so is that those foreign corporations will be subject to general jurisdiction in Delaware, they rightly may choose not to do so.

Moreover, in our federal republic, exacting such a disproportionate toll on commerce is itself constitutionally problematic.108 Such an exercise of overreaching by Delaware will also encourage other states to do the same. Every state in the union, and the District of Columbia, has enacted a registration statute that requires foreign corporations to register to do business and appoint an in-state agent for service of process.109 As the home of a majority of the United States' largest corporations, Delaware has a strong interest in avoiding overreaching in this sensitive area.110 If all of our sister states were to exercise general jurisdiction over our many corporate citizens, who often as a practical matter must operate in all fifty states and worldwide to compete, that would be inefficient and reduce legal certainty for businesses. Human experience shows that "grasping"111 behavior by one, can lead to grasping behavior by everyone, to the collective detriment of the common good. It is one thing for every state to be able to exercise personal jurisdiction in situations when corporations face causes of action arising out of specific contacts in those states; it is another for every major corporation to be subject to the general jurisdiction of all fifty states. Theoretically, under the Cepecs' position, major Delaware public corporations with national markets could be sued by its stockholders on an internal affairs claim in any state in the nation because the corporations have had to register to do business in every state. And in fact, many post-Daimler decisions involved situations where plaintiffs sought to subject a Delaware corporation to the general jurisdiction of a state that had no relation to the cause of action and was not the corporation's principal place of business.112 Daimler rejected the notion that a corporation that does business in many states can be subject to general jurisdiction in all of them.113 Under a sensible goose-and-gander approach, Delaware should be prudent and proportionate in exercising jurisdiction over foreign corporations, and a narrower reading of § 376 accomplishes that.114

H. The Tension Created By Daimler's Due-Process Limits On General Jurisdiction Cannot Be Ignored

We acknowledge that some courts have maintained in Daimler's wake that implied consent by virtue of simple registration to do business remains a constitutionally valid basis for general jurisdiction over a nonresident corporation.115 Our own U.S. District Court, for example, has split on this issue.116 Two conflicting Delaware District Court decisions were recently addressed by the U.S. Court of Appeals for the Federal Circuit on interlocutory appeal, but the majority of the panel declined to address the issue of general jurisdiction.117 One of the three judges, however, concurred in the judgment but wrote separately to express his view that the defendant was subject to Delaware's general jurisdiction by virtue of having registered to do business in our state on the ground that "Daimler did not overrule the line of Supreme Court authority establishing that a corporation may consent to jurisdiction over its person by choosing to comply with a state's registration statute."118 But, the majority of federal courts that have considered the issue of whether consent by registration remains a constitutional basis for general jurisdiction after Daimler have taken the position that we adopt.119

The decisions that have read Daimler differently than we do stress that Daimler did not reach out and explicitly overrule older precedent in stark tension with its reasoning.120 But, that reality does nothing to relieve that tension, or to obscure another reality, which is that the older case law was rooted in an era where foreign corporations could not be sued in other states unless there was some fictional basis to find them present there.121 And to give some credit to our predecessor generations, plaintiffs typically did not sue defendants in fora that had no rational relation to causes of action; the increasing embrace of that practice among segments of the plaintiffs' bar has instead built over recent decades.122

Some of the decisions that suggest that Daimler does not prevent states from exacting general jurisdiction as a price for merely doing business also confuse two issues that are, in our view, fundamentally distinct. These cases suggest that if states cannot condition a foreign corporation's right to do business on consent to general jurisdiction, that it therefore logically follows that parties cannot rely in commerce on the enforceability of forum-selection clauses that provide explicitly for a consent to personal jurisdiction.123 Candidly, we view these as distinct categories. In the first case, the argument is that a business somehow must agree to being subject to general jurisdiction in every state in our nation, as a condition to doing business nationally. Daimler's reasoning indicates that such a grasping assertion of state authority is inconsistent with principles of due process, and impliedly, with interstate commerce.124 Moreover, a foreign corporation's consent to personal jurisdiction cannot be coerced or conditioned on the corporation waiving its right not to be subject to all-purpose jurisdiction in all but a few places where it has sufficient contacts.125 By contrast, nothing in Daimler is at all in tension with the traditional idea that a party to a non-adhesion contract can subject itself to personal jurisdiction via a forum-selection clause.126 Notably, in M/S Bremen v. Zapata Off-Shore Co.,127 the U.S. Supreme Court held that a forum-selection clause in a freely negotiated agreement is "prima facie valid and should be enforced unless enforcement is shown by the resisting party to be `unreasonable' under the circumstances" where there was "strong evidence that the [] clause was a vital part of the agreement."128 Of equal note is the reality that forum-selection clauses almost always involve parties being subject to personal jurisdiction in the chosen forum over a particular class of claims — that is, they involve consent to specific jurisdiction as to the claims outlined in the agreement.129 Daimler does not suggest that this traditional avenue of consent to personal jurisdiction is no longer viable.

IV. CONCLUSION

In light of the U.S. Supreme Court's clarification of the due-process limits on general jurisdiction in Goodyear and Daimler, we read our state's registration statutes as providing a means for service of process and not as conferring general jurisdiction. Accordingly, we reverse the Superior Court's judgment that denied Genuine Parts' motion to dismiss the claims against it for lack of personal jurisdiction.

VAUGHN, Justice, dissenting:

I agree with those federal judicial officers who have concluded that Daimler and Goodyear have no effect upon general jurisdiction that is based upon consent through corporate registration statutes.130 Daimler and Goodyear involved only general jurisdiction by presence where the corporate defendant had not consented to jurisdiction. Just last month, a circuit court judge of the Federal Circuit wrote in a concurring opinion mentioned by the Majority that "Daimler did not overrule the line of Supreme Court authority establishing that a corporation may consent to jurisdiction over its person by choosing to comply with a state's registration statute."131 The case originated in Delaware and the opinion concluded that Sternberg itself remains good law. I fully agree with the reasoning of that concurring opinion and see no need to duplicate it here.

It may be that the United States Supreme Court will go in the same direction as the Majority. But we won't know until it gets there. I would not divest the trial courts of this state of significant jurisdiction unless I was sure I was right, and I am not sure the Majority is right. I would affirm the judgment of the Superior Court.