Insight

Delaware Strengthens Jurisdictional Defenses for Foreign Corporations Registered to Do Business in Delaware

Delaware Strengthens Jurisdictional Defenses for Foreign Corporations Registered to Do Business in Delaware

Christian Singewald

Christian Singewald

May 9, 2019 10:09 AM

By: Christian Singewald, Timothy Martin and Randall MacTough

The days of companies being sued in Delaware based solely upon their compliance with Delaware’s registration statutes appear over. Recently, the Delaware Supreme Court, in Genuine Parts Co. v. Cepec[1], held that Delaware Courts cannot exercise jurisdiction over a foreign corporation registered to do business in Delaware for claims unrelated to its conduct in Delaware.

In Delaware, foreign corporations must register to do business and designate a registered agent in Delaware to accept service of process to sell its products or services.[2] Since 1988, Delaware has construed these registration laws as foreign corporations’ express consent to general jurisdiction.[3]

Two recent United States Supreme Court cases, however, called into question this well-established law. In Goodyear Dunlop Tires Operations, S.A. v. Brown, the U.S. Supreme Court reiterated the principle that a foreign corporation’s affiliations with a state must be “continuous and systematic” for a forum to exercise general jurisdiction over the foreign corporation.[4] The Court in Goodyear held that a foreign corporation was not subject to general jurisdiction in the forum simply because some of its products were distributed and sold there.[5] More recently, in Daimler AG v. Bauman, the Court held “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.’”[6] It further opined that corporations with operations “in many places can scarcely be deemed at home in all of them.”[7] In short, in Goodyear and Daimler, the U.S. Supreme Court acknowledged that it is inconsistent with the principles of due process to subject a corporation to general jurisdiction in every state it conducts business.[8]

In accordance with the due process principles applied in Goodyear and Daimler, the Delaware Supreme Court held in Cepec that Delaware’s registration laws no longer create the presumption that a foreign corporation consents to jurisdiction by complying with Delaware’s registration statutes.[9] Cepec arose out of claims for wrongful exposure to asbestos-containing products manufactured by several defendants, including Genuine Parts Company, a Georgia corporation with its principal place of business in Georgia.[10] Plaintiff alleged he was exposed to asbestos in Florida while an employee at Genuine Parts.[11] Although Plaintiff’s allegations against Genuine Parts are unrelated to Delaware and Genuine Parts is merely registered to do business in Delaware, the Delaware Superior Court held that it had general jurisdiction over Genuine Parts because it consented to jurisdiction by appointing a registered agent in Delaware to receive service of process.[12]

Adhering to Goodyear and Daimler, the Delaware Supreme Court reversed the Superior Court’s decision by construing the statute requiring the designation of a registered agent in Delaware more narrowly than it had in Sternberg.[13] The Court found such a broad reading of the registered agent statute to be inconsistent with due process principals confirmed in Daimler.[14] The “sensible” reading is that this statute merely requires foreign corporations to “allow service of process to be made upon it in a convenient way in proper cases, but not as consent to jurisdiction.”[15] In other words, a foreign corporation cannot be subjected to a lawsuit in Delaware until a plaintiff shows that the long-arm statute applies or jurisdiction does not violate its due process.[16] In support of its holding, the Court opined that such a broad reading may cause foreign corporations to halt offering their goods and services to the citizens of Delaware to avoid being hauled into court for claims unrelated to Delaware.[17] The Court further noted if Delaware were to overreach to assert general jurisdiction over foreign corporations, then other states may do the same which would cause inefficiency and legal uncertainty for businesses.[18]

With these policy concerns in mind, the Delaware Supreme Court altered its general jurisdiction jurisprudence to insulate foreign corporations registered to do business in Delaware from claims unrelated to its activities in Delaware. As a result, no longer can a foreign corporation be sued in Delaware in a matter unrelated to Delaware only because the corporation is licensed to do business in Delaware.

For more information regarding this decision, or for a copy of the Court’s Order, please contact Chris Singewald (302.467.4510 | singewaldc@whiteandwilliams.com), Tim Martin (302.467.4509 | martint@whiteandwilliams.com) or Randall MacTough (302.467.4528 | mactoughr@whiteandwilliams.com).

Related Articles

Delware Overhauls Corporate Law to Stem 'DExit'


by Bryan Driscoll

How Businesses and Lawyers Can Stay Sharp, Current and Prepared.

Delaware lawyer reading about the Senate Bill 21

Pribanic Secures Milestone Verdict in Rural PA County


by Justin Smulison

Ten-time honoree Victor H. Pribanic secured one of 2023’s most notable verdicts in a Pennsylvania county that historically has not been empathic to plaintiffs.

Lawyer sitting at desk with notepad and laptop

IN PARTNERSHIP

The Immeasurable Impact of Advocacy


by Justin Smulison

Burg Simpson founder Michael S. Burg discusses how the firm’s results transcend the courtroom to improve life for consumers and professionals nationwide.

Lawyer posing in a checker suit

We Are Women, We Are Fearless


by Deborah S. Chang and Justin Smulison

Athea Trial Lawyers is a female owned and operated law firm specializing in civil litigation, catastrophic energy, wrongful death and product liability.

Athea Trial Law Female Leadership and Success

Adoption of “Emergency Bylaws” Continues


by Shenna Johnson and David Clark

The disruption to businesses stemming from the COVID-19 pandemic that took hold in 2020 prompted renewed focus on corporate governance under emergency conditions.

Emergency Bylaws in Delaware

Catastrophic Personal Injury


by Best Lawyers

Trial legend Frank Branson finds success mixing technology and new skills with vast courtroom experience.

Catastrophic Personal Injury

Engineered for Success


by Justin Smulison

Koskoff’s product-liability leader, Bill Bloss, explains how his group combines legal knowledge with engineering insight for the benefit of their clients—and future consumers as well

Bill Bloss Best Lawyers 2020

A Cohesive Team


by Best Lawyers

How Bentley & More LLP Combined Forces

A Cohesive Team

Media Tips in a High-Profile Case


by Gregory G. Rizio

How an Attorney Can Successfully Work With the Press

Media Tips in a High-Profile Case

A Warrior for Clients


by Best Lawyers

Michael P. Lyons stands up.

Lyons Roaring Through Complex Disputes

Unlocking an Auto Product Safety Mystery


by Best Lawyers

After a rear-end collision left their two young children with severe head injuries, the Reavis family had many questions and no one to turn to for help.

Frank L. Branson Toyota Payout

E-Scooters: Spontaneous Fun or Serious Danger?


by Linda J. Chalat

Reports of serious injury raise questions over the legality of electric scooters—even as ridership grows.

Are E-Scooters Legal in Colorado?

Roundup, Dangerous Products


by Joseph Fantini

In recent years, there’s been a significant increase in product liability lawsuits filed in California.

Dangerous Products in California

Rebuilding Faith in the Legal System


by Margo Pierce

Burg Simpson lawyers discuss what drives them to fight for consumers and significant cases in their consumer advocacy.

Burg Simpson's Legal Strategy

Trending Articles

Introducing the 2026 Best Lawyers Awards in Australia, Japan, New Zealand and Singapore


by Jennifer Verta

This year’s awards reflect the strength of the Best Lawyers network and its role in elevating legal talent worldwide.

2026 Best Lawyers Awards in Australia, Japan, New Zealand and Singapore

Revealing the 2026 Best Lawyers Awards in Germany, France, Switzerland and Austria


by Jamilla Tabbara

These honors underscore the reach of the Best Lawyers network and its focus on top legal talent.

map of Germany, France, Switzerland and Austria

Effective Communication: A Conversation with Jefferson Fisher


by Jamilla Tabbara

The power of effective communication beyond the law.

 Image of Jefferson Fisher and Phillip Greer engaged in a conversation about effective communication

The 2025 Legal Outlook Survey Results Are In


by Jennifer Verta

Discover what Best Lawyers honorees see ahead for the legal industry.

Person standing at a crossroads with multiple intersecting paths and a signpost.

The Best Lawyers Network: Global Recognition with Long-term Value


by Jamilla Tabbara

Learn how Best Lawyers' peer-review process helps recognized lawyers attract more clients and referral opportunities.

Lawyers networking

Jefferson Fisher: The Secrets to Influential Legal Marketing


by Jennifer Verta

How lawyers can apply Jefferson Fisher’s communication and marketing strategies to build trust, attract clients and grow their practice.

Portrait of Jefferson Fisher a legal marketing expert

Is Your Law Firm’s Website Driving Clients Away?


by Jamilla Tabbara

Identify key website issues that may be affecting client engagement and retention.

Phone displaying 'This site cannot be reached' message

A Guide to Workers' Compensation Law for 2025 and Beyond


by Bryan Driscoll

A woman with a laptop screen reflected in her glasses

Medical Malpractice Reform Trends in Texas, Utah, Georgia and SC


by Bryan Driscoll

A fresh wave of medical malpractice reform is reshaping the law.

Medical Malpractice Reform Trends hed

Why Jack Dorsey and Elon Musk Want to 'Delete All IP Law'


by Bryan Driscoll

This Isn’t Just a Debate Over How to Pay Creators. It’s a Direct Challenge to Legal Infrastructure.

Elon Musk and Jack Dorsey standing together Infront of the X logo

Best Lawyers Launches CMO Advisory Board


by Jamilla Tabbara

Strategic counsel from legal marketing’s most experienced voices.

Group photo of Best Lawyers CMO Advisory Board members

Changes in California Employment Law for 2025


by Laurie Villanueva

What employers need to know to ensure compliance in the coming year and beyond

A pair of hands holding a checklist featuring a generic profile picture and the state of California

Common Law Firm Landing Page Problems to Address


by Jamilla Tabbara

Identify key issues on law firm landing pages to improve client engagement and conversion.

Laptop showing law firm landing page analytics

New Employment Law Recognizes Extraordinary Stress Is Everyday Reality for NY Lawyers


by Bryan Driscoll

A stressed woman has her head resting on her hands above a laptop

Best Lawyers Introduces Smithy AI


by Jamilla Tabbara

Transforming legal content creation for attorneys and firms.

Start using Smithy AI, a content tool by Best Lawyers

How to Create High-Converting Landing Pages for Your Law Firm


by Jamilla Tabbara

Learn how to create high-converting law firm landing pages that drive client engagement and lead generation.

Laptop screen displaying website tools to improve client conversion rates