Professor Brittney Lane Kubisch, Corporate Presence and the Lost Logic of Territorial Jurisdiction -- Northwestern University Law Review (forthcoming)

Professor Brittney Lane Kubisch's article, Corporate Presence and the Lost Logic of Territorial Jurisdiction, will be published in the Northwestern University Law Review. The article considers two means of subjecting corporations to jurisdiction under Pennoyer v. Neff.

Abstract of Corporate Presence and the Lost Logic of Territorial Jurisdiction

Some on the Supreme Court have raised the possibility of reviving Pennoyer’s territorial rules of personal jurisdiction.  But this revival faces a significant obstacle.  The conventional wisdom is that Pennoyer failed because it could not be adapted to modern, multistate corporations.

This Article challenges that view.  In reality, states had two well-established means of subjecting corporations to jurisdiction under Pennoyer. Under one method, they subjected in-state corporate property to claims against the corporation. And under the other, they conditioned in-state corporate operations on consent to jurisdiction.

The theory behind the latter method is not well understood, but only because modern lawyers have lost the logic of nineteenth-century private rights’ classifications. Under that logic, incorporation was a franchise—or legislatively crafted privilege—that could come with conditions. Coupled with the accepted view that law was territorially limited, and thus that corporations needed each state to extend comity to their franchise, this logic allowed legislatures to extract corporate consent to jurisdiction by making it a mandatory condition of corporate recognition.

Under these rules, corporations could be sued wherever they operated.  Narrow corporate jurisdiction was thus not a fact of the original framework, but a consequence of Lochner-era judicial tampering. International Shoe attempted to course-correct, but wrongly doubled down on the idea that jurisdictional rules should be judicially defined. Courts should reconsider the alternative solution—returning to Pennoyer’s legislative framework—as it better aligns with civil procedure’s goals of speed and efficiency and respects the Constitution’s preference for federalism and political accountability.