Court Opinion

ID: 5116680
Source: CourtListenerOpinion
Date Created: 2021-10-07 13:08:54.498435+00
Date Added: 2024-06-11T08:21:58.459380
License: Public Domain

State of New York                                                        OPINION
Court of Appeals                                          This opinion is uncorrected and subject to revision
                                                            before publication in the New York Reports.

 No. 54
 Anna Aybar, et al.,
         Appellants,
      v.
 Jose A. Aybar, Jr., et al.,
         Defendants,
 Ford Motor Company et al.,
         Respondents;
 U.S. Tires and Wheels of Queens,
 LLC,
      Nonparty-Respondent.

 Jay L.T. Breakstone, for appellants.
 Sean Marotta, for respondent Ford Motor Company.
 Jayne Risk, for respondent The Goodyear Tire & Rubber Co.
 New York State Trial Lawyers' Association; New York State Bar Association; Alan B.
 Morrison, et al.; American Association for Justice; New York City Bar Association;
 Chamber of Commerce of the United States of America et al., amici curiae.

 SINGAS, J.:

        The Business Corporation Law requires foreign corporations seeking authorization

 to do business in New York to register with the New York Secretary of State and designate

 an in-state agent for service of process. The question before us on this appeal is whether a

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foreign corporation consents to the exercise of general jurisdiction by New York courts by

registering to do business here and designating a local agent for service of process. We

conclude that a foreign corporation’s compliance with the relevant statutory provisions

constitutes consent to accept service of process in New York; that compliance does not

constitute consent to general jurisdiction in New York courts.

                                              I.

       In July 2012, defendant Jose A. Aybar, Jr., a New York resident, was operating a

Ford Explorer on an interstate highway in Virginia. The vehicle overturned multiple times

after its Goodyear tire allegedly failed, resulting in the death of three passengers and

injuries to three other passengers. The surviving passengers and the representatives of the

deceased passengers’ estates (plaintiffs) commenced this action against defendants Aybar,

Ford Motor Company (Ford), and The Goodyear Tire & Rubber Co. (Goodyear), asserting,

among other things, products liability claims against Ford and Goodyear.

       Aybar purchased the vehicle in New York from a third party. Ford did not sell the

vehicle in this state in the first instance, nor did Ford design or manufacture the vehicle

here. Similarly, Goodyear designed, manufactured, and initially sold the tire in other states.

It is undisputed that Ford was incorporated in Delaware and maintains its principal place

of business in Michigan and that Goodyear was incorporated and has its principal place of

business in Ohio. At all relevant times, Ford and Goodyear were registered with the New

York Secretary of State as foreign corporations authorized to do business in this state and

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had appointed in-state agents for service of process in accordance with the Business

Corporation Law.

       Ford and Goodyear separately moved to dismiss the complaint against them

pursuant to CPLR 3211 (a) (8) on the ground that New York courts lacked personal

jurisdiction. Plaintiffs opposed both motions, arguing, as relevant here, that by registering

to do business in New York and appointing an in-state agent for service of process, a

foreign corporation knowingly consents to general jurisdiction in this state’s courts.

       Supreme Court denied the motions in separate orders, concluding that New York

courts could exercise general jurisdiction over Ford and Goodyear. Citing Bagdon v

Philadelphia & Reading Coal & Iron Co. (217 NY 432 [1916]), the court determined that

Ford and Goodyear consented to general jurisdiction by registering to do business in New

York as a foreign corporation and designating a local agent for service of process.

       The Appellate Division reversed the orders and granted the motions of Ford and

Goodyear to dismiss the complaint as to them (see 169 AD3d 137, 152-153 [2d Dept

2019]). Citing Bagdon and other authority, the Court agreed with the motion court that

“[t]here has been longstanding judicial construction” that a foreign corporation’s

registration to do business in New York and appointment of an in-state agent constituted

consent to general jurisdiction (id. at 147). The Court determined, however, that “Bagdon

must be understood within the historical context in which it was decided” and, in light of

recent Supreme Court precedent clarifying the permissible grounds for general jurisdiction,

the Court concluded that “it cannot be said that a corporation’s compliance with the

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existing business registration statutes constitutes consent to the general jurisdiction of New

York courts” (id. at 147-148).

       We granted plaintiffs leave to appeal from the Appellate Division order (see 34

NY3d 905 [2019]) and now affirm.

                                             II.

       To begin, we clarify what issues are—and are not—presented here. Plaintiffs

concede that they did not assert below that New York courts had specific jurisdiction over

Ford and Goodyear under New York’s long-arm statute, CPLR 302. As a result, that issue

is unpreserved for our review. In addition, plaintiffs have abandoned any argument that

Ford and Goodyear are essentially at home in New York such that general jurisdiction

exists pursuant to Goodyear Dunlop Tires Operations, S.A. v Brown (564 US 915 [2011]

[“Goodyear”]) and Daimler AG v Bauman (571 US 117 [2014] [“Daimler”]). The sole

issue before us, as presented by the parties, is whether Ford and Goodyear consented to

general jurisdiction in New York by registering to do business here and appointing a local

agent for service of process, in compliance with the Business Corporation Law.1 For the

1
  Plaintiffs do not argue that defendants consented to jurisdiction by any other available
means. For instance, parties may contract or stipulate to submit to personal jurisdiction in
a particular court through appropriate forum-selection agreements (see Insurance Corp. of
Ireland v Compagnie des Bauxites de Guinee, 456 US 694, 703-704 [1982]; Burger King
Corp. v Rudzewicz, 471 US 462, 472 n 14 [1985]).

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reasons that follow, we conclude, as a matter of New York law, that Ford and Goodyear

did not consent to general jurisdiction in New York courts.2

       As relevant here, the Business Corporation Law sets forth the steps a foreign

corporation must take to obtain authorization to do business in New York. Business

Corporation Law § 1301 (a) provides that a foreign corporation “shall not do business in

this state until it has been authorized to do so.” As part of the registration process, a foreign

corporation’s application for authority to do business in New York must include “[a]

designation of the secretary of state as its agent upon whom process against it may be

served” (Business Corporation Law § 1304 [a] [6]). Section 304 likewise provides that

“[n]o . . . foreign corporation may be . . . authorized to do business in this state . . . unless

in its . . . application for authority it designates the secretary of state” as “the agent . . . upon

whom process against the corporation may be served” (id. § 304 [a], [b]). Further, if a

foreign corporation “is to have a registered agent,” it must identify that agent’s “name and

address within this state” and declare “that the registered agent is to be its agent upon whom

process against it may be served” (id. § 1304 [a] [7]).

       These statutory provisions plainly require that, in order to do business in New York,

a foreign corporation must register and designate an in-state agent for service of process.

The statutes do not, however, condition the right to do business on consent to the general

2
  Contrary to the dissent’s implication, we do not, nor would it be appropriate for us to,
opine as to whether the facts of this case would render Ford or Goodyear subject to personal
jurisdiction in other states (see dissenting op at 2).

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jurisdiction of New York courts or otherwise afford general jurisdiction to New York

courts over foreign corporations that comply with these conditions. A different reading

would improperly “amend [the] statute by adding words that are not there” (American Tr.

Ins. Co. v Sartor, 3 NY3d 71, 76 [2004]) and would impermissibly “read into a statute a

provision which the [l]egislature did not see fit to enact” (Matter of Chemical Specialties

Mfrs. Assn. v Jorling, 85 NY2d 382, 394 [1995] [internal quotation marks and citation

omitted]). Accordingly, a foreign corporation’s registration to do business and designation

of an agent for service of process in New York does not constitute consent to general

jurisdiction under the Business Corporation Law’s plain terms (see Kuzmich v 50 Murray

St. Acquisition LLC, 34 NY3d 84, 91 [2019], cert denied __ US __, 140 S Ct 904 [2020]

[a court must give effect to the plain meaning of the statute’s language]).3

       Nevertheless, citing Bagdon and other authority, plaintiffs argue that registering to

do business in New York and appointing an agent for service of process constitutes consent

to general jurisdiction (see 217 NY 432; Chufen Chen v Dunkin’ Brands, Inc., 954 F3d

492, 498 [2d Cir 2020]), and that the assertion of general jurisdiction under such a theory

3
  It appears that every state has enacted business registration statutes, though they vary in
language and effect (see e.g. 42 Pa C S § 5301 [a] [2] [“qualification as a foreign
corporation” under Pennsylvania’s laws “shall constitute a sufficient basis of jurisdiction”
for Pennsylvania courts “to exercise general personal jurisdiction”]). Interpreting their
own statutes or common law, courts in other states have reached correspondingly diverse
conclusions concerning whether registration and designation of an agent for service of
process within the state constitutes consent to general jurisdiction (compare Cooper Tire
& Rubber Co. v McCall, __ Ga __, 2021 WL 4268074, *1, 2021 Ga LEXIS 626, *1 [Ga
2021], with Thomson v Anderson, 113 Cal App 4th 258, 268 [Cal Ct App 2003]).

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is permissible (see Neirbo Co. v Bethlehem Shipbuilding Corp., 308 US 165 [1939];

Pennsylvania Fire Ins. Co. of Philadelphia v Gold Issue Mining & Milling Co., 243 US 93

[1917]). Plaintiffs’ interpretation of Bagdon is incorrect. Rather, when viewed in the

context of the controlling jurisprudence of the time, Bagdon’s holding was far narrower

than plaintiffs urge. Our holding in Bagdon, properly understood, was limited to the effect

of service of process to which a foreign corporation consented; we did not determine that

a foreign corporation consented to general jurisdiction by registering to do business and

designating an agent for service of process.

       In Bagdon, the plaintiff, a New York resident, was injured while working in

Pennsylvania for the defendant, a Pennsylvania corporation (see 217 NY at 433). The

parties agreed that the defendant would compensate the plaintiff for his injuries, and the

plaintiff later commenced the action in New York asserting a breach of that contract. The

defendant conceded that it was engaged in unrelated business in New York. It was also

registered to do business here and had designated an in-state agent to accept service of

process in accordance with the registration statutes in effect at that time (see id.; former

General Corporation Law § 16).4 The plaintiff commenced the action by serving process

4
  The General Corporation Law provisions at issue were similar—though not identical—
to those in effect today. In 1916, New York’s registration statutes said that foreign
corporations must procure a certificate to do business that could issue only after the
corporation filed a statement with the secretary of state designating a principal place of
business in the state and “a person upon whom process against the corporation may be
served within the state,” which person was required to have an office in the corporation’s
in-state principal place of business (former General Corporation Law § 16; see id. § 15).
Although a foreign corporation was barred from maintaining any actions on its in-state
contracts unless it had complied with these requirements (see id. § 15), at the time of our
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on the defendant’s designated New York agent. The defendant moved to dismiss, arguing

that because the plaintiff’s “cause of action owe[d] its origin to business transacted in

Pennsylvania[,] . . . the service [was] invalid” as the designated agent’s authority to accept

service in New York “must be limited to actions which arise out of the business transacted

in New York” (Bagdon, 217 NY at 433-434). The issue presented to this Court was thus

limited to whether the effect of the service to which the defendant had consented extended

to causes of action unrelated to its business transacted in New York.

       Resolving that narrow issue, we held that the service had the effect of conferring

jurisdiction over the defendant corporation for any subject matter jurisdiction properly

exercised by New York courts. We first determined that the defendant’s designation of an

in-state agent for service of process, in compliance with the statute, was “a real consent”

or “true contract” for the designated person to accept “process against the corporation” (id.

at 436 [internal quotation marks omitted]). In other words, the designation amounted to

consent to in-state service. We did not conclude, however, as the dissent would have it,

that the corporation’s registration and designation of an agent, by itself, constituted consent

to general jurisdiction (see dissenting op at 14). If we had, our analysis would have ended

with our determination that the defendant’s statutory consent to accept service through its

decision in Bagdon, we concluded that unlicensed business was “not illegal” (217 NY at
436). While that may have been true in 1916, it is not the case anymore. Indeed, contrary
to the dissent’s statement that an unregistered foreign corporation loses “only the ability to
bring suit” in New York courts (dissenting op at 30), today, the Attorney General has power
to commence litigation to restrain a foreign corporation from doing unauthorized business
in this state (see Business Corporation Law §§ 1301, 1303).

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designated agent was effective.       We continued our analysis, however, separately

“ascertain[ing] the meaning and defin[ing] the effect of” the service made in accordance

with the defendant’s consent to accept service under the statute (Bagdon, 217 NY at 436).

       We examined this effect-of-service question through the lens of the then-applicable

jurisdiction principles and in light of the fact that the defendant’s presence in New York

was not in dispute. Indeed, the defendant conceded that it was doing business in New

York, had registered to do business here, and had consented to service under the then-

governing General Corporation Law by designating an in-state agent to accept service (see

id. at 433). We ultimately held that the effect of the in-state service on the defendant’s

designated agent was to provide New York courts with what we would now term “general

jurisdiction” or, as Judge Cardozo described it in the parlance of the time, the defendant

was “subject to the rule that transitory causes of action are enforceable wherever the

defendant may be found” (id. at 439). That is, the Court determined that jurisdiction existed

not because the corporation “consented” to it, but because then existing Supreme Court

precedent established, consistent with Pennoyer v Neff’s territorial approach, that in-state

service on a foreign corporation present in the state afforded general jurisdiction (see 95

US 714, 720 [1878]; see also St. Louis Southwestern R. Co. of Tex. v Alexander, 227 US

218, 226 [1913]; St. Clair v Cox, 106 US 350, 359-360 [1882]).

       Bagdon has been interpreted by others as holding, under the common law, that

foreign corporations that have abided by the aforementioned registration and designation

statutes have thereby contractually consented, not only to service of process on a

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designated agent, but to general jurisdiction in New York.            However, any such

interpretation is a misreading of our decision that fails to appreciate the narrow scope of

the issue presented in that case and, more critically, its historical context. We determined

in Bagdon that a foreign corporation’s registration to do business and appointment of a

local agent for service of process constituted consent to accept service of process in New

York in connection with any matter, and the effect of that service there, where the

defendant’s presence in New York was not disputed, was to afford our courts jurisdiction

even over claims that did not arise from the corporation’s New York business.

       A year after Bagdon was decided, we again addressed whether personal jurisdiction

existed over a foreign corporation in Tauza v Susquehanna Coal Co. (220 NY 259 [1917]).

In Tauza, the foreign corporation was not registered to do business in New York and had

not designated an in-state agent for service of process. The case therefore turned on the

propriety of the plaintiff’s in-state service on the foreign corporation’s managing sales

agent (see former Code Civ Pro § 432 [3]). After reviewing the extent of the defendant

corporation’s business activities in New York, we concluded that it was present in New

York because it was “engaged in business within this state” to “such a degree as to subject”

it “to the jurisdiction of our courts” (Tauza, 220 NY at 266, 268). Because the defendant

foreign corporation was “here,” we explained that “it may be served” with process (id. at

269). Citing Bagdon, we determined that service upon the agent had the effect of

conferring New York courts with general jurisdiction over the defendant corporation. The

“essential thing” in both Bagdon and Tauza was that the corporation was present in this

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state because “[w]hen once it is here, it may be served; and the validity of the service is

independent of the origin of the cause of action” (id. at 268-269). We therefore reached

the same ultimate conclusion in Tauza as we had in Bagdon—in-state service on a foreign

corporation present in New York had the effect of conferring general jurisdiction over that

corporation in accord with then-governing federal law.5

       Neither case “established ‘general’ personal jurisdiction through consent by

registration” (dissenting op at 16). We never held in Bagdon that designation of an agent

constituted consent to general jurisdiction. Moreover, the analysis a court would undertake

to determine the effect of service in New York on a designated agent would be different

today than it was at the time of our decision in Bagdon.

       In that regard, it has consistently been understood 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” (Goodyear, 564 US at 923). “Due process requires that the

defendant be given adequate notice of the suit and be subject to the personal jurisdiction of

5
  Tauza exemplifies the inaccuracy of the dissent’s conclusions that, at the time of Bagdon,
“presence in New York was legally irrelevant” and “without consent, the fact that a foreign
corporation did business in New York would not have allowed for jurisdiction over it for
causes of action that did not arise from its operations in New York” (dissenting op at 17,
18). Of course, at that time, a foreign corporation could “subject[] itself to . . . jurisdiction”
in New York, absent consent, by “doing business within our borders” when service was
made upon an appropriate corporate officer or agent (Gaboury v Central Vt. Ry. Co., 250
NY 233, 236 [1929]). And as Tauza held, citing Bagdon, when “the defendant corporation
is engaged in business within this state . . . the jurisdiction does not fail because the cause
of action sued upon has no relation in its origin to the business here transacted” (Tauza,
220 NY at 268).

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the court” (World-Wide Volkswagen Corp. v Woodson, 444 US 286, 291 [1980] [internal

citation omitted]).      Consistent with this principle, we have explained that the

“constitutional predicates of personal jurisdiction” contain two components (Keane v

Kamin, 94 NY2d 263, 265 [1999]). The first “component involves service of process,

which implicates due process requirements of notice and opportunity to be heard” (id.).

“The other component of personal jurisdiction involves the power, or reach, of a court over

a party, so as to enforce judicial decrees” (id.; see Flick v Stewart-Warner Corp., 76 NY2d

50, 57 [1990]).

       Supreme Court jurisprudence defining the contours of the personal jurisdiction

analysis has evolved significantly over time. Shortly after the Fourteenth Amendment was

ratified, the Supreme Court determined in Pennoyer that “[t]he authority of every tribunal

is necessarily restricted by the territorial limits of the [s]tate in which it is established” (95

US at 720). In other words, under Pennoyer a defendant had to be present within the court’s

territorial jurisdiction before the court could assert personal jurisdiction over that defendant

(see International Shoe Co. v Washington, 326 US 310, 316 [1945] [“International

Shoe”]). Pennoyer’s territorial approach governed when we decided Bagdon.

       Decades later, the Supreme Court decided International Shoe, a “transformative

decision on personal jurisdiction” (BNSF R. Co. v Tyrrell, 581 US __, __, 137 S Ct 1549,

1557 [2017]) and a “momentous departure from Pennoyer’s rigidly territorial focus”

(Daimler, 571 US at 128; see World-Wide Volkswagen Corp., 444 US at 293). There, the

Court expanded the states’ permissible exercise of jurisdiction by holding that they could

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exercise personal jurisdiction over an out-of-state defendant, in accord with the Due

Process Clause, if the defendant has “certain minimum contacts with [the state] such that

the maintenance of the suit does not offend traditional notions of fair play and substantial

justice” (International Shoe, 326 US at 316 [internal quotation marks and citation

omitted]). “Following International Shoe, ‘the relationship among the defendant, the

forum, and the litigation, rather than the mutually exclusive sovereignty of the [s]tates on

which the rules of Pennoyer rest, became the central concern of the inquiry into personal

jurisdiction’” (Daimler, 571 US at 126, quoting Shaffer v Heitner, 433 US 186, 204 [1977];

see Keane, 94 NY2d at 265 [“To satisfy the jurisdictional basis there must be a

constitutionally adequate connection between the defendant, the (s)tate(,) and the action”]).

       International Shoe crystallized the two categories of personal jurisdiction that we

now recognize, “general or all-purpose jurisdiction[] and specific or case-linked

jurisdiction” (Goodyear, 564 US at 919).          The former permits a court to exercise

jurisdiction over a defendant in connection with a suit arising from events occurring

anywhere in the world, whereas the latter permits a court to exercise jurisdiction only where

the suit arises out of or relates to the defendant’s contacts with the forum state (see Bristol-

Myers Squibb Co. v Superior Court of Cal., San Francisco Cty., 582 US __, __, 137 S Ct

1773, 1780 [2017]). “Since International Shoe, ‘specific jurisdiction has become the

centerpiece of modern jurisdiction theory, while general jurisdiction [has played] a reduced

role’” inasmuch as the Supreme Court has “declined to stretch general jurisdiction beyond

limits traditionally recognized” (Daimler, 571 US at 128, 132, quoting Goodyear, 564 US

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at 925). Thus, while specific jurisdiction has rapidly expanded (see id. at 128; see also

Ford Motor Co. v Montana Eighth Judicial Dist. Court, 592 US __, __, 141 S Ct 1017,

1024-1025 [2021]), the Supreme Court has limited general jurisdiction’s reach to a narrow

class of defendants.

       Today, “the exercise of general jurisdiction in every [s]tate in which a corporation

engages in a substantial, continuous, and systematic course of business” would be

“unacceptably grasping” (Daimler, 571 US at 138 [internal quotation marks and citation

omitted]; see Goodyear, 564 US at 927). Following Goodyear and Daimler, “[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 [s]tate are so

‘continuous and systematic’ as to render them essentially at home in the forum [s]tate”

(Goodyear, 564 US at 919; see Daimler, 571 US at 122).6 “With respect to a corporation,

the place of incorporation and principal place of business are paradigm . . . bases for general

jurisdiction” because these are places where a corporation “is fairly regarded as at home”

(Daimler, 571 US at 137 [internal quotation marks, brackets, and citations omitted]). The

Court left the door open to “the possibility that . . . a corporation’s operations in a forum

6
  New York’s statute governing general jurisdiction is CPLR 301, which states that “[a]
court may exercise such jurisdiction over persons, property, or status as might have been
exercised heretofore.” Prior to Goodyear and Daimler, this Court held that “[a] foreign
corporation is amenable to suit in New York courts under CPLR 301 if it has engaged in
such a continuous and systematic course of doing business here that a finding of its
presence in this jurisdiction is warranted” (Landoil Resources Corp. v Alexander &
Alexander Servs., 77 NY2d 28, 33 [1990] [internal quotation marks and citation omitted];
see also McGowan v Smith, 52 NY2d 268, 272-273 [1981]).
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other than its formal place of incorporation or principal place of business may be so

substantial and of such a nature as to render the corporation at home in that [s]tate,” but

characterized such scenario as an “exceptional case” (id. at 139 n 19).

                                            III.

       As explained, Bagdon was decided in 1916 at the time of Pennoyer’s territorial

approach, long before International Shoe and the Supreme Court’s subsequent cases on

personal jurisdiction.7 Thus, despite the trajectory of Supreme Court precedent since

Bagdon, the decision may still be read to support the Business Corporation Law’s general

design, requiring a foreign corporation to consent to service of process in New York (see

also CPLR 311 [a] [1]). But, as our discussion of the evolution of Supreme Court case law

demonstrates, the analysis necessary to determine the effect of that service under current

precedent is not the same as it was when Judge Cardozo considered the issue. In Bagdon,

the defendant’s consent to service of process had the effect of conferring general

jurisdiction because, at that time, in-state service of process on a designated agent of a

foreign corporation that was doing business in New York was itself sufficient to permit the

exercise of general jurisdiction over the defendant. Thus, there was no need to rely on a

consent to jurisdiction rationale in Bagdon, and our decision did not include any such

7
  Notably, we have not cited Bagdon since International Shoe was decided in 1945. We
last cited Bagdon in 1944 for the proposition that the “designation of a public officer upon
whom service may be made has the same effect as a voluntary consent” (Pohlers v Exeter
Mfg. Co., 293 NY 274, 280 [1944] [emphasis added]). We continued to speak of “a consent
to accept service of process,” not a consent to general jurisdiction in our courts (id.).

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analysis. We have never conflated statutory consent to service with consent to general

jurisdiction,8 and the fact remains that, under existing New York law, a foreign corporation

does not consent to general jurisdiction in this state merely by complying with the Business

Corporation Law’s registration provisions.

       Inasmuch as our conclusion rests solely on New York law grounds, we have no

occasion to address whether consent-by-registration, if it existed in New York, would

comport with federal due process under Daimler.9 We therefore express no opinion on the

federal due process issue presented by the parties. Instead, as we reject the only basis for

jurisdiction preserved below and presented here, namely plaintiffs’ theory that Ford and

Goodyear consented to general jurisdiction under New York law, we conclude that the

motions to dismiss were properly granted.

8
  We have adhered to our statutory analysis in the general jurisdiction context, while
specifically referencing the relevant Business Corporation Law provisions governing
registration and appointment of a local agent. For example, we have explained that “service
of process on a foreign corporation authorized to do business in the [s]tate is simple”
because “[t]here are no theoretical uncertainties concerning the basis for jurisdiction since
the foreign corporation is concededly doing business in the [s]tate and, indeed, has applied
for authority for the express purpose of doing so” (Flick, 76 NY2d at 57, citing Business
Corporation Law § 1304 [a] [emphasis omitted]). We separately stated that “there can be
no question that service on . . . the foreign corporation’s designated agent is the equivalent
of actual service on the foreign corporation” (id., citing Business Corporation Law § 1304
[a] [6]). Again, we did not suggest that consent to service of process constituted a consent
to general jurisdiction.
9
  Although the parties cite to proposed legislation that would amend the business
registration statutes to expressly state that a foreign corporation consents to general
jurisdiction in New York when it registers to do business here, no such language currently
exists in the Business Corporation Law. We have no occasion to address the effect of such
legislation were it to become law.
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Accordingly, the order of the Appellate Division should be affirmed, with costs.

                                   - 17 -
WILSON, J. (dissenting):

      Jose Aybar, Jr., a resident of New York, owned a Ford Explorer equipped with

Goodyear tires in New York, which was registered to him with the New York Department

of Motor Vehicles. He purchased it in New York. On July 1, 2012, he was driving the

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                                           -2-                                       No. 54

Explorer, with members of his family as passengers, on a return trip from a vacation in

Florida back to New York. All passengers were New York residents. On I-85 in

Brunswick County, Virginia, the car crashed and rolled over multiple times. Three

passengers, including an 8-year-old girl, died; three others, including a 14-year-old girl,

were seriously injured. The six passengers, or their estates, filed this suit in New York

against Ford, Goodyear and others. The complaint alleged that the accident was caused by

Ford and Goodyear’s negligence. It is undisputed that both Ford and Goodyear: (a) have

registered to do business in New York; (b) conduct a substantial amount of business in

New York; and (c) are not incorporated in New York.

       Where can the plaintiffs sue Ford and Goodyear?          The following points are

undisputed. Ford could have been sued in Delaware and Goodyear in Ohio because, under

the doctrine of general jurisdiction, those states are their homes, where they can be sued

for anything at all. Ford and Goodyear could both have been sued in Virginia, because the

doctrine of specific jurisdiction allows them to be sued where the accident occurred.

Finally, even when neither general nor specific jurisdiction otherwise exists, a defendant

may be sued wherever it has consented to be sued.

       The majority concludes that Ford and Goodyear did not consent to our courts’

general jurisdiction by registering to do business here. The majority rests its conclusion

on three propositions, none of which supports it.

       First, it conducts a de novo statutory interpretation of the Business Corporation Law

(“BCL”). The plain text of the statute, the majority observes, does not “condition the right

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                                             -3-                                       No. 54

to do business on consent to the general jurisdiction of New York courts,” and any other

reading “would improperly amend the statute by adding words that are not there” (majority

op at 5-6). Although the majority professes to effectuate the legislature’s intent, it

eviscerates it. Our court has repeatedly and consistently interpreted the substantively

unchanged provision of the BCL beginning 150 years ago, well before Bagdon v

Philadelphia & Reading Coal & Iron Co. (217 NY 432 [1916]). The immense irony here

is that the majority admits, as it must, that the purpose of the statute was to subject foreign

corporations to jurisdiction in New York. Yes, the mechanism to do so at that time was

through the designation of an agent for service of process, but the unquestioned legislative

objective was to grant New York courts jurisdiction over foreign corporations. The

majority has confused the means for the end: the history of the statute, as shown through

our contemporaneous jurisprudence, shows that the legislature’s intent could not be clearer:

it achieved the goal of jurisdiction through the means of consent to service.

       Second, it explains United States Supreme Court jurisprudence on general and

specific jurisdiction, despite noting that neither doctrine is relevant to this case (majority

op at 4). The question is whether Ford and Goodyear have consented to New York’s

exercise of personal jurisdiction over them by registering to do business in New York. The

majority’s position is obfuscated by its traipse through United States Supreme Court cases

concerning personal jurisdiction, but it can be stated quite simply: because the evolution of

general and specific jurisdiction has rendered jurisdiction by registration-based consent

less essential, it is now unavailable. But just as the invention of air travel has not altered

                                             -3-
                                               -4-                                    No. 54

the ability to travel by car, the evolution of general and specific jurisdiction announced by

International Shoe v Washington (326 US 310 [1945]) has not altered the ability to obtain

jurisdiction by consent.       Indeed, the majority’s determination that consent-based

jurisdiction is no longer necessary is precisely the sort of policy-based statutory revision

we have long decried.

       Finally, the majority reinterprets Bagdon. But its novel re-interpretation of Bagdon

and the registration statute it construed is incorrect, flying in the face of a century of

jurisprudence firmly notifying businesses that registration to do business in our state

subjects them to personal jurisdiction here.

       The majority does not dispute that a defendant may consent to personal jurisdiction

where it otherwise would not exist. The majority also does not dispute that actions, such

as registering to do business in a state, could constitute consent to personal jurisdiction if

that consequence were established by law. The sole question in this appeal, then, is whether

New York law establishes that corporate registration equals consent to personal

jurisdiction. It has, for a century and a half.

                                                  I

       As the majority observes, the Business Corporation Law, though requiring out-of-

state corporations to designate an agent for service when registering to do business in New

York, does not say that in doing so, the corporation is agreeing that New York has personal

                                               -4-
                                            -5-                                       No. 54

jurisdiction over it (majority op at 5-6). The absence of that language is not meaningful.

As the majority recognizes through its discussion of Bagdon, judicial decisions have the

same effect as statutes: each sets out what the law is (Robert Mitchell Furniture Co. v

Selden Breck Const. Co., 257 US 213, 216 [1921]). More to the point here, Bagdon and

several of our predecessor cases have construed the relevant statute as conferring personal

jurisdiction on corporations because they registered in New York. Statutory interpretation

and construction are the province of the courts (see id.; see also People v Knickerbocker

Ice Co., 99 NY 181 [1885] [“No doubt it is the province of the court to declare what the

law is”]).

       The majority’s decision to interpret the BCL anew is confounding. When engaging

in statutory interpretation, determining “[l]egislative intent is of course paramount” (Alweis

v Evans, 69 NY2d 199, 205 [1987]). As the majority concedes, the unequivocal legislative

intent behind the General Business Law was to provide jurisdiction, and Bagdon construed

the statute precisely as intended (majority op at 9). The statutory language has not changed,

and recent Supreme Court caselaw is irrelevant as to our legislature’s intent. The majority

makes no claim that any Supreme Court law has rendered consent-by-registration

unconstitutional; the Supreme Court has several times upheld its constitutionality and,

more recently, made sure to disclaim the effects of its decisions on consent-based

jurisdiction.

       We have interpreted the BCL at its inception, when it was amended, and several

times thereafter. Our consistent interpretation dates back to the nineteenth century.

                                            -5-
                                            -6-                                       No. 54

“[O]nce the courts have interpreted a statute any change in the rule will be left to the

Legislature, particularly where the courts’ interpretation is a long-standing one” (Matter of

Eckart’s Estate, 39 NY2d 493, 499-500 [1976]). “The construction of a statute accepted

for over a century without serious challenge should not be changed by the court without

compelling reason” (In re Schinasi’s Will, 277 NY 252, 265-66 [1938]). The only hint at

any explanation for discarding the settled interpretation is that the majority now deems it

less necessary than when it was when enacted. That choice is for the legislature, not us.

                                             II

       Although the majority relies on International Shoe, Daimler AG v Bauman (571 US

117 [2014]) and Goodyear Dunlop Tires Operations, S.A. v Brown (564 US 915 [2011]),

those cases do not support the majority’s holding; indeed, the cases themselves tell us so.

Jurisdiction may be established in three ways: specific jurisdiction (where the claim arose);

general jurisdiction (where the defendant is at home); or consent. The majority recognizes

that International Shoe substantially expanded the places where personal jurisdiction over

defendants could be asserted, mainly by differentiating between specific and general

jurisdiction and allowing specific jurisdiction to empower courts located where the claim

arose, regardless of the extent of the defendant’s presence. The majority points to Daimler

and Goodyear as contracting general jurisdiction and emphasizing specific jurisdiction as

the principal means by which personal jurisdiction over foreign defendants (whether

                                            -6-
                                             -7-                                     No. 54

corporate or natural) has been expanded. True though that may be, it has nothing to do

with jurisdiction by consent.

       At most, the majority demonstrates that the expansion of specific jurisdiction has in

many cases provided an alternative way to address the problem of reaching foreign

defendants that have caused injury in a state other than their home. The expanded

availability of specific jurisdiction may make resort to consent-based jurisdiction less

necessary, but it does not impugn its vitality in the least.

       Indeed, the Supreme Court has been careful, in the very decisions relied on by the

majority, to wall off consent-based jurisdiction theories from its developments around

specific and general jurisdiction. In International Shoe, the Court tacitly affirmed the

validity of consent-based jurisdiction by registration by noting that “‘[p]resence’ in the

state in this sense has never been doubted when the activities of the corporation there have

not only been continuous and systematic, but also give rise to the liabilities sued on, even

though no consent to be sued or authorization to an agent to accept service of process has

been given” (id. at 317 [emphasis added]). In Daimler, the Court noted that its holding on

general jurisdiction applied only when a corporate defendant “has not consented to suit in

the forum” (571 US at 129 [quoting Goodyear (564 US at 927-28)]). Likewise, in BNSF

the Court held that neither general nor specific jurisdiction in that case existed “absent

consent”—thus clearly separating its holding from any claim of jurisdiction based on

consent (137 S Ct at 1556). In short, whatever the Supreme Court has done with regard to

                                             -7-
                                             -8-                                       No. 54

general and specific jurisdiction, it has been careful not to disturb settled law establishing

that a state may demand consent to jurisdiction as a condition of doing business.

                                              III

       For more than a century, courts and commentators have widely understood that by

registering to do business in New York, a corporation consents to personal jurisdiction in

our courts. The majority asserts that Bagdon did not create a common-law consent to

general jurisdiction (majority op at 9) but rather is merely a case about service. Bagdon is

not a case about service, nor is it a common-law rule. It is our interpretation of a statute.

It is not even our first interpretation of that statute. Until now, all our interpretations of

that statute have been consistent: the legislative purpose in requiring foreign businesses to

register was to obtain jurisdiction over them in our courts. Bagdon is a case about

consent—specifically, consent through business registration as a valid basis for general

jurisdiction in the courts of New York. By glossing over the history of the law of

corporations and personal jurisdiction in the decades before Bagdon, the majority has

constructed an otherworldly view of our jurisprudence.

                                              A

       We must start not with Bagdon, not with Pennoyer v Neff (95 US 714 [1877]), but

instead with M’Queen v Middletown Mfg. Co., 16 Johns 5 (NY Sup Ct 1819). At that time,

a corporation was deemed to exist only in its state of incorporation and could be subject to

judicial process in that state only, by service on its chief officer (id. at 6-7; see generally

                                             -8-
                                           -9-                                    No. 54

Edward Quinton Keasbey, Jurisdiction over Foreign Corporations, 12 Harv L Rev 1

[1898]). As explained by the United States Supreme Court:

             “The principle that a corporation must dwell in the place of its
             creation, and cannot, as said by Mr. Chief Justice Taney,
             migrate to another sovereignty, coupled with the doctrine that
             an officer of the corporation does not carry his functions with
             him when he leaves his State, prevented the maintenance of
             personal actions against it. There was no mode of compelling
             its appearance in the foreign jurisdiction. Legal proceedings
             there against it were, therefore, necessarily confined to the
             disposition of such property belonging to it as could be there
             found; and to authorize them legislation was necessary”

(St. Clair v Cox, 106 US 350, 354 [1882]). Thus, the challenge was not one of service—

the burden of locating a corporate defendant and physically delivering papers. The issue

was personal jurisdiction over the corporation.

      The Court next described the pressing need to obtain personal jurisdiction over

foreign corporations in America’s burgeoning economy:

             “This doctrine of the exemption of a corporation from suit in a
             State other than that of its creation was the cause of much
             inconvenience, and often of manifest injustice. The great
             increase in the number of corporations of late years, and the
             immense extent of their business, only made this
             inconvenience and injustice more frequent and marked.
             Corporations now enter into all the industries of the country.
             The business of banking, mining, manufacturing,
             transportation, and insurance is almost entirely carried on by
             them, and a large portion of the wealth of the country is in their
             hands. Incorporated under the laws of one State, they carry on
             the most extensive operations in other States. To meet and
             obviate this inconvenience and injustice, the legislatures of
             several States interposed, and provided for service of process
             on officers and agents of foreign corporations doing business
             therein. Whilst the theoretical and legal view, that the domicile
             of a corporation is only in the State where it is created, was

                                           -9-
                                           - 10 -                                    No. 54

              admitted, it was perceived that when a foreign corporation sent
              its officers and agents into other States and opened offices, and
              carried on its business there, it was, in effect, as much
              represented by them there as in the State of its creation. As it
              was protected by the laws of those States, allowed to carry on
              its business within their borders, and to sue in their courts, it
              seemed only right that it should be held responsible in those
              courts to obligations and liabilities there incurred”

(id. at 355 [emphasis added]; see also William Laurens Walker, Foreign Corporation

Laws: The Loss of Reason, 47 NC L Rev 1, 12 [1968]).

       Against that background, to obtain jurisdiction, not merely service, over foreign

corporations, our legislature first required foreign insurance companies to designate an

agent for service of process filed with the Secretary of State (L 1853, ch 463, §§ 14-15; id.

ch 466, §23) and shortly thereafter expanded that requirement to all foreign corporations

(L 1855, ch 279, § 1). The validity of this means of obtaining jurisdiction over foreign

corporations was repeatedly and conclusively reaffirmed well before Bagdon. In Gibbs v.

Queen Ins. Co. (63 NY 114 [1875]), we considered the effect of the aforementioned statutes

in connection with two questions:

              “1. Has the legislature provided a mode in which a citizen of
              this State . . . may bring an action against [a foreign] company
              in some of the courts of record of this State? . . . and in what
              manner shall service of it be made. 2. Does the method
              provided, and the process and mode of service of it prescribed,
              give some of the courts of record of this State such jurisdiction
              of the matter and of the defendant, as that they can render a
              personal judgment which will be valid in this State, and
              enforceable against any property of the defendant found within
              it?”

(id. at 116 [emphasis added]). We answered both in the affirmative, holding that:

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                                            - 11 -                                    No. 54

              “[T]he legislature of the State has enacted that the defendant,
              as a prerequisite to doing business in this State, shall designate
              an attorney or an agent therein upon whom process in any suit
              to be commenced against it may be served, and [the defendant]
              has designated a person as such agent, and that service of
              process against the defendant has been made upon [the agent.]
              Is not the enactment of the statute by the legislature, a proffer
              to the defendant of the power to do business in this State, if it
              will subject itself to the jurisdiction of our courts, and is not
              the acceptance of that proffer by the defendant a submission to
              that jurisdiction?”

(id. at 128 [emphasis added]). The widely-accepted view was that a “corporation of one

State cannot do business in another State without the latter’s consent, express or implied,

and that consent may be accompanied with such conditions as it may think proper to

impose” (St. Clair, 106 US at 356; see also Lafayette Ins. Co. v French, 59 US [18 How]

404, 407 [1856] [“A corporation created by Indiana can transact business in Ohio only with

the consent, express or implied, of the latter State. This consent may be accompanied by

such conditions as Ohio may think fit to impose . . . . It cannot be deemed unreasonable

that the State of Ohio should endeavor to secure to its citizens a remedy, in their domestic

forum . . . nor that proper means should be used to compel foreign corporations, transacting

this business of insurance within the State, for their benefit and profit, to answer there for

the breach of their contracts of insurance there made and to be performed” (citation

omitted)]; Ex parte Schollenberger, 96 US 369, 376 [1877] [“(T)here cannot be any doubt,

as it seems to us, of the jurisdiction of the Circuit Court over these defendant companies.

They have in express terms, in consideration of a grant to the privilege of doing business

within the State, agreed that they may be sued there; that is to say, that they may be found

there for the purposes of the service of process issued ‘by any court of the Commonwealth

                                            - 11 -
                                          - 12 -                                    No. 54

having jurisdiction of the subject-matter.’ This was a condition imposed by the State upon

the privilege granted, and it was not unreasonable”]; Douglass v Phenix Ins. Co., 138 NY

209, 220 [1893] [“(T)he effect of the act of a foreign corporation constituting an agent in

another state, upon whom proceedings may be served, done in compliance with the laws

of such state in pursuance of a condition imposed, and to enable the corporation to do

business in such state . . . (is that) by such act the corporation . . . becomes bound by

judgments rendered upon service on the designated agent, because it has consented so to

be bound”]).

       Responding to our holding in Demarest v Flack (128 NY 205, 217 [1891]), which

gave effect to a corporation incorporated in West Virginia by New York residents designed

to shield themselves from liability for injuries caused by their carnival properties in New

York, the legislature took up our hint that “[t]he supervision of a foreign corporation by

this state may easily be exercised by imposing terms as a condition of permitting it to do

business here.” It amended the General Corporation Law to add sections 15 and 16

(L 1892, ch 687), which provided that foreign corporations could not do business in New

York without obtaining a certificate from the Secretary of State, which required the

corporation to designate an officer or agent for service of process. The statute further

provided that the failure to do so prevented the foreign corporation from accessing our

courts for redress (id.). From the above history, it is plain that the imposition of a

requirement of an agent for service of process was implemented to ensure that New York

courts would have jurisdiction over foreign corporations. The issue was not one of service

per se; service was the means by which jurisdiction could be established.

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                                            - 13 -                                     No. 54

       The Corporations Law, including the amendments of 1892, was amended in

immaterial ways several times (see Frank White, White on New York Corporations 762

[M. Bender ed, 4th ed, 1929]). The revision of 1923 required designation of the Secretary

of State, rather than a corporate officer, as the agent for service of process. When the

Corporations Law was merged into the newly created Business Corporations Law, the

provisions described above were incorporated with no substantive changes (see Seventh

Interim Rep of Joint Legis Comm to Study Rev of Corp Laws, 1963 NY Legis Doc No 29

at 170-71). Thus, the legislative intent to render foreign corporations subject to jurisdiction

in our courts by virtue of registering to do business here is unquestionable. Though the

word the legislature used to effectuate that intent was “service,” under the controlling law

consent to “service” meant consent to jurisdiction. The majority’s analytical method is

analogous to interpreting “Deck the Halls” to celebrate dressing for Pride Month. Neither

defendants, the Appellate Division nor the majority can point to any change of heart by our

legislature in the 168 years since it first directed that foreign insurance companies

registering to do business here were subjecting themselves to jurisdiction in our courts.

                                              B

       That history lays bare the majority’s reinterpretation of Bagdon. In Bagdon, a New

Yorker sued the Philadelphia & Reading Coal & Iron Company (“PRCI”), a Pennsylvania

corporation alleging the breach of a contract arising from Mr. Bagdon’s work for PRCI in

Pennsylvania (Bagdon, 217 NY at 433). PRCI had registered to do business in New York

under section 16 of the General Corporations Law, giving it the right to sue in New York

                                            - 13 -
                                            - 14 -                                     No. 54

in exchange for subjecting itself to suit here. As required, PRCI had designated an agent

to receive service in New York (id.). But when Mr. Bagdon served the designated agent,

PRCI argued that it could not be haled into court in New York because “the plaintiff’s

cause of action ha[d] no relation to business transacted in New York” but rather “owe[d]

its origin to business transacted in Pennsylvania” (id. 433-34). That is, PRCI did not argue

that its registration did not constitute consent to jurisdiction; it argued that its consent to

jurisdiction was limited to injuries arising from its operations in New York. Our Court

rejected that argument because PRCI had consented to jurisdiction in our courts by

registering to do business here.

       Writing for a unanimous court, Judge Cardozo held that jurisdiction over PRCI was

proper in New York—even though the “cause of action has no relation to business

transacted in New York”—because the corporation had registered to do business here (id.

at 434). As had been settled by that point for at least 75 years, the act of designating an

agent to receive service, a required part of the business registration process, was an act of

“real consent” to litigation in New York such that jurisdiction here was proper and

consistent with the Due Process Clause of the United States Constitution (id. at 437-38).

       Contrary to the majority’s assertion (majority op at 9), consent is the analytical

lynchpin of Bagdon. First, we noted that New York’s business registration statute required

corporations to designate an agent to receive service in New York:

              “The state of New York has said that a foreign stock
              corporation . . . shall not do business here until it has obtained
              a certificate from the secretary of state. . . . To obtain such a
              certificate, however, there are conditions that must be fulfilled.
              One of them is a stipulation, to be filed in the office of the

                                            - 14 -
                                           - 15 -                                    No. 54

              secretary of state, ‘designating a person upon whom process
              may be served within this state’”

(id. at 436 [quoting Gen Corp L § 16)]). The penalty for failing to comply with New York’s

business registration requirement, we observed, was that the foreign corporation “may not

maintain any action in our courts ‘upon any contract made by it in this state, unless before

the making of the contract it has procured such certificate’” (id. [quoting Gen Corp L

§ 15]). We then emphasized the crucial point—that such a penalty was not so burdensome

as to undermine consent:

              “The business, though unlicensed, is not illegal; the contract is
              not void; it may be enforced in other jurisdictions; all that is
              lost is the right to sue in the courts of the state . . . . The
              stipulation is, therefore, a true contract. The person designated
              is a true agent. The consent that he shall represent the
              corporation is a real consent”

(id.). Because the corporation’s consent to receive service in New York was “real,” we

held that jurisdiction in New York over the defendant was proper even though the subject

of the lawsuit was not related to the defendant’s business in New York.

       Indeed, one year later, we explicitly reaffirmed that portion of Bagdon’s holding.

Judge Cardozo, again writing for a unanimous Court, announced in Tauza v Susquehanna

Coal Co.:

              “We hold . . . that the jurisdiction does not fail because the
              cause of action sued upon has no relation in its origin to the
              business here transacted. That in principle was our ruling in
              Bagdon v. Phila. & Reading C. & I. Co.”

                                           - 15 -
                                            - 16 -                                     No. 54

(220 NY 259, 268 [1917]). In other words, as we talk about it today, Bagdon established

“general” personal jurisdiction through consent by registration—jurisdiction no different

from that over a New York corporation. Tauza declared Bagdon a holding on jurisdiction:

do we today know better what Judge Cardozo said about his own opinion a year later?

       Bagdon does employ the language of whether “service [wa]s invalid” in its analysis

(Bagdon, 217 NY at 433 [emphasis added]). But understanding “service” in that context

to mean only what we think of today as “service”—the delivery of papers on the

appropriate person so that sufficient notice is provided to a party—can be done only by

ignoring history, by taking our modern definition of “service” and superimposing it over

the word’s historical meaning. When, over the course of many decades, our court, the

Supreme Court and the courts of many other states discussed imposing on foreign

corporations a requirement to designate an agent for “service,” they understood that doing

so would subject the corporation to jurisdiction by consent. Corporations understood that

too; PRCI’s argument—rejected by our Court—was that its consent to jurisdiction was

limited to injuries arising from its operations in New York, not that it hadn’t consented to

jurisdiction at all. Bagdon did not establish a rule that registration (and with it appointment

of an agent for service of process) constituted consent to jurisdiction—that rule was long

established by our prior precedents and approved by the Supreme Court. Bagdon extended

the consent to causes of action unrelated to a defendant’s activities in New York.

       The majority rests its misinterpretation of Bagdon on the proposition that PRCI’s

“presence in New York was not in dispute” and that it had “conceded that it was doing

business in New York” (majority op at 9). Thus, the majority explains, our court in Bagdon

                                            - 16 -
                                            - 17 -                                    No. 54

found jurisdiction not because PRCI had consented to it by registering to do business here,

but because PRCI had conceded it was present here and then accepted service of process

here. The problem with the majority’s confection is that actual presence in New York was

legally irrelevant at the time because consent-by-registration statutes had rendered them

so. Nearly forty years before Bagdon, the United States Supreme Court explained:

              “It is unnecessary to inquire whether these several companies
              were inhabitants of the district. . . . [T]hat question, we think,
              was settled in Railroad Company v. Harris, [79 US (12 Wall.)
              65 (1870)]. . . . The Baltimore and Ohio Railroad Company, a
              Maryland corporation, was authorized by Congress to
              construct and extend its railroad into the District of Columbia.
              Harris, having been injured while travelling as a passenger
              upon the railroad outside of the District, sued the company in
              the Supreme Court of the District, and caused the writ to be
              served upon the president of the company within the District.
              The company objected to the jurisdiction of the court, and
              insisted that it was neither an inhabitant of nor found within the
              District. In ruling upon this objection, we held that, although
              the company was a foreign corporation, it was suable in the
              District, because it had in effect consented to be sued there, in
              consideration of its being permitted by Congress to exercise
              therein its corporate powers and privileges”

(Schollenberger, 96 US at 375-376). Thus, given the historical legal import of registering

to do business and appointing an agent to receive service, Bagdon’s holding is in no way

dependent on PRCI’s physical presence in New York. Indeed, the majority does not

dispute that even today, a corporation with no presence in New York could consent to

personal jurisdiction here (majority op at 4 n 1). But this is not that case: like PRCI, Ford

and Goodyear admit they are doing business in New York too; Ford and Goodyear

concededly have substantial business operations and have deliberately “serve[d] a market

                                            - 17 -
                                            - 18 -                                     No. 54

for a product in a State” (Ford Motor Co. v Montana Motor Co. v Montana Eighth Jud.

Dist. Ct., 141 S Ct 1017, 1022 [2021]).

       In short, a proper reading of Bagdon shows that we were not examining whether

papers had been delivered in a manner that gave Constitutionally sufficient notice of suit

(majority op at 8-10). Rather, in Bagdon, we were analyzing whether it was fundamentally

fair for a New York court to exercise jurisdiction over a Pennsylvania corporation that had

allegedly breached a contract arising from work done in Pennsylvania for that corporation

by a New York resident. We emphatically said “yes,” because PRCI had consented to

jurisdiction in our courts by registering to do business in New York.

       When one understands the history of corporate structure and liability predating

Bagdon, the majority’s attempt to brush it aside as a case about the “effect” of service falls

apart. Before Bagdon, without consent, the fact that a foreign corporation did business in

New York would not have allowed for jurisdiction over it for causes of action that did not

arise from its operations in New York.1 Mr. Bagdon could not have argued that New York

1
  The majority badly misconstrues Gaboury v Central Vermont Railway Co. (250 NY 233
[1929]) (majority op at 11 n 5). First, Gaboury came to us on a certified question restricted
to the identity of the party that had been served: “Was valid service of process in this action
made upon the defendant?” (id. at 234). Our answer was that, because the railroad
corporation was under a receivership ordered by the federal court, service on a corporate
officer was ineffective: “an order had been made whereby [the corporate officer] was
forbidden to interfere with the receivers who had supplanted him” (id. at 237). Gaboury,
therefore, has no holding related to the sufficiency of doing business in New York as a
basis for the assertion of jurisdiction.
        Second, as is clear from the Appellate Division decision we reversed, the defendant
railroad was deemed to be doing business in the state because a federal statute provided a
basis for jurisdiction:
        “[T]his action was then brought in Schenectady county, this State, under the
        Federal Employers’ Liability Act [“FELA”]. The action could be brought in
                                            - 18 -
                                           - 19 -                                    No. 54

had jurisdiction over PRCI if PRCI had not consented via registration; PRCI could not have

argued that service—the delivery of papers providing sufficient notice—was improper

once it registered. The dispute was purely one of jurisdiction: Mr. Bagdon argued that

jurisdiction existed by virtue of consent even though the work he performed for PRRI took

place in Pennsylvania; PRCI argued that its consent to jurisdiction via registration did not

extend to a cause of action based on work done solely in Pennsylvania, even though it

conducted unrelated business in New York.

       this State, if defendant was doing business within the State [citation to FELA
       omitted]. Defendant railroad is located, mostly, in Vermont, but extends into
       Clinton county, this State, where it operates engines and trains in yard service
       and in switching and making up trains and where it owns property and pays
       taxes”
(Gaboury v Cent. Vt. R. Co., 225 App Div 145, 146 [3rd Dept 1928]). There is no reason
to think that the doing-business test under FELA was the same as the doing-business test
under New York state law at the time; because railroads are engaged in interstate
commerce, the federal government has the power to authorize state court jurisdiction over
federal claims even where state court jurisdiction might be lacking absent a federal statute.
       Finally, even if the tests were the same, the majority has taken words from our
decision in Gaboury out of context. We wrote:
       “A foreign corporation, to be subject to the service of process in New York,
       must have so acted as to have subjected itself to the jurisdiction of the State.
       It does so act when at the time of service it is doing business within our
       borders under the protection of our laws. Even then, there are nice
       distinctions as to the extent of its submission when the cause of action is
       unrelated to the business here transacted”
(Gaboury, 250 NY at 236 [emphasis added] [citing Bagdon and Tauza]). The italicized
words, omitted by the majority, disprove its interpretation. “Under the protection of our
laws” means that the corporation had registered to do business in New York—otherwise,
the corporation could not sue in New York courts and enjoy the protection of our laws. In
addition, as Judge Cardozo was careful to point out, when the cause of action was unrelated
to a defendant’s business in New York, “nice distinctions” sometimes prevented the
assertion of jurisdiction.

                                           - 19 -
                                            - 20 -                                     No. 54

                                              C

       The majority’s suggestion that International Shoe, in liberalizing specific

jurisdiction, eliminated the need for jurisdiction through consent is both irrelevant and

misleading (majority op at 13-14). It is irrelevant because, while the need for jurisdiction

by consent has indeed been reduced, it has not been eliminated by the expansion of specific

jurisdiction. For example, had this accident occurred in New York, before International

Shoe the only way to assert jurisdiction over these defendants would have been by consent

through registration. Today, if the accident had occurred in New York, specific jurisdiction

over Ford and Goodyear would exist in New York. But reduced need for jurisdiction by

consent and legal invalidity of jurisdiction by consent are two wholly different matters. If

Bagdon were decided today, a court could find neither general nor specific jurisdiction in

New York: the defendant was a Pennsylvania company; the contract was to be performed

in Pennsylvania; and the fact that the company had business operations in New York would

not have been sufficient to confer general jurisdiction on it. Thus, there are classes of cases

like Bagdon—or this case—as to which jurisdiction by consent remains crucial. Why

should these New York plaintiffs be able to sue both Goodyear and Ford in Virginia but

not New York? What superior claim to “fair play and substantial justice” lies in Virginia?

       More troublingly, International Shoe simply does not say what the majority claims

it says. The Supreme Court said:

              “Finally, although the commission of some single or
              occasional acts of the corporate agent in a state sufficient to
              impose an obligation or liability on the corporation has not
              been thought to confer upon the state authority to enforce
              it, Rosenberg Bros. & Co. v. Curtis Brown Co., 260 U.S. 516,

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                                           - 21 -                                    No. 54

              other such acts, because of their nature and quality and the
              circumstances of their commission, may be deemed sufficient
              to render the corporation liable to suit. Cf. Kane v. New Jersey,
              242 U.S. 160; Hess v. Pawloski, supra. True, some of the
              decisions holding the corporation amenable to suit have been
              supported by resort to the legal fiction that it has given its
              consent to service and suit, consent being implied from its
              presence in the state through the acts of its authorized
              agents. Lafayette Insurance Co. v. French, 18 How. 404,
              407; St. Clair v. Cox, supra, 356; Commercial Mutual
              Co. v. Davis, supra, 254; Washington v. Superior Court, 289
              U.S. 361, 364-365. But more realistically it may be said that
              those authorized acts were of such a nature as to justify the
              fiction. Smolik v. Philadelphia & Reading Co., 222 F. 148,
              151. Henderson, The Position of Foreign Corporations in
              American Constitutional Law, 94-95”

(International Shoe, 326 US at 318-319). A careful study of the paragraph and the

authorities it cites demonstrates the opposite of the majority’s conclusion, namely: a state

may subject foreign corporations to personal jurisdiction as a condition of doing business

within its borders. First, the Court contrasted Rosenberg Bros. & Co. v Curtis Brown Co.

(260 US 516, 518 [1923]), where the defendant Oklahoma company had “never applied,

under the foreign corporation laws, for a license to do business in New York” and therefore

was not subject to personal jurisdiction here, with three cases involving out-of-state

motorists (not corporations) over whom personal jurisdiction was deemed to exist by virtue

of statutes conditioning use of the roads on registration (Kane v New Jersey, 242 US 160

[1916]), or deeming use of the roads as consent (Hess v Pawloski, 274 US 352 [1927]), or

holding that consistent with due process, New York could impose liability on the New

Jersey owner of a vehicle who loaned it to a New Jersey resident who drove it into New

York and injured a New Yorker (Young v Masci, 289 US 253 [1933]). Those cases establish

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the power of states to impose personal jurisdiction as a condition of use of the state’s

facilities, where the absence of a condition (as in Rosenberg) would render personal

jurisdiction unavailable.

       Next, the Court collected several cases (Lafayette Ins. Co, 59 US [18 How.] 404; St.

Clair, 106 US 350; Commercial Mutual Acc. Co v Davis, 213 US 245 [1909]; Washington

v Superior Court, 289 US 361 [1933]) that upheld the assertion of personal jurisdiction

over foreign corporations on the basis of the actual or implied appointment of an agent

within the state for service of process. Note, importantly, that the Court did not describe

consent in those cases as consent to service only, but rather as “consent to service and suit”

(International Shoe, 326 US at 318 [emphasis added]).

       Finally, the Court pointedly explained, “those authorized acts were of such a nature

as to justify” the finding of jurisdiction (id. at 318-19). The two citations following that

sentence, one to (then Federal District) Judge Learned Hand’s decision in Smolik v

Philadelphia Reading Coal & Iron Co. (222 F 148 [SD NY 1915]), the other to a treatise

by Gerald Carl Henderson, offer further insight into the Court’s conclusion. In Smolik, the

defendant (PRCI again) executed a broad written consent to jurisdiction and argued that it

should be limited in the same way New York had limited its implied consent to jurisdiction.

Judge Hand rejected that argument, holding that whereas the implied consent, “[b]eing a

mere creature of justice . . . will have such consent only as justice requires,” whereas the

“actual consent in the cases at bar has no such latitudinarian possibilities” (id. at 151). Mr.

Henderson’s book, at the pages cited by the Court, contrasts Smolik to Judge Cardozo’s

decision in Bagdon, emphasizing our court’s holding that “the actual appointment of an

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agent manifests consent quite independently of any law. In the words of Judge Cardozo,

speaking for the Court of Appeals, ‘The stipulation is, therefore, a true contract. The person

designated is a true agent. The consent that he shall represent the corporation is a real

consent’” (Henderson at 94-95). In contrasting Judge Hand’s and Judge Cardozo’s

approaches and synthesizing them by stating that the authorized acts of registration

realistically justified the exercise of jurisdiction, International Shoe reaffirmed the validity

and vitality of Bagdon’s consent-based jurisdiction.

                                               D

       Courts and scholars have routinely read Bagdon as establishing jurisdiction by

consent through registration (see, e.g., Serov ex rel. Serova v Kerzner Intern. Resorts, Inc.,

43 NYS3d 769 [Sup Ct 2016] [collecting cases and scholarship]; Muollo v Crestwood Vil.,

Inc., 155 AD2d 420, 421 [2d Dept 1989] [“It is true that a foreign corporation is deemed

to have consented to personal jurisdiction over it when it registers to do business in New

York and appoints the Secretary of State to receive process for it pursuant to Business

Corporation Law §§ 304 and 1304”]; Le Vine v Isoserve, Inc., 334 NYS2d 796, 799 [Sup

Ct 1972] [“When a foreign corporation is licensed to do business in New York, it consents

to be sued on causes of action arising within and without the State.” (citing Bagdon)];

Republique Francaise v Cellosilk Mfg. Co., 124 NYS2d 93, 99 [Sup Ct 1953], revd on

other grounds 284 App Div 699 [1st Dept 1954], revd on other grounds 309 NY 269 [1955]

[“(J)urisdiction which cannot be acquired by law may be conferred by consent of the

parties; and even where the consent is given because it must be given in order to obtain

desired benefits or avoid undesired discomforts, it still is consent and effective as

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such . . . .” (citing Bagdon)]; Brown v Lockheed Martin Corp., 814 F3d 619, 640 [2d Cir

2016] [“Jurisdictions other than Connecticut have enacted registration statutes that more

plainly advise the registrant that enrolling in the state as a foreign corporation and

transacting business will vest the local courts with general jurisdiction over the corporation.

The registration statute in the state of New York has been definitively construed to

accomplish that end . . . .” (citations omitted)]; Vincent C. Alexander Practice

Commentaries, McKinney’s Cons Laws of NY, CPLR 301:8 [hereinafter “Alexander

Practice Commentaries”] [“Certainly in New York, foreign corporations have been on

notice since 1916 that their registration to do business here constitutes consent to the

general jurisdiction of the courts.”]; Oscar G. Chase, Consent to Judicial Jurisdiction: The

Foundation of Registration Statutes, 73 NYU Ann Surv Am L 159, 168 [2018] [“New

York . . . is one of the states that treats registration as consent to general jurisdiction.”]).

       On several occasions, the United States Supreme Court has understood Bagdon as

establishing a consent-based rule for jurisdiction. One year after Bagdon, the Court

validated general jurisdiction by consent in Pennsylvania Fire Insurance Co. of

Philadelphia v Gold Issue Mining & Milling Co. (243 US 93, 94 [1917]). In that case, an

Arizona corporation filed suit in a Missouri court seeking coverage from a Pennsylvania

insurance company that had insured its building in Colorado (id.; see also Gold Issue Min.

& Mill. Co. v Pennsylvania Fire Ins. Co. of Phila., 267 Mo 524 [1916]). The Pennsylvania

defendant was registered to do business in Missouri (Penn. Fire, 243 US at 94). The Court

held that jurisdiction in Missouri was proper because “when a power actually is conferred

by a document, the party executing it takes the risk of the interpretation that may be put

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upon it by the courts. The execution was the defendant’s voluntary act” (id. at 96). That

“document” was a power of attorney “filed with the superintendent of the insurance

department” in compliance with the governing business registration statute “consenting

that service of process upon the superintendent should be deemed personal service upon

the company” (id.).

       Two decades later in Neirbo Co. v Bethlehem Shipbuilding Corp. (308 US 165

[1939]), the Court considered New York’s business registration statute and reaffirmed that

consent through corporate registration is a valid and constitutional basis for general

jurisdiction. It reiterated: “A statute calling for such a designation is constitutional, and

the designation of the agent ‘a voluntary act’” (id. at 175 [citing Penn. Fire and Bagdon]).

As Justice Frankfurter explained:

              “It took half a century of litigation in this Court finally to
              confer on a corporation, through the use of a
              fiction, citizenship in the chartering state for jurisdictional
              purposes.        Throughout, the mode of thought was
              metaphorical. The classic doctrine was that a corporation
              ‘must dwell in the place of its creation, and cannot migrate to
              another sovereignty.’ Logically applied, this theory of non-
              migration prevented suit in a non-chartering state, for the
              corporation could not be there. And such was the practice of
              the circuit courts until the opinion of Chief Justice Waite in Ex
              parte Schollenberger displaced metaphor with common
              sense. The essential difference between the practice which Mr.
              Justice Nelson initiated at circuit and the decision
              in Schollenberger’s case was not a matter of technical legal
              construction, but a way of looking at corporations. Men’s
              minds had become habituated to corporate activities which
              crossed state lines. The fact that corporations did do business
              outside their originating bounds made intolerable their
              immunity from suit in the states of their activities. And so they
              were required by legislatures to designate agents for service of
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              process in return for the privilege of doing local business. That
              service upon such an agent, in conformity with a valid state
              statute, constituted consent to be sued in the federal court and
              thereby supplanted the immunity as to venue, was the rationale
              of Schollenberger’s case”

(id. at 169-170 [citations omitted]).
       Our legislature has made it clear, starting in 1853 and reiterated several times

thereafter, that its purpose in requiring foreign corporations registering to do business here

is to subject them to jurisdiction here. Our court repeatedly construed the statute that way;

the Supreme Court acknowledged and supported the theory behind that construction; our

lower courts and commentators have understood it that way. Only the majority does not,

and to what end? To compel the legislature to re-enact the statute using the contemporary

word “jurisdiction” because the majority refuses to recognize that, 150 years ago, “service”

meant “jurisdiction”? The majority plainly understands that the legislature’s intent when

it enacted and re-enacted the registration requirement was to establish jurisdiction over

foreign corporations, not to save the cost of a process server.

                                             IV

       Contrary to Ford and Goodyear’s arguments, personal jurisdiction conferred

through consent by registration is neither coerced nor an impermissible burden on interstate

commerce.

       As the United States Supreme Court has recently articulated, “unconstitutional

conditions” cases are ones in which “someone refuses to cede a constitutional right in the

face of coercive pressure” (Koontz v St. Johns Riv. Water Mgt. Dist., 570 US 595, 607, 133
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S Ct 2586, 2596 [2013]). Ford and Goodyear have identified no authority supporting their

assertion that they are being forced to cede a constitutional right. Nor do they face coercive

pressure. Ford and Goodyear incorrectly frame their choice as “consent to general

jurisdiction or stop doing business in New York.” They are correct they have a choice,

which itself undermines their coercion argument. But their choice is much less severe: it

is to consent to personal jurisdiction or forfeit the ability to initiate an action in New York’s

courts if the court finds that the corporation is doing business without having registered

(NY Bus Corp L § 1312). Indeed, corporations derive the greater benefit in their bargain

with the State. A corporation may do business here without registering—thereby rendering

itself immune to suit here on causes of action beyond the jurisdiction of our courts—until

the moment it decides it wants to sue in New York, and then it can register. In addition,

nothing deprives a corporation from making non-jurisdictional arguments to move a suit

out of New York; for example, forum non conveniens remains an available tool to litigants.

It is New York State that bears the cost if its residents are unable to recover against an

unregistered corporate defendant.

       Further, when New York courts have found that a plaintiff foreign corporation is

“doing business in New York without having qualified pursuant to BCL § 1312,” they have

held that the “appropriate remedy was not outright dismissal of the complaint, but a

conditional dismissal or a stay affording plaintiff an opportunity to cure this non-

jurisdictional defect, i.e., to obtain the requisite authority” (Tri-Term. Corp. v CITC Indus.,

Inc., 78 AD2d 609, 609 [1st Dept 1980]). Such a consequence does not render their consent

coerced. Although the majority is correct that BCL § 1303 provides that the Attorney

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General “may” initiate suit to restrain a foreign corporation from doing business in the state

without registering (majority op at 8 n 4), the concern is overstated. When the legislature

added to BCL§ 1303 this “[n]ew ground[] for enjoining the corporation,” it noted that

“[s]uch action by the attorney-general is permitted where the foreign corporation’s

authority was obtained through a fraudulent misrepresentation or a concealment of a

material fact, or, where it has done or omitted any act for which a domestic corporation

could be dissolved . . . .” (see Fifth Interim Rep of Joint Legis Comm to Study Rev of Corp

Laws, 1961 NY Legis Doc No 12 at 76-77). In other words, BCL § 1303 contemplates the

Attorney General’s action when a corporation is engaged in some type of illegal conduct—

not merely conducting business in New York without registering. The sole lawsuit in

which the Attorney General sought to restrain a foreign corporation under BCL § 1303 in

the past fifty years confirms that understanding. In that lawsuit, the corporation, in addition

to doing business in New York without first registering, was also alleged to have

“repeatedly and persistently engaged in conduct amounting to common-law or statutory

fraud,” “repeatedly and persistently engaged in deceptive acts or business practices,” and

“repeatedly and consistently engaged in false advertising” (People ex rel. Cuomo v

Nationwide Asset Services, Inc., 26 Misc 3d 258, 263 [Sup Ct 2009]). For doing business

in New York without first registering, the corporation was “permanently enjoined from

doing business in New York State unless and until they obtain authorization to do so” (id.

at 281). Again, such a consequence does not render a corporation’s consent coerced.

       Likewise, Ford and Goodyear’s interstate commerce claim is without merit. The

governing rule, which Ford and Goodyear do not cite, is that when a “statute regulates

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even-handedly to effectuate a legitimate local public interest, and its effects on interstate

commerce are only incidental, it will be upheld unless the burden imposed on such

commerce is clearly excessive in relation to the putative local benefits” (Pike v Bruce

Church, Inc., 397 US 137, 142 [1970]). Although New York’s rule of jurisdiction through

consent does impose some burden, it conveys a benefit as well: access to New York’s

courts. Ford and Goodyear have not shown how their burden of defending this lawsuit in

New York, where their products are regularly sold and used, is “clearly excessive”

compared to legitimate local interests, which include leveling the playing field among all

corporations that do business here, whether they are foreign or domestic.

                                             V

       New York requires that foreign corporations wishing to do business here renew their

registrations every two years. Ford first registered here in 1920, Goodyear in 1956. They

each renewed their registrations many times; both re-registered in 2014. Plaintiffs filed

this lawsuit in 2015. As regards the disposition of this case, the question is not what this

Court decides registration means starting today, but rather what registration meant in 2015,

when this suit was filed.

       Unquestionably, today’s holding puts future registrants on notice that, by

registering, they are not consenting to jurisdiction here. But there is nothing to which Ford

and Goodyear could point, or have pointed, to show such a position would have been

reasonable in 2015. Until today, Bagdon’s rule of general jurisdiction by consent through

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registration was “well settled” (Alexander Practice Commentaries).          No intervening

Supreme Court case law has overturned it. Ford and Goodyear had been given sufficient

notice “to structure their primary conduct with some minimum assurance as to where that

conduct will and will not render them liable to suit” (Daimler, 571 US at 139 [quoting

Burger King Corp. v Rudzewicz, 471 US 462, 472 (1985)]). That is, they could have chosen

not to do business in New York, or continued to do business in New York without

registering and lost only the ability to bring suit in the courts of New York. For reasons of

their own, good or bad, they opted to register in New York.            Both employ highly

sophisticated counsel, who could have (and perhaps did) advise them in 2014 as to the legal

effect of New York’s registration statute. It would strain credulity to argue that Ford and

Goodyear believed they had not, in fact, consented to jurisdiction in our courts—and they

have made no such showing nor even such an argument. What the broader record does

suggest, however, is that had these plaintiffs brought this suit in Virginia, where the

accident occurred but no plaintiff or defendant resided, Ford and Goodyear likely would

have claimed that the Virginia courts lacked personal jurisdiction—the position Ford took

in 2018, and the United Sates Supreme Court rejected this year, in Ford v Montana (141 S

Ct 1017).

       More than a century ago, our court correctly interpreted our legislature as having

ensured that residents of New York, injured by corporations that had registered to do

business here and chosen to take advantage of our laws, could seek judicial relief here,

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even if the injury took place somewhere else. Query what offends fair play and substantial

justice.

Order affirmed, with costs. Opinion by Judge Singas. Chief Judge DiFiore and Judges
Fahey, Garcia and Cannataro concur.
Judge Wilson dissents in an opinion, in which Judge Rivera concurs.

Decided October 7, 2021

                                          - 31 -