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Every attorney recalls the hal-cyon days of law school when we werelectured ad nauseum on the topic ofpersonal jurisdiction. Those lessonsbegan with Pennoyer v. Neff, an opin-ion concerning state sovereignty thatheld a court only had jurisdictionover persons within the confines ofthe state in which the court sat.Eventually we tracked our waythrough Supreme Court case afterSupreme Court case until we got tothe 1945 decision International ShoeCo. v. Washington, which many of usfondly refer to this day as

“International Shoe.” InternationalShoe greatly expanded uponPennoyer, holding that a court couldexercise personal jurisdiction over anout-of-state defendant if the defen-dant had “certain minimum contactswith the state such that the mainte-nance of the suit does not offend tra-ditional notions of fair play andsubstantial justice.” Through the years, the federalcourts have attempted to define whatthose “certain minimum contacts” areand more importantly, how “tradi-tional notions of fair play and substan-

tial justice” may or may not be of-fended. International Shoe differenti-ated between what we now call“specific jurisdiction,” which is wherethe activities giving rise to the lawsuitoccurred within the forum state and“general jurisdiction,” which is wherea defendant’s activities within a stateare so “continuous and systematic” asto render them “essentially at home”in the state, thus allowing the state tohave personal jurisdiction over claimsirrespective of where the activities giv-ing rise to the suit occurred. Generaljurisdiction is the much more hotly

Christopher H. Lee Cooch and Taylor, P.A.

AND WHY THAT’S GOOD FOR YOU

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debated of the two categories of personal ju-risdiction and the Supreme Court has onceagain provided us with guidance on thisissue in two recent decisions. In 2011, the Supreme Court held thata court may have jurisdiction over a corpo-ration only when the corporation’s affilia-tions with the state are so “constant andpervasive as to render it essentially at homein the forum state.” So, as you can see, theCourt expanded from “continuous and sys-tematic” to “constant and pervasive.” Whatdid this mean? Well, it’s hard to say and wasagain left to the lower federal courts to fig-ure out. In 2014, the Supreme Court, appar-ently realizing the position they had put thelower courts in, issued a new holding ongeneral personal jurisdiction in which theyclarified what “constant and pervasive”means. In Daimler A.G. v. Baumann, the na-tion’s highest court rejected Baumann’s ar-gument that California courts had personaljurisdiction over Daimler simply becauseDaimler “engages in a substantial, continu-ous and systematic course of business” inthat state. Rather, the question was whetherDaimler’s affiliations with California were socontinuous and systematic as to render it athome there. In the next sentence of theopinion, the Court makes clear that theonly questions regarding “affiliations” thatmatter for purposes of general jurisdictionare whether or not Daimler was incorpo-rated or principally headquartered inCalifornia. As a result of Daimler v. Baumann, ab-sent specific jurisdiction, i.e., where the de-fendant’s (alleged) liability causing act wascommitted within the confines of the state,the only way a state will have personal juris-diction over a defendant is when the defen-dant is incorporated or has its principalplace of business within the state.1

So now that the personal jurisdictionprimer is over, the next logical question is,“why does this matter to me?” The answer issimple. Your company or your insured isprobably going to be sued at some point.Where your company or your insured getssued will matter greatly because you willwant the most effective and efficient courtsto preside over those claims. Daimler tellsus that absent specific jurisdiction, the onlycourts that will have personal jurisdictionover your company or your insured will bethe courts of the state in which they are in-corporated or principally headquartered.This is where Delaware and its business

friendly courts come into play. Currently, more than 60% of Fortune500 companies are incorporated inDelaware and overall, there are more thanone million businesses that have chosenDelaware as their preferred place of incor-poration. There are a number of reasonsbusinesses choose Delaware, including ourbusiness friendly corporation laws, our verywell respected Superior Court, Court ofChancery and Supreme Court and addition-ally, our long-standing collaborative legaltradition.2 More specifically, there are tworelatively newly created judicial avenues thatDelaware companies frequently take advan-tage of with great result.

COMPLEX COMMERCIAL LITIGATIONDOCKET In 2010, the Delaware Superior Courtcreated a new type of docket to deal specif-ically with complex commercial litigationreferred to as the Complex CommercialLitigation Docket or CCLD. Pursuant to the Delaware SuperiorCourt, “Any case that includes a claim as-serted by any party (direct or declaratoryjudgment) with an amount in controversyof $1 million or more (designated in thepleadings for either jury or non-jury trials),or involves an exclusive choice of courtagreement or a judgment resulting from anexclusive choice of court agreement, or isso designated by the President Judge, qual-ifies for assignment to the CCLD. Excluded cases include any case con-taining a claim for personal, physical ormental injury; mortgage foreclosure ac-tions; mechanics’ lien actions; condemna-tion proceedings; and any case involving anexclusive choice of court agreement wherea party to the agreement is an individual act-ing primarily for personal, family, or house-hold purposes or where the agreementrelates to an individual or collective con-tract of employment.” At its core, the CCLD gives litigants amore structured and expeditious schedulewhich incorporates agreed upon and writ-ten protocols for handling discovery dis-putes, dispositive motions, electronicdiscovery, protective orders, ADR, trial con-duct, streamlining presentation of evidence,pre and post-trial briefing and jury selec-tion. Very little is left to chance and litigantswill be able to appropriately set their expec-tations for the course of the litigation andany potential disputes that may arise alongthe way.

DELAWARE RAPID ARBITRATION ACT Created by the Delaware legislatureand codified as 10 Del.C. 5801-5812, thepurpose of the DRAA “is to give Delawarebusiness entities a method by which theymay resolve business disputes in a prompt,cost-effective, and efficient manner,through voluntary arbitration conducted byexpert arbitrators, and to ensure rapid res-olution of those business disputes.” Parties may agree to arbitrate underthe DRAA so long as both parties agree inwriting, at least one party is a business entity,no party to the agreement is consumer, theagreement provides it shall be governedunder the laws of the State of Delaware andthe agreement expressly references the“Delaware Rapid Arbitration Act.” Upon entering into the agreement, theparties confer jurisdiction upon theDelaware Court of Chancery to appoint anarbitrator within 30 days of the petitionbeing made, enter judgment, enforce a sub-poena and determine an arbitrator’s fees. Achallenge to the arbitrator’s award may betaken to the Delaware Supreme Court within15 days of the issuance of the award unlessthe arbitration agreement expressly statesthat there shall be no appeal of an award. Unlike the CCLD, which expedites thelitigation process, the DRAA allows partiesto completely bypass the traditional litiga-tion process, but in a structured settingoverseen by the respected Court ofChancery. It also allows for appellate reviewby Delaware’s Supreme Court unless ofcourse, the agreement states otherwise. These two structured, expeditious andthorough tools give businesses that findthemselves “at home” in Delaware twounique and cost advantageous avenues inwhich to resolve their disputes. It may betrue that not everyone wants to make theirpersonal home in the First State, but thereare certainly benefits for businesses thatfind themselves litigating here.

Christopher Lee is aDirector with Cooch andTaylor, P.A. in theirWilmington, Delaware, of-fice. Chris has considerableexperience representingclients in toxic tort, profes-sional liability, construc-

tion defect, personal injury and commercialdispute matters. Chris has represented clients inall of Delaware’s courts both directly and aslocal counsel and has first chair jury trial ex-perience. He is admitted to practice in Delawareand North Carolina.

1 Although currently before two separate appellate courts is the issue of whether registering to do business in a stateconstitutes consent to jurisdiction regardless of where you’re headquartered.

2 A 2015 U.S. Chamber of Commerce survey ranked Delaware first for the fairness and reasonableness of the state’slegal system, rating the state number one for the 10th consecutive time since the periodic surveys began in 2002.