Lilliаn FIGUEROA, Plaintiff-Adverse Party, v. BNSF RAILWAY COMPANY, a Delaware corporation, Defendant-Relator.
(CC 15CV13390; SC S063929)
IN THE SUPREME COURT OF THE STATE OF OREGON
March 2, 2017
361 Or 142
KISTLER, J.
En Banc. Original proceeding in mandamus. Argued and submitted November 10, 2016.
Stephen C. Thompson, Kirklin Thompson & Pope, LLP, Portland, argued the cause and filed the brief for adverse party. Also on the brief was Kristen A. Chambers.
Robyn Ridler Aoyagi, Tonkon Torp LLP, Portland, filed the brief for amicus curiae Washington Legal Foundation.
Lisa T. Hunt, Law Office of Lisa T. Hunt, Lake Oswego, filed the brief for amicus curiae Oregon Trial Lawyers Association.
KISTLER, J.
Peremptory writ to issue.
Walters, J., concurred and filed an opinion, in which Brewer, J., joined.
* On petition for writ of mandamus from an order of Multnomah County Circuit Court, Christopher J. Marshall, Judge.
Case Summary: Plaintiff brought this action in Oregon against a foreign corporation to recover for injuries that she sustained in Washington. The corporatiоn moved to dismiss because Oregon lacks general jurisdiction over it. The trial court denied the motion, and the Supreme Court issued a peremptory writ of mandamus to the trial court. Held: (1) Under Daimler AG v. Bauman, 571 US ___, 134 S Ct 746, 187 L Ed 2d 624 (2014), a state ordinarily can exercise general jurisdiction in one of two places: where the corporation is incorporated and where it maintains its principal place of business; (2) this case does not come within the limited exception recognized in Daimler to that rule: Oregon cannot be considered a surrogate for the corporation‘s state of incorporation or principal place of business; and (3) appointing a registered agent for receipt of process pursuant to
Peremptory writ to issue.
KISTLER, J.
Oregon requires that foreign corporations doing business in this state appoint a registered agent to receive service of process.
Plaintiff was working for BNSF Railway Company in Pasco, Washington, where she was repairing a locomotive engine. To perform the repair, she had to stand on a portable stair placed on a catwalk on the locomotive. While she was reaching up to remove an engine part, the “portable stair supplied by [BNSF] rolled or kicked out from under [p]laintiff,” causing her to sustain substantial injuries. Plaintiff alleged that her “injuries resulted in whole or in part from [BNSF‘s] negligence in failing to provide [her] with a safe place to work, and with safe tools and equipment.” For the purposes of this case, we assume that those allegations are true.
BNSF is a foreign corporation. It is incorporated in Delaware and has its principal placе of business in Fort Worth, Texas.3 Plaintiff brought this action against BNSF in Oregon to recover for the injuries that she sustained in Washington. When BNSF moved to dismiss for lack of personal jurisdiction, plaintiff advanced three arguments. She argued: (1) that BNSF‘s activities in this state were sufficient for Oregon courts to exercise general jurisdiction over it; (2) that the Federal Employees Liability Act, 35 Stat 65, as amended, codified as
I. OREGON‘S REGISTRATION STATUTE
As noted above, our holding in this case turns on the legislature‘s intent in enacting
A. Text
“The registered agent appointed by a foreign corporation authorized to transact business in this state shall be an agent of such corporation upon whom any process, notice or demand required or permitted by law to be served upon the corporation may be served.”
Textually,
By its terms,
B. Context
Context includes “‘the preexisting common law and the statutory framework within which the law was enacted.‘” Stevens v. Czerniak, 336 Or 392, 401, 84 P3d 140 (2004) (quoting Denton and Denton, 326 Or 236, 241, 951 P2d 693 (1998)). In this case, there are three contextual sources that bear on the interpretation of
1. Constitutional limitations on jurisdiction over foreign corporations
Between the enactment of the first comprehensive Oregon corporation statute in 1903 and the first major revision of that statute in 1953, the terms on which state courts could constitutionally exercise personal jurisdiction over foreign corporations changed. A brief discussion of that change in constitutional law is necessary to put the corresponding changes to Oregon‘s registration statutes in perspective.
In 1878, the United States Supreme Court held that the Due Process Clause places geographical limits on a state‘s exercise of jurisdiction over persons and property. Pennoyer, 95 US at 722-23; see Burnham v. Superior Court of Cal., Marin County, 495 US 604, 110 S Ct 2105, 109 L Ed 2d 631 (1990) (plurality) (describing Pennoyer). Regarding personal jurisdiction, the Court recognized that a state can adjudicatе transient claims (negligence claims, breach of contract claims, and the like) against nonresident defendants (natural persons) if those persons were served within the state‘s geographical boundaries.4 Pennoyer, 95 US at 733; see Burnham, 495 US at 617 (plurality). Under Pennoyer, a person‘s presence within the state‘s territorial boundaries gave the state authority to adjudicate transient claims against that person, and service while the person was within the state‘s jurisdiction perfected that authority.
Pennoyer did not consider when a state can exercise personal jurisdiction over foreign corporations. Before International Shoe Co. v. Washington, 326 US 310, 66 S Ct 154, 90 L Ed 95 (1945), the cases that addressed that issue started from the proposition that a corporation was subject to suit only in the state where it was incorporated. See St. Clair v. Cox, 106 US 350, 354, 1 S Ct 354, 27 L Ed 222 (1882) (discussing earlier decisions). As the Court explained, however, “[t]he doctrine of the exemption of a сorporation
from suit in a State other than that of its creation was the cause of much inconvenience and often of manifest injustice.” Id. To avoid that problem, two related but separate theories for acquiring jurisdiction over foreign corporations developed.
One theory was based on implied consent. See St. Clair, 106 US at 354-55; The Lafayette Insurance Co. v. French, 59 US (18 How) 404, 407-08, 15 L Ed 451 (1855). Consent was implied either because the foreign corporation was doing business in the state or because the corporation had complied with a state statute requiring that it appoint a registered agent in the state to receive service of process. See William F. Cahill, Jurisdiction over Foreign Corporations, 30 Harv L Rev 676, 690 (1917); Joseph Henry Beale, The Law of Foreign Corporations § 280 (1904) (consent implied from merely doing business in a state). The other theory was based on presence. A foreign corporation that was doing business in a state was present in that state in much the same way that a natural person was. Compare International Harvester v. Kentucky, 234 US 579, 34 S Ct 944, 58 L Ed 1479 (1914) (continuous сourse of soliciting business and delivering machines in Kentucky was sufficient to establish that the corporation was doing business there and thus present), with Green v. Chicago, Burlington & Quincy Ry., 205 US 530, 533-34, 27 S Ct 595, 51 L Ed 916 (1907) (soliciting business alone in a state insufficient to establish that the corporation was “doing business” there). If the foreign corporation‘s in-state agent was served with process while the corporation was doing business in the state, then the state courts could adjudicate transient claims against it. Id.
Because both implied consent and presence rested on the premise that a foreign corporation was “doing business” in a state, the line between the two theories was not always distinct. See Tauza v. Susquehanna Coal Co., 220 NY 259, 115 NE 915 (1917) (reasoning that the defendant did sufficient business within New York to be subject to its jurisdiction under International Harvester and that it was amenable to general jurisdiction as a result of a state registration statute). Additionally, the cases were not аlways consistent regarding the consequences of the two theories. For example, a 1904 treatise explained that the majority rule was that a foreign corporation that was doing business in a jurisdiction impliedly consented to general jurisdiction. Beale, The Law of Foreign Corporations § 280. The minority rule was that a foreign corporation doing business in a state was subject only to specific jurisdiction—a rule that Oregon initially followed. Id. (noting minority rule); see Farrell v. Oregon Gold Co., 31 Or 463, 49 P 876 (1897)
Before 1945, whether consent was manifested by appointing a registered agent pursuant to a state statute varied according to the terms of the statute. In 1882, the Court stated, as a general proposition, that foreign corporations that appointed a registered agent as a condition of doing business cоnsented to specific jurisdiction. See St. Clair, 106 US at 356 (so stating). Later, in reconciling potentially divergent decisions, the Court explained:
“Unless the state law either expressly or by local construction gives to the appointment [of a registered agent] a larger scope, we should not construe it to extend to suits in respect of business transacted by the foreign corporation elsewhere.”
Mitchell Furn. Co. v. Selden Breck Co., 257 US 213, 216, 42 S Ct 84, 66 L Ed 201 (1921). However, if a state statute made general jurisdiction the consequence of appointing a registered agent, then complying with the statute would constitute consent to general jurisdiction. Pennsylvania Fire Insurance Co. v. Gold Issue Mining Co., 243 US 93, 37 S Ct 344, 61 L Ed 610 (1917). Finally, the Court recognized that, even though a foreign corporation had consented to jurisdiction by appointing a registered agent, it was not subject to the state‘s jurisdiction if it were no longer “doing business” in the state when the action was filed. Chipman, Ltd. v. Jeffery Co., 251 US 373, 379, 40 S Ct 172, 64 L Ed 314 (1920); see Mitchell Furn. Co., 257 US at 216 (recognizing
that qualifiсation). That is, the foreign corporation‘s consent, manifested by appointing a registered agent, was not sufficient standing alone to give the forum general jurisdiction over the corporation. Chipman, Ltd., 251 US at 379.6
In 1945, the Court recast the constitutional bases on which a state can exercise personal jurisdiction over nonresident defendants. See International Shoe, 326 US at 316-19. It explained that presence within the jurisdiction was no longer a necessary prerequisite to jurisdiction over a nonresident defendant. Id. at 316. It reasoned that, for foreign corporations, the “terms ‘present’ or ‘presence’ are used merely to symbolize those activities of the corporation‘s agent within the state which courts will deem to be sufficient to satisfy the demands of due process.” Id. at 316-17. Similarly, it recognized that “some of the decisions holding a corporation amenable tо 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.” Id. at 318. The Court explained that “more realistically it may be said that those authorized acts were of such a nature as to justify the fiction.” Id.7
The Court thus shifted the federal constitutional basis for exercising jurisdiction over foreign corporations away from conclusory terms like “presence” and legal fictions like “implied consent” and grounded it instead on an assessment
the due process clause to insure.” Id. at 319. As the Court explained:
“[T]o the extent that a corporation exercises the privilege of conducting activities within a state, it enjoys the benefits and protection of the laws of that state. The exercise of that privilege may give rise to obligations, and, so far as those obligations arise out of or are connected with the activities within the state, a procedure which requires the corporation to respond to a suit brought to enforce them can, in most instances, hardly be said to be undue.”
Id. It followed, the Court explained, that courts will have specific jurisdiction “when the activities of the corporation [in the forum state] have not only been continuous and systematic, but also give rise to the liabilities sued on.” Id. at 317. The Court also recognized that “there have been instances in which the continuous corporate operations within a state were thought so substantial and of such a nature as to justify suit against it on causes of action arising from dealings entirely distinct from those aсtivities.” Id. at 318.
With that federal constitutional background in mind, we turn to Oregon law between 1903 and 1953.
2. Oregon law between 1903 and 1953
In 1903, the legislature enacted Oregon‘s first comprehensive statute regulating domestic corporations and foreign corporations doing business here. Or Laws 1903, p 39. Among other things, the 1903 act required foreign corporations doing business in Oregon to appoint a registered agent in this state to receive service of process. Id., pp 44-45, § 6. Specifically, section 6 of the 1903 act provided that, as a condition of doing business in Oregon, foreign corporations:
“shall duly execute and acknowledge a power of attorney *** [which] shall appoint some person, who is a citizen of the United States and a citizen and resident of this state, as attorney in fact for such foreign corporation, *** and such appointment shall be deemed to authorize and empower such attorney to accept service of all writs, process, and summons, requisite or necessary to give complete jurisdiction of any such corporation *** to any of the courts of this state or United States courts therein, and shall be deemed to constitute such attorney the authorized agent of
such corporation *** upon whom lawful and valid service may be made of all writs, process, and summons in any action, suit, or proceeding, commenced by or against any such corporation *** in any court mentioned in this section, and necessary to give such court complete jurisdiction thereof.”
Id.
Section 6 was written broadly. It required that the corporation‘s registered agent (its attorney in fact) be authorized to accept process “in any action, suit, or proceeding” that was “necеssary to give [an Oregon] court complete jurisdiction” over the foreign corporation. Building on that statute, plaintiff contends that, in 1915, this court held that appointing a registered agent pursuant to section 6 constituted consent to general jurisdiction in Oregon. See Ramaswamy v. Hammond Lumber Co., 78 Or 407, 152 P 223 (1915). In our view, this court‘s decision in Ramaswamy stands for a more limited principle than plaintiff perceives.8 However, a 1928 decision, which plaintiff did not cite, provides greater support for her position. See State ex rel. Kahn v. Tazwell, 125 Or 528, 266 P 238 (1928), overruled in part on other grounds, Reeves v. Chem Industrial Co., 262 Or 95, 100-01, 495 P2d 729 (1972). We accordingly describe that decision briefly and then turn to the third contextual source that bears on our inquiry—the revision of Oregon‘s corporations act in 1953.
In Kahn, the plaintiff (who was not a resident of Oregon) filed an action in Oregon to recover on an insurance policy that the defendant (a New York corporation) had issued to the plaintiff in Germany. 125 Or at 531-32. The defendant was doing business in this state and had аppointed a registered agent to receive process pursuant to a statute governing foreign insurers, which was essentially
identical to section 6 of the 1903 act. See id. at 533-34 (setting out the registration statute applicable to foreign insurance companies).9 This court held that service on the defendant‘s registered agent in Oregon gave this state jurisdiction over the defendant and that Oregon had “jurisdiction of the subject matter of the action, notwithstanding the fact that the contract of insurance was executed outside the state, and notwithstanding the fact that the plaintiff is a nonresident of the State of Oregon.” Id. at 542.
In reaching that holding, this court touched on a variety of theories and sources. Among other things, it noted that foreign corporations that do business in a jurisdiction consent to be sued there either as a result of doing business in the state or as a result of appointing a registеred agent as a condition of doing business. See id. at 538, 541. It also noted cases standing for the proposition that foreign corporations doing business in a state are present there. Id. at 537-38, 540. After citing a variety of legal sources, including various legal encyclopedias, the court concluded that Oregon had jurisdiction over the defendant to adjudicate a cause of action that arose in Europe. Id. at 542.
The decision in Kahn lacks a clear analytical thread. It consists of a compilation of theories and authorities that reflect, in many ways, the varied theories for exercising jurisdiction over foreign corporations that the federal and state courts had articulated in the early part of the twentieth century. It is difficult to say, however, that Kahn does not stand for the proposition that, by appointing a registered agent pursuant to a statute virtually identical to section 6 of the 1903 act, the defendant consented to general jurisdiction in Oregon. Id. at 542. That theory and others run through the decision. We accordingly assume, for the purposes of deciding this case, that Kahn stands for the proposition that appointing a registered agent pursuant to the 1903 act constitutes implied consent to general jurisdiction. The question that remains is whether that interpretation of
the 1903 act continues to inform our understanding of
3. Oregon law after 1953
Fifty years after it passed the 1903 corporations act, the Oregon legislature undertook a major revision of that act. See Or Laws 1953, ch 549. In 1953, it enacted the Oregon Business Corporation Act, which it modeled on the 1950 Model Business Corporation Act drafted by the American Bar Association (ABA). See Meyer v. Ford Industries, 272 Or 531, 535, 538 P2d 353 (1975) (so noting). The 1953 Oregon Business Corporation Act addressed domestic and foreign corporations separately. Seе Or Laws 1953, ch 549, §§ 98-116 (setting out provisions for foreign corporations separately from the previous provisions that had addressed domestic corporations).
Unlike the 1903 corporations act, the 1953 act required both domestic and foreign corporations to appoint a registered agent in
“The registered agent so appointed by a corporation shall be an agent of such corporation upon whom any process, notice or demand required or permittеd by law to be served upon the corporation may be served.”
Id. § 13; see
“The registered agent so appointed by a foreign corporation authorized to transact business in this state shall be an agent of such corporation upon whom any process, notice or demand required or permitted by law to be served upon the corporation may be served.”
Or Laws 1953, ch 549, § 107; see
With that context in mind, we turn to whether this court‘s interpretation of the 1903 act (or its counterpart for insurers) in Kahn informs our understanding of
a. Textual differences between the 1953 and 1903 acts
“such appointment *** shall be deemed to constitute such attorney the authorized agent of such corporation *** upon whom lawful and valid service may be made of all writs, processes, and summons in any action *** in any court commenced *** against any such corporation, *** and necessary to give such court complete jurisdiction thereof.”
Id. (emphasis added). As the court observed in Kahn, the terms that the 1903 legislature used were “‘broad and comprehensive.‘” 125 Or at 538 (quoting Ramaswamy, 78 Or at 419). Not only did the 1903 act provide that appointing a registered agent for service of process would give Oregon courts “complete jurisdiction” over a foreign corporation, but it specified that it would do so “in any action *** in any court” in this state.
The current statute, by сontrast, is worded more modestly. As discussed above,
b. Changing due process limitations on jurisdiction
As discussed above, in 1856 and again in 1882, the United States Supreme Court recognized that foreign corporations that appointed an agent to receive service of process impliedly consented to the state court‘s jurisdiction. St. Clair, 106 US at 356; The Lafayette Insurance Co., 59 US (18 How) at 407. Implied consent was one way of avoiding the immunity from suit that foreign corporations otherwise would enjoy outside the state of their incorporation. See St. Clair, 106 US at 356. When Oregon enacted its registration statute for foreign corporations in 1903, it joined a growing number of states seeking to make foreign corporаtions amenable to suit within their state. See Cahill, Jurisdiction over Foreign Corporations, 30 Harv L Rev at 690 n 31 (listing Oregon as one of 37 jurisdictions that, by 1917, had adopted such statutes).
Oregon‘s 1953 corporations act and the 1950 model act on which it was based were written after the Court decided International Shoe in 1945. That decision grounded jurisdiction on the foreign corporation‘s contacts within the state instead of basing jurisdiction on fictions like implied consent. After International Shoe, a state need not resort to statutes, like Oregon‘s 1903 act, that provided that service on the foreign corporation‘s registered agent would lead to “complete jurisdiction” over the corporation. Given that shift in understanding, it should come as no surprise that the 1950 model corporation act adopted by Oregon in 1953 omitted any reference to service conferring jurisdiction over a foreign corporation. That is, International Shoe provides a complete explanation for the shift in wording between the 1903 and the 1953 corporate registration statutes.
c. Equivalent provisions for domestic and foreign corporations
A third contextual clue points in the same direction. As noted, Oregon‘s 1953 act requires both domestic and foreign corporations to appoint a registered agent. It also defines, in provisions that are essentially identical, the function that the registered agent serves for both domestic and foreign corporations. The 1953 act provides that a corporation‘s registered agent, whether appointed by a domestic or by a foreign corporation, “shall be an agent of such corporation upon whom any process, notice or demand required or permitted by law to be served upon the corporation may be served.”
Beсause a state already has jurisdiction over domestic corporations, there is no need to require a domestic corporation to appoint a registered agent in order to obtain jurisdiction over the corporation, nor is there any reason to assume that, in appointing such an agent, a domestic corporation impliedly consents to jurisdiction. It follows that, when the 1953 Oregon legislature required that registered agents appointed by domestic corporations be authorized to receive “any process, notice or demand required or permitted by law to be served upon the corporation,” it presumably did so for the sole purpose of having an easily identifiable
person within the state upon whom process could be served. Unless the model act and the Oregon legislature intended to require an unnecessary act, requiring a domestic corporation to appoint a registered agent for receipt of service does not constitute consent to jurisdiction.
The same terms that apply to domestic corporations in
For the reasons discussed above, the text and the context of
C. Legislative history
There is little Oregon-specific history for the 1953 corporations act. We know that, in 1951, the Oregon State Bar committee on corporation law was studying the ABA‘s 1950 Model Business Corporation Act. Oregon State Bar, Committee Reports 11 (1951). The committee hoped to present “a draft of a Revised Corporation Code” to the 1952 Bar Convention. Id. We also know that, in 1953, the Oregon legislature adopted the Oregon Business Corporation Act based on the ABA‘s model act. Beyond that, there are no records of the legislative proceedings that led to the adoption of the 1953 Oregon Business Corporation Act.
Previously, this court has looked to the comments to the model act to determine the legislature‘s intent in enacting the Oregon Business Corporation Act. See Meyer, 272 Or at 536 & n 5 (looking to that source); cf. Datt v. Hill, 347 Or 672, 680, 227 P3d 714 (2010) (considering, as legislative history, the comments to a uniform act that Oregon adopted).14 We follow that course here. Section 11 of the model act requires domestic corporations to “have and continuously maintain” a registered office and a registered agent. American Law Institute, Model Business Corporation Act § 11 at 12 (revised 1950). Section 13 provides that the registered agent appointed by a domestic corporation “shall be an agent of such corporation upon whom any process, notice or demand required or permitted by law to be served upon the corporation may be served.” Id. at 13. The comment to those sections explains:
“Any notice or process required or permitted by law may be served upon the registered agent (Section 13). The name and address of the initial agent must be stated in the articles of incorporation (clause (j) of Section 48) and any
change of the name or address of the agent must be filed with
the Secretary of State (Section 12). Failure to appoint and maintain such an agent subjects the corporation to involuntary dissolution (clause (d) of Section 87).”
Id. at 12.
The cоmment to sections 11 and 13 is brief. As the committee that drafted the act noted, the primary function of the comments is to “explain the interrelations of [the] Sections to other Sections of the Model Act, with a minimum of editorial comment.” Id. at x (preface). The committee explained that it “consider[ed] that in all other respects the provisions speak for themselves.” Id. Taking the committee at its word, we conclude from the text of sections 11 and 13 and the comment to them that the purpose of requiring domestic corporations to appoint and maintain a registered agent was to provide an easily identifiable person upon whom process could be served. Nothing in the text of those provisions or the comment suggests that, by requiring domestic corporations to appoint a registered agent for service of process, the corporation consented to jurisdiction.
The model act imposes the same requirements on foreign corporations. Section 106 requires that foreign corporations authorized to transact business in a state “have and continuously maintain” in that state a registered office and a registered agent. Id. at 92-93. Section 108 provides for foreign corporations, as section 13 provided for domestic corporations, that the registered agent so appointed “shall be an agent of such corporation upon whom any process, notice or demand required or permitted by law to be served upon the corporation may be served.” Id. at 94. As with domestic corporations, the comment on those sections is brief. It states: “A foreign corporation is required to designate and maintain a registered office and agent in the State (Section 106) for service of process (Section 108).” Id. at 91.
The comment identifies the same purpose for requiring foreign corporations to appoint a registered agent that it does for domestic corporations—foreign corporations are required to designate a registered agent “for service of process.” We draw two inferences from that comment. First, if domestic corporations do not impliedly consent to
jurisdiction by appointing a registered agent, then neither do foreign corporations. Second, the only reason that the comment identifies for requiring foreign corporations to designate a registered agent is “for service of process.” The comment does not say that appointing a registered agent in a state cоnstitutes implied consent to jurisdiction.
As we read the comments to the model act, they support and are consistent with the conclusion that we draw from the text and context of Oregon‘s Business Corporation Act—appointing a registered agent for service of process serves the same purpose for foreign corporations that it serves for domestic corporations: It designates an easily identifiable person upon whom service may be made. It does not constitute implied consent to jurisdiction.
II. CONCLUSION
Considering the text of
Peremptory writ to issue.
WALTERS, J., concurring.
Giving effect, as I must, to the court‘s decision in Barrett v. Union Pacific Railroad Co., 361 Or 115, ___ P3d ___ (2017), I concur in the court‘s decision in this case.
Brewer, J., joins in this concurring opinion.