Tag Jurisdiction is Taking the Fun Out of Doing Business in Georgia
By: Coryne Levine
In 2023 the U.S. Supreme Court opened the door for “tag jurisdiction” in the case of Mallory v. Norfolk Southern Railway Co., 600 U.S. 122 (2023). Since that holding, a new opinion issued by Georgia’s Southern District Court has ensured tag jurisdiction remains alive and well, making it easier than ever for a business to be sued in Georgia.
The due process clause of the Constitution requires that a court have: (a) jurisdiction over the subject matter of a suit; and (b) jurisdiction over all parties involved. The latter of these two is referred to as personal jurisdiction.1 For courts to have personal jurisdiction over a company, the court must also be able to exercise specific jurisdiction and general jurisdiction.2 Specific jurisdiction applies wherein the party bringing the suit presents claims that arise from the company’s conduct in the state.3 General jurisdiction, sometimes referred to as all-purpose jurisdiction, allows for a corporation to be sued for its conduct anywhere in the world, regardless of whether the conduct is directly connected to the state, so long as the suit is brought in the company’s “home state.”4 Per the U.S. Supreme Court, a company’s home state is wherever it is incorporated or wherever its principal place of business (i.e. headquarters) is located.5
A new way to meet the requirements of general personal jurisdiction has arisen in Georgia case law: consent by registration, colloquially referred to as tag jurisdiction. Consent by registration is simple. If a company is registered to do business in a state, they have consented to general personal jurisdiction in that state’s courts. In other words, tag jurisdiction allows a court to preside over a corporation regardless of the amount of business it does in the state and irrespective of the claims presented in the lawsuit.
While this may sound unfair, the U.S. Supreme Court has given consent by registration the green light in their 2023 holding of Mallory v. Norfolk Southern Railway Co. In that case, the U.S. Supreme Court upheld a Pennsylvania law that outlined certain out-of-state businesses would be subjected to personal jurisdiction by simply registering to do business with the Secretary of State.6 Essentially, they reasoned companies choose to register to do business in a given state and therefore also choose to make themselves amenable to that state’s courts.7
Unlike Pennsylvania, Georgia’s allowance for consent by registration has been implicit. There is no statutory provision that explicitly outlines tag jurisdiction, like the situation in Mallory; rather, it is encompassed entirely in case precedent.8 The U.S. Supreme Court recognized this lack of a memorialized rule in the Mallory opinion and in the dissent, but none of the Justices shared whether such an implicit rule was constitutional.9 Nonetheless, it could be inferred from the Mallory opinion the implicit nature of consent by registration could be a future problem for Georgia courts.
Seeming to take the hint, the United States District Court’s Southern District of Georgia appears to have found a way to ensure tag jurisdiction remains alive in Georgia.
In November 2023, the District Court in Sloan v. Burist, 2:22-CV-76, 2023 WL 7309476 (S.D. Ga. Nov. 6, 2023) ruled on several motions to dismiss a lawsuit arising from a fatal accident involving a tractor-trailer on I-95 in Camden, Georgia.10 The driver of the tractor-trailer worked for Mayflower, a Virginia-based company, and the plaintiffs in the suit were residents of Florida and South Carolina.11 Mayflower argued Georgia courts were unable to exercise general jurisdiction over it.12 The District Court disagreed and pointed to O.C.G.A. § 14-2-1501(a):
A foreign corporation may not transact business in this state until it obtains a certificate of authority from the Secretary of State.
The Sloan v. Burist Court reasoned this provision was “almost identical” to the Pennsylvania provision ruled on in Mallory.13 Therefore, not only was consent by registration in Georgia per O.C.G.A. § 14-2-1501(a) constitutional, but Mayflower’s active registration with Georgia’s Secretary of State at the time of the accident was sufficient for the Georgia federal courts to exercise general jurisdiction over Mayflower.14
It is hard to agree with the Sloan Court’s holding. The Georgia provision highlighted by the court is far from identical to the Pennsylvania provision. For one, the Pennsylvania provision starts as follows: “The existence of any of the following relationships between a person and this Commonwealth shall constitute a sufficient basis of jurisdiction . . .”15 There is no similar verbiage in O.C.G.A. § 14-2-1501(a). The Sloan Court even admitted as much in their opinion, however, they did not offer any reasoning as to how these provisions should still be treated as identical.16
It is unlikely the U.S. Supreme Court will grant certiorari if Mayflower appeals, so we expect this holding to be binding in Georgia for the foreseeable future. As such, the cost of doing business in Georgia has drastically increased; simply registering with Georgia’s Secretary of State now comes with increased litigation potential.
1 See Int’l Shoe Co. v. State of Wash., Office of Unemployment Comp. & Placement, 326 U.S. 310 (1945).
2 See Id.
3 Ford Motor Co. v. Mont., Eighth Judicial Dist. Ct., 592 U.S. 351, 357-59 (2021).
4 Int’l Shoe Co., 326 U.S. at 317; Ford Motor Co. 592 U.S. at 358.
5 Ford Motor Co. 592 U.S. at 359.
6 See Mallory v. Norfolk Southern Railway Co., 600 U.S. 122, 135 (2023).
7 Id.
8 The Georgia Supreme Court has openly recognized the implicit nature of consent by registration: “Georgia's Business Corporation Code does not expressly notify out-of-state corporations that obtaining authorization to transact business in this State . . . subjects them to general jurisdiction in our courts.” Cooper Tire & Rubber Co. v. McCall, 863 S.E.2d 81, 90 (Ga. 2021). But holdings by the Georgia Supreme Court should “notify out-of-state corporations that their corporate registration will be treated as consent to general personal jurisdiction.” Id.
9 See Mallory, 600 U.S. at 128, 173 n.2 (2023); Georgia and Pennsylvania appear to be the only states that permit consent by registration.
10 Sloan v. Burist, 2:22-CV-76, 2023 WL 7309476, at *2 (S.D. Ga. Nov. 6, 2023).
11 Id. at *1.
12 Id. at *3; Mayflower’s Motion to Dismiss also argued that specific jurisdiction was lacking, but their argument was weak. The accident happened while the tractor-trailer was operating to the benefit of Mayflower on Georgia’s roads, so the claims presented were clearly based on conduct in Georgia thusly warranting an exercise of specific personal jurisdiction by Georgia Courts. See Id. at *6.
13 Id. at *4.
14 Id. at *5.
15 42 Pa. C.S.A. § 5301.
16 Id. at *4.
Attorney Contact Info
Coryne Levine
coryne.levine@swiftcurrie.com
404.888.6258