Governor Hochul Vetoes Bill Requiring Foreign Corporations to Consent to General Jurisdiction in New York Courts | Goldberg Segalla

On December 22, 2023, New York Gov. Kathy Hochul vetoed Senate Bill S7476, which provided that a foreign corporation’s application for authority to do business in New York constitutes consent to jurisdiction of New York courts. According to the New York Senate, the purpose of the bill was to allow New York residents to sue foreign corporations authorized to do business in New York in state courts, rather than elsewhere at potentially great expense and inconvenience.

Senate Bill S7476 was introduced on May 30, 2023 – just under a month before the US Supreme Court’s decision in Mallory v. Norfolk Southern Railway Co. (covered by the Asbestos Case Tracker here), which held that states can require foreign corporations to consent to general personal jurisdiction as a condition of registering to do business in that state. Under this “consent-by-registration” theory of personal jurisdiction, if a business is registered in a state, anyone can bring a lawsuit in that state against that business for anything – even if the case has nothing to do with that state, and none of the parties live in that state. Prior to Mallory, state courts were split on whether the due process clause allowed states to adopt “consent-by-registration” laws. Mallory, however, held that state statutory schemes that explicitly put foreign corporations on notice that registering to do business in the state renders them amenable to general jurisdiction does not run afoul of due process concerns.

Since Mallory, the New York Senate introduced two bills seeking to require foreign corporations to consent to jurisdiction as a requirement for doing business in the state. The governor has vetoed both bills, including S7476. Thus, for now, the November 2021 New York Court of Appeals decision in Aybar v. Aybar (which held that foreign corporations do not consent to general jurisdiction simply by registering to do business in New York and designating an agent for service of process) remains the law regarding general jurisdiction in New York.

In the wake of Mallory, we expect more states to consider “consent-by-jurisdiction” laws. In New York, given the two prior attempts at establishing the same, we expect the legislature to continue its effort to create an express statutory consent-by-registration rule. The Asbestos Case Tracker will continue to monitor this issue.