Genuine Parts Company v. Cepec, ___ A.3d ___, No. 528, 2015 (Apr. 18, 2016)
The Delaware Supreme Court reverses prior Delaware precedent and holds that a non-Delaware corporation which is registered to do business in Delaware is not subject to general jurisdiction in Delaware courts for activities having nothing to do with Delaware.
In 2015, Plaintiffs Ralph and Sandra Cepec, residents of the State of Georgia, instituted an asbestos personal injury action in the Superior Court of Delaware against seven defendants associated with installation, manufacture, and distribution of asbestos-containing products, claiming that Mr. Cepec developed mesothelioma as a result of exposure thereto. Among the seven defendants was Genuine Parts Company (“GPC”), a Georgia corporation which operated NAPA auto parts stores. Mr. Cepec’s alleged exposure to GPC’s asbestos-containing products took place while he was employed at a warehouse in Jacksonville, Florida. GPC has no corporate headquarters in Delaware, receives less than 1% of its revenues from Delaware, less than 1% of its stores are located in Delaware, and fewer than 1% of its employees work in Delaware. In compliance with Delaware law, GPC is registered to do business under 8 Del. C. § 371 and has a registered agent for service of process in Delaware under 8 Del. C. § 376. No negligence was claimed against GPC (or any other defendant) for actions arising or occurring in Delaware.
After Plaintiffs initiated their action, GPC moved to dismiss in the Superior Court for lack of general and specific jurisdiction pursuant to 10 Del. C. § 3104. Plaintiffs agreed that there was no specific jurisdiction over GPC because none of the allegedly negligent acts arose or occurred in Delaware. However, Plaintiffs – citing prior Delaware Supreme Court precedent, Sternberg v. O’Neill, 550 A.2d 1105 (Del. 1988) – argued that the Court had general jurisdiction over GPC by virtue of the fact that it had a registered agent in Delaware for service of process and had registered to do business in Delaware – and that by doing so, GPC had consented to jurisdiction in Delaware. The Superior Court agreed and denied GPC’s Motion to Dismiss.
GPC appealed to the Delaware Supreme Court, which reversed the Superior Court. The Supreme Court held that Sternberg was no longer tenable in light of the U.S. Supreme Court’s decision in Daimler AG v. Bauman, 134 S. Ct. 746 (2014). In Daimler, the U.S. Supreme Court held that, as a matter of due process, a corporation could be subject to general jurisdiction only where the corporation is incorporated or has its principal place of business – essentially, where the corporation is “at home.” The Delaware Supreme Court held that to interpret Delaware’s registration statute as providing general jurisdiction in Delaware over non-Delaware corporations for activities having no connection with Delaware was inconsistent with the limited scope of general jurisdiction enunciated by the Daimler Court. Therefore, the Delaware Supreme Court reversed the Superior Court as well as its prior holding in Sternberg.