Narrowing the Scope of Personal Jurisdiction

On May 11, 2017, the Arizona Court of Appeals held that foreign corporations are not subject to personal jurisdiction based on either the magnitude of the corporation’s business activities in the state or registration in Arizona, including appointment of an agent for service of process.

Plaintiff suffered a slip-and-fall in an Oregon Wal-Mart store. Plaintiff filed suit against, inter alia, Wal-Mart Stores, Inc. (“Wal-Mart”), which is incorporated in Delaware and maintains its principal place of business in Arkansas. As the accident occurred outside the state, specific jurisdiction did not exist. The only issue was whether Arizona courts could exercise general jurisdiction over Wal-Mart.

The Court addressed two potential grounds for general jurisdiction. First, the Court held that the magnitude of a business’s activities in the state cannot confer general jurisdiction. To be “at home” in the state requires something more, and will only exist in “extraordinary” cases. Wal-Mart’s operation of 127 retail stores was not enough. Second, the Court found that registration of an entity in Arizona does not establish consent to jurisdiction in the state. The Court noted that other states are split on this question and Arizona courts had not previously addressed it.

The Court declined to rule more broadly that, absent specific jurisdiction, foreign corporations may only be sued in their respective principal places of business and states of incorporation, but suggested that such cases would be rare. The opinion reflects the broader trend of narrowing the scope of personal jurisdiction seen in recent Supreme Court jurisprudence.