Earlier this month, Nevada Assemblymember Erica Roth introduced a bill, A.B. 158, to authorize Nevada courts to exercise general personal jurisdiction over entities on the sole basis that the entity:
- is organized, registered or qualified to do business pursuant to the laws of this State;
- expressly consents to the jurisdiction; or
- has sufficient contact with Nevada such that the exercise of general personal jurisdiction does not offend traditional notions of fair play and substantial justice.
The following entities would be covered by the statute: corporations, miscellaneous organizations described in chapter 81 of NRS, limited-liability companies, limited-liability partnerships, limited partnerships, limited-liability limited partnerships, business trusts or municipal corporations created and existing under the laws of this State, any other state, territory or foreign government or the Government of the United States
The last basis is generally consistent with traditional constitutional jurisprudence. See Int’l Shoe Co. v. Washington, 326 U.S. 310, 316 (1945) quoting Milliken v. Meyer, 311 U. S. 457, 463 (1940). California has codified this principle in Section 410.10 of the Code of Civil Procedure (“A court of this state may exercise jurisdiction on any basis not inconsistent with the Constitution of this state or of the United States.”).
The penultimate basis is consistent with and might even be categorized as a subset of the last. How is fair play and substantial justice offended if an entity has consented?
The first basis hearkens to the U.S. Supreme Court’s decision in Mallory v. Norfolk Southern Ry. Co., 600 US 122 (2023). In the case, the Supreme Court in a 5-4 decision held that a Pennsylvania statute did not offend the Due Process clause of the United States Constitution. The Pennsylvania statute provided that a company’s registration as a foreign corporation” is deemed “a sufficient basis of jurisdiction to enable the tribunals of this Commonwealth to exercise general personal jurisdiction over” the corporation. 42 Pa. Cons. Stat. § 5301(a)(2)(i).
If A.B. 158 becomes law, the doors of Nevada’s courts will be thrown open to lawsuits against foreign entities that have registered to do business suits. These lawsuits may be brought even when the plaintiff, the defendant and the dispute occurred outside of Nevada. The case may be a boon to Nevada’s lawyers (Assemblymember Roth is a lawyer), but may have the unintended consequence of discouraging business in Nevada or encouraging creative business structures.