Foreign Corporations Set to Be Subject to General Jurisdiction in NY

Foreign corporations, open your rolodexes. You will need New York counsel more than ever.

Days ago, New York Senate Bill S7476 was delivered to Governor Hochul for signature. If signed, the bill would make all foreign businesses authorized to do business in New York subject to general jurisdiction in the state’s courts. This is an about-face from, and likely a legislative response to, the New York Court of Appeals’ recent decision in Aybar, wherein the Court held that foreign businesses authorized to do business in the state are not subject to general jurisdiction here.

The bill appears to get its wings from Mallory, a U.S. Supreme Court decision coming after Aybar wherein the Court upheld another state’s statute that required foreign businesses to consent to general jurisdiction in that state if they registered to do business there. The bill seeks to amend the New York statute at issue in Aybar to make it mirror the statute at issue in Mallory.[1]

According to the legislature, New Yorkers should be able to sue foreign corporations authorized to do business in New York in the state’s courts and not be forced to litigate against those foreign corporations elsewhere at a great expense and inconvenience.

Prudent foreign corporations should retain New York counsel now, before the bill is signed and the floodgates open.

[1] We covered Aybar, Mallory, and the doctrine of general jurisdiction in previous publications. See https://www.rivkinradler.com/publications/u-s-supreme-court-diminishes-daimler-and-upends-aybar/#_ftnref1; https://www.rivkinradler.com/publications/foreign-corporations-dont-consent-to-general-jurisdiction-by-registering-in-ny/.