John D. Donovan, Jr. is partner in the litigation department, and Gregg L. Weiner is co-head of the business & commercial litigation practice, at Ropes & Gray LLP. This post is based on a Ropes & Gray memorandum by Mr. Donovan and Mr. Weiner. This post is part of the Delaware law series; links to other posts in the series are available here.
On April 18, 2016, the Delaware Supreme Court held that corporations not incorporated in Delaware that register to do business in that state are not subject to the “general” jurisdiction of the Delaware courts. In Genuine Parts Co. v. Cepec, the Court held that under the U.S. Constitution, Delaware’s business registration statute cannot be read to constitute a “consent” to general jurisdiction by out-of-state corporations. Business conduct in Delaware leading to a claim—and not just registration to do business—is now the key to the Delaware courthouse door for plaintiffs seeking to sue in that forum. As one of the most important jurisdictions addressing claims against business entities, Delaware now joins the growing list of states that will refuse to adjudicate cases arising out of business activity conducted elsewhere, and that has nothing to do with the forum state.