Cooper Tire & Rubber Co. v. Mccall

• Decision Date: 21 September 2021
• Docket Number: S20G1368
• Citation: 863 S.E.2d 81,312 Ga. 422
• Parties: COOPER TIRE & RUBBER COMPANY v. MCCALL.
• Court: Georgia Supreme Court

312 Ga. 422

863 S.E.2d 81

COOPER TIRE & RUBBER COMPANY

v.MCCALL.

S20G1368

Supreme Court of Georgia.

Decided: September 21, 2021

Christopher Scott Anulewicz, Balch & Bingham, LLP, 30 Ivan Allen Jr. Boulevard, NW, Suite 700, Atlanta, Georgia 30308, Eric D. Ruben, Douglas E. Horelick, Clyde & Co. US, LLP, 1221 Brickell Ave Ste 1600, Miami, Florida 33131-2374, for Appellant.

David Christopher Hanson, Weathington LLC, 191 Peachtree Street NE, Suite 3900, Atlanta, Georgia 30303, Jeffrey S. Ward, Drew, Eckl & Farnham LLP, 777 Gloucester Street, Suite 305, Brunswick, Georgia 31520, Elissa Blache Haynes, Drew, Eckl & Farnham LLP, 303 Peachtree Street NE, Suite 3500, Atlanta, Georgia 30308, Philip Michael Thompson, Ellis Painter Ratterree & Adams LLP, 2 East Bryan Street, 10th Floor, Savannah, Georgia 31401, Brandon Ryan Keel, King & Spalding, 1180 Peachtree Street NE, Atlanta, Georgia 30309, William V. Custer, IV, Christian James Bromley, Bryan Cave Leighton Paisner LLP, One Atlantic Center, Fourteenth Floor, 1201 West Peachtree Street, N.W., Atlanta, Georgia 30309-3471, Rocco Eugene Testani, Sutherland, Asbill & Brennan, LLP, 999 Peachtree Street, N.E., Suite 230, Atlanta, Georgia 30309-3996, for Amicus Appellant.

Cale Howard Conley, Scott A. Farrow, William Kent Owens, Jr., Conley Griggs Partin LLP, 4200 Northside Parkway, NW, Suite 300, Building 1, Atlanta, Georgia 30327, for Appellee.

Darren Wade Penn, Penn Law LLC, 4200 Northside Parkway, NW, Building One, Suite 100, Atlanta, Georgia 30327, Larry Coben, Anapol Weiss, 8700 E. Vista Bonita Drive, Suite 268, Scottsdale, Arizona 85255, Lyle Griffin Warshauer, Warshauer Law Group, PC, 2740 Bert Adams Road, Atlanta, Georgia 30339, James E. Butler, Jr., Tedra L. Cannella, Ramsey B. Prather, Rory A. Weeks, Butler, Wooten & Peak LLP, 2719 Buford Highway, Atlanta, Georgia 30324, Joseph M. Colwell, Joel O. Wooten, Jr., Butler, Wooten & Peak LLP, 105 Thirteenth Street, P. O. Box 2766, Columbus, Georgia 31902, Robert Henry Snyder, Jr., Schreeder, Wheeler, & Flint, LLP, 1100 Peachtree Street NE, Suite 800, Atlanta, Georgia 30309, for Amicus Appellee.

LaGrua, Justice.

We granted certiorari in this products liability action against an out-of-state corporation to reconsider one of our holdings in Allstate Insurance Co. v. Klein , 262 Ga. 599, 422 S.E.2d 863 (1992). In Klein , we held that Georgia courts may exercise general personal jurisdiction over any out-of-state corporation that is "authorized to do or transact business in this state at the time a claim or cause of action arises." Id. at 601, 422 S.E.2d 863 (citation and punctuation omitted). As discussed below, although Klein ’s general-jurisdiction holding is in tension with a recent line of United States Supreme Court cases addressing when state courts may exercise general personal jurisdiction over out-of-state corporations in a manner that accords with the due process requirements of the United States Constitution, Klein does not violate federal due process under Pennsylvania Fire Insurance Co. of Philadelphia v. Gold Issue Mining & Milling Co. , 243 U. S. 93, 37 S.Ct. 344, 61 L.Ed. 610 (1917), a decision that the Supreme Court has not overruled. Thus, we are not required to overrule Klein as a matter of binding federal constitutional law. We also decline to overrule Klein as a matter of statutory interpretation. Therefore, we affirm the Court of Appeals’ decision, which followed Klein .

The Court of Appeals summarized the undisputed underlying facts and procedural history of this case as follows:

[Florida resident] Tyrance McCall sued Cooper Tire & Rubber Company ("Cooper Tire") and two other defendants in the State Court of Gwinnett County for injuries he allegedly sustained in a motor vehicle collision.

...

McCall's complaint alleges that on April 24, 2016, he was a passenger in a vehicle that was equipped with a rear tire designed, manufactured, and sold by Cooper Tire. As the vehicle was traveling on a Florida roadway, the tire tread "suddenly failed and separated from the remainder of the tire." The driver lost control of the vehicle, which left the roadway and rolled over until it came to rest in a nearby wooded area. McCall sustained severe injuries in the crash.

Following the collision, McCall sued Cooper Tire for negligence, strict product liability, and punitive damages. He also asserted claims against the driver, a Georgia resident, and the Georgia car dealership that sold the vehicle to the driver. Cooper Tire answered the complaint, raising numerous defenses, including lack of personal jurisdiction. It also filed a motion to dismiss, arguing that as a nonresident corporate defendant with only minimal contacts in Georgia, it is not subject to personal jurisdiction in this state. An accompanying affidavit from Cooper Tire's corporate counsel established that Cooper Tire is incorporated in Delaware and maintains its principal place of business in Ohio.

McCall responded that Cooper Tire is a resident of Georgia – and thus subject to personal jurisdiction here – because it is authorized to transact business in the state. In its reply, Cooper Tire did not dispute that it has been authorized to transact business in Georgia at all times relevant to this suit. It argued, however, that such circumstances do not make it a Georgia resident for jurisdictional purposes. The trial court agreed and granted Cooper Tire's motion to dismiss.

McCall v. Cooper Tire & Rubber Co. , 355 Ga. App. 273, 273-274, 843 S.E.2d 925 (2020). On appeal, the Court of Appeals reversed the trial court, concluding that under Klein , "Cooper Tire is a resident corporation subject to personal jurisdiction in this state, [and] the trial court erred in granting the motion to dismiss." Id. at 275, 843 S.E.2d 925.

We granted Cooper Tire's petition for a writ of certiorari. For the reasons that follow, we conclude that, although Klein ’s general-jurisdiction holding is in tension with the trajectory of recent United States Supreme Court decisions addressing a state's authority to exercise general personal jurisdiction over corporations, Klein cannot be overruled on federal constitutional grounds.¹ And, considerations of stare decisis counsel against overruling Klein ’s holding as a matter of statutory construction. Accordingly, as held by the Court of Appeals, Cooper Tire is currently subject to the general jurisdiction of our courts under Klein .

1. The seminal case of Pennoyer v. Neff , 95 U. S. 714, 24 L.Ed. 565 (1878), established the parameters governing a state court's authority to assert personal jurisdiction over an out-of-state defendant in accordance with the Due Process Clause of the Fourteenth Amendment to the United States Constitution. Under that framework, due process of law required either the "voluntary appearance" of the out-of-state defendant or personal service of process upon the out-of-state defendant to bring the defendant within the state's jurisdiction and allow the defendant to be "personally bound by any judgment rendered." Id. at 733-734 (citation and punctuation omitted).

As recently noted by Justice Gorsuch, in the years after Pennoyer , interstate commerce and the development of corporations continued to rise in this country, and thus, many states faced an increase in legal conflicts involving out-of-state corporate defendants in their courts. See Ford Motor Co. v. Montana Eighth Judicial Dist. Court , ––– U.S. ––––, 141 S.Ct. 1017, 1037, 209 L.Ed.2d 225 (2021) (Gorsuch, J., concurring). "States sought to obviate any potential question about corporate jurisdiction by requiring an out-of-state corporation to incorporate under their laws too, or at least designate an agent for service of process." Id. "[T]he idea was to secure the out-of-state company's presence or consent to suit" in that state. Id.

During this time period, the Supreme Court issued its decision in Pennsylvania Fire and formalized the concept of general corporate jurisdiction by "consent." See Pennsylvania Fire , 243 U.S. at 94, 37 S.Ct. 344. In Pennsylvania Fire , an out-of-state insurance company obtained a license to do business in Missouri and, in compliance with Missouri's corporate statute, Rev. Stats. Mo., 1909, § 7042, filed a power of attorney "consenting that service of process upon the superintendent [of the insurance department] should be deemed personal service upon the company so long as it should have any liabilities outstanding in the [s]tate." Id. The lawsuit at issue was commenced through service of process upon the superintendent, and the insurance company argued that "such service was insufficient" and that, "if the statute were construed to govern the present case[,] it encountered the 14th Amendment by denying to the defendant due process of law." Id. at 94-95, 37 S.Ct. 344. After the Supreme Court of Missouri held that the statute was applicable and consistent with the United States Constitution, the insurance company appealed to the United States Supreme Court. See id. at 95, 37 S.Ct. 344.

In affirming the Missouri Supreme Court, the United States Supreme Court held:

The construction of the Missouri statute thus adopted hardly leaves a constitutional question open. The defendant had executed a power of attorney that made service on the superintendent the equivalent of personal service. If by a corporate vote it had accepted service in this specific case there would be no doubt of the jurisdiction of the state court over a transitory action of contract. If it had appointed an agent authorized in terms to receive service in such cases, there would be equally little doubt. It did appoint an agent in language that rationally might be held to go to that length. The language has been held to go to that length, and the construction did not deprive the defendant of due process of law even if it took the defendant by surprise, which we have no warrant to assert.

Pennsylvania Fire , 243 U. S. at 95, 37 S.Ct. 344. Thus, under the holding of Pennsylvania...