IN THE
ARIZONA COURT OF APPEALS
DIVISION ONE
WAL-MART STORES, INC., Petitioner,
v.
THE HONORABLE KERSTIN LEMAIRE, Judge of the SUPERIOR
COURT OF THE STATE OF ARIZONA, in and for the County of
MARICOPA, Respondent Judge,
KATHI BUSS, Real Party in Interest.
No. 1 CA-SA 17-0003
FILED 5-11-2017
Petition for Special Action from the Superior Court in Maricopa County
No. CV2016-003627
The Honorable Kerstin G. LeMaire, Judge
JURISDICTION ACCEPTED, RELIEF GRANTED
COUNSEL
Lewis Roca Rothgerber Christie, LLP, Phoenix
By Craig W. Phillips, Lawrence A. Kasten, Jennifer Lee-Cota
Counsel for Petitioner
The Keating Law Firm, PLC, Scottsdale
By Kevin R. Keating
Counsel for Real Party in Interest
WAL-MART v. HON. LEMAIRE/BUSS
Opinion of the Court
OPINION
Presiding Judge Peter B. Swann delivered the opinion of the court, in which
Judge Kent E. Cattani and Judge Donn Kessler joined.
S W A N N, Judge:
¶1 Kathi Buss sued Wal-Mart Stores, Inc., a company
incorporated in Delaware with its principal place of business in Arkansas,
in Arizona over a slip-and-fall accident that occurred at a store in Oregon.
Wal-Mart filed a motion to dismiss for lack of jurisdiction, and the superior
court, relying on our opinion in Bohreer v. Erie Insurance Exchange, 216 Ariz.
208 (App. 2007), denied it, finding Wal-Mart was subject to general
jurisdiction in Arizona. Wal-Mart then filed a petition for special action.1
¶2 Because the facts of the case have no connection to Arizona,
Wal-Mart can be sued here only if the Arizona courts have general
jurisdiction over it. Buss maintains that Wal-Mart’s pervasive presence and
substantial business activities in Arizona are sufficient to create general
jurisdiction, and any claim against Wal-Mart is therefore cognizable in
Arizona. We disagree. In keeping with Goodyear Dunlop Tires Operations,
S.A. v. Brown, 564 U.S. 915 (2011), and Daimler AG v. Bauman, 134 S. Ct. 746
(2014), we hold that the magnitude of a corporation’s business activities in
Arizona is not sufficient to create general jurisdiction when that corporation
is neither incorporated nor has its principal place of business in Arizona.
We further hold that foreign corporations do not impliedly consent to
general jurisdiction in Arizona merely by registering as foreign
corporations and appointing agents for service of process under A.R.S. §§
10-1501 to -1510. Wal-Mart therefore is subject only to specific jurisdiction
1 The superior court did not hold an evidentiary hearing on Wal-
Mart’s motion to dismiss, and we therefore review the superior court’s
ruling de novo, “viewing the facts in the light most favorable to the
plaintiff[ ] but accepting as true the uncontradicted facts put forward by the
defendant[ ].” Planning Grp. of Scottsdale, L.L.C. v. Lake Mathews Mineral
Props., Ltd., 226 Ariz. 262, 264 n.1, ¶ 2 (2011). Neither the petition nor the
response include the exhibits from the motions filed in the superior court.
We therefore take judicial notice of the superior court record. See In re
Sabino R., 198 Ariz. 424, 425, ¶ 4 (App. 2000).
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Opinion of the Court
in Arizona, and actions against it in the Arizona courts must relate to its
activities in the state.
JURISDICTION
¶3 Special action jurisdiction is discretionary, “reserved for
‘extraordinary circumstances’ and is not available ‘where there is an equally
plain, speedy, and adequate remedy by appeal.’” Stapert v. Ariz. Bd. of
Psychologist Exam’rs, 210 Ariz. 177, 182, ¶ 21 (App. 2005) (citations omitted).
We accept jurisdiction when, as here, “the motion [to dismiss] reveals an
absence of jurisdiction, as an appeal inadequately remedies a trial court’s
improperly requiring a defense in a matter where it has no jurisdiction.”
Sigmund v. Rea, 226 Ariz. 373, 375, ¶ 5 (App. 2011) (citation and internal
quotation marks omitted).
DISCUSSION
¶4 States may exercise two forms of personal jurisdiction. First,
specific jurisdiction exists when the defendant establishes minimum
contacts with the forum state by purposefully directing its activities to that
state, and the litigation arises out of those activities. See Burger King Corp.
v. Rudzewicz, 471 U.S. 462, 472 (1985). Second, general jurisdiction allows a
forum state to hear any claim against the defendant, even when the facts
giving rise to it have no connection to the forum. Goodyear, 564 U.S. at 919.
General jurisdiction exists over a corporation in several circumstances. For
example, a corporation is subject to general jurisdiction in the state in which
it is incorporated, the state in which it has its principal place of business, id.
at 924, a state in which it has consented to general jurisdiction, see id. at 928,
a state in which its “affiliations with the State are so ‘continuous and
systematic’ as to render [it] essentially at home in the forum State,” id. at
919 (citation omitted), and in other states in “exceptional cases” where
circumstances make general jurisdiction appropriate, see Daimler, 134 S. Ct.
at 761 n.19.
¶5 Because this case arises entirely out of Wal-Mart’s activities in
Oregon, Arizona courts lack specific jurisdiction. The sole issue in this
special action is the extent to which Arizona may exercise general
jurisdiction over foreign corporations. Buss suggests two theories to
support general jurisdiction over Wal-Mart in Arizona: (1) by appointing
an agent for service of process, it has consented to general jurisdiction, and
(2) the sheer magnitude of Wal-Mart’s presence in Arizona relative to other
corporations means that Wal-Mart is “at home” here. We address each
argument in turn.
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Opinion of the Court
I. WAL-MART DID NOT CONSENT TO GENERAL JURISDICTION
IN ARIZONA.
¶6 The superior court concluded under Bohreer that Wal-Mart
impliedly consented to general jurisdiction in Arizona by registering and
appointing an agent to receive process here. Bohreer held that Arizona
courts may exercise general jurisdiction over a foreign insurer because the
insurance statutes provide “for an irrevocable appointment of the director
of insurance for service of process which remains in effect ‘as long as there
is in force in this state any contract made by the insurer or obligations
arising therefrom.’” 216 Ariz. at 211, ¶¶ 10–11 (quoting A.R.S. § 20-221(A)).
The Bohreer court interpreted § 20-221 as creating express (not implied)
consent to general personal jurisdiction.
¶7 Wal-Mart argues that Bohreer was impliedly overruled by the
United States Supreme Court’s recent opinions in Goodyear Dunlop Tires
Operations and Daimler AG. Those cases do not address general jurisdiction
by express consent, and we need not decide the continuing vitality of
Bohreer, because Wal-Mart is not registered under § 20-221.
¶8 No Arizona case has decided whether foreign corporations
consent to general jurisdiction by registering pursuant to A.R.S. §§ 10-1501
to -1510. Those statutes provide that foreign corporations authorized to
conduct business in Arizona are “subject to the same duties, restrictions,
penalties and liabilities now or later imposed on a domestic corporation of
like character.” A.R.S. § 10-1505(B). And foreign corporations must
maintain in Arizona a known place of business and a statutory agent for
service of process. A.R.S. § 10-1507.
¶9 We hold that these provisions do not create general personal
jurisdiction over foreign corporations, either by prescription or consent.
First, corporations do not expressly consent to general jurisdiction by
registering. The equal treatment of foreign and domestic corporations
prescribed by § 10-1505(B) refers to substantive liabilities and duties
without any mention of general jurisdiction. Had the Legislature intended
to endow Arizona courts with the ability to hear all cases (including those
in which Arizona has no interest) against all registered foreign
corporations, it would have said so. We think it is unlikely that the
Legislature intended to give Arizona courts the constitutionally dubious
authority to hear any case against any registered foreign corporation when
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Opinion of the Court
such cases need not involve any Arizonans.2 Buss argues that it would be
“manifestly unfair to Arizonans” to hold that we lack general jurisdiction
over Wal-Mart such that Arizona residents cannot sue for causes of action
that arise in other states. But, it is settled law that the specific-jurisdiction
analysis focuses exclusively on “the relationship among the defendant, the
forum, and the litigation,” Walden v. Fiore, 134 S. Ct. 1115, 1126 (2014)
(citation omitted), and the convenience to the plaintiff has no bearing on
whether a defendant’s due process rights are violated by subjecting it to
general jurisdiction.
¶10 Second, we conclude that the statutes do not create general
jurisdiction by implied consent. A corporation cannot fairly be deemed to
have consented to waive its due process rights when, as here, the statutes
give no notice that such a waiver is the price of registration.
¶11 We acknowledge that some recent decisions still hold that
consent to service of process is consent to general personal jurisdiction. See,
e.g., Senju Pharm. Co. v. Metrics, Inc., 96 F. Supp. 3d 428, 439–40 (D.N.J. 2015);
Otsuka Pharm. Co. v. Mylan Inc., 106 F. Supp. 3d 456, 467 (D.N.J. 2015). The
Senju and Otsuka courts reasoned that because the Supreme Court has not
expressly overruled its implied-consent jurisprudence, corporate
defendants consent to jurisdiction by consenting to service of process in the
forum state. Senju, 96 F. Supp. 3d at 436–40; Otsuka, 106 F. Supp. 3d at 467.
We are not persuaded by those decisions.
¶12 The concept of consent implied from registration statutes
originated in response to Pennoyer v. Neff, 95 U.S. 714 (1877), in which the
Supreme Court held that state courts’ jurisdiction was based on physical
presence in the forum. Implied consent allowed state courts to assert
jurisdiction over companies that at the time were considered “present” only
within their respective states of incorporation. See Brown v. Lockheed Martin
Corp., 814 F.3d 619, 631–32 (2d Cir. 2016) (citing Bank of Augusta v. Earle, 38
U.S. 519 (1839)). Thus, registration statutes “secure[d] local jurisdiction in
respect [to] business transacted within the State.” Robert Mitchell Furniture
2 Some states do assert general jurisdiction in this manner. For
example, under Pennsylvania law, it “shall constitute a sufficient basis of
jurisdiction to enable the tribunals of this Commonwealth to exercise
general personal jurisdiction” if a corporation “carr[ies] on [ ] a continuous
and systemic part of its general business within this Commonwealth.”
42 Pa.C.S.A. § 5301(a)(2)(iii). We need not opine on the constitutionality of
such a scheme to observe that it evinces a legislative purpose different from
that apparent from the text of Arizona’s statutes.
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Opinion of the Court
Co. v. Selden Breck Constr. Co., 257 U.S. 213, 215 (1921). The Supreme Court’s
personal “jurisdiction by consent” cases, such as Pennsylvania Fire Insurance
Co. of Philadelphia v. Gold Issue Mining & Milling Co., 243 U.S. 93 (1917), and
Louisville & N.R. Co. v. Chatters, 279 U.S. 320, 328 (1929), were decided before
International Shoe Co. v. State of Washington, Office of Unemployment
Compensation & Placement, 326 U.S. 310 (1945), which held that states could
exercise jurisdiction over a corporation that had “minimum contacts” with
the forum. This in turn led to the doctrine of specific jurisdiction, which
allowed states to assert jurisdiction over cases arising from business
activities conducted by foreign corporations in or affecting them while
preventing unfair assertion of jurisdiction against those who had not
voluntarily established contact with the forum. See, e.g., Burger King Corp.,
471 U.S. 462. Today, specific jurisdiction accomplishes the same goal as
jurisdiction by implied consent, but rather than focusing on a corporation’s
“presence” in a forum state, specific jurisdiction is based on the relationship
between the forum, the defendant, and the facts giving rise to the cause of
action. See Walden, 134 S. Ct. at 1126.
¶13 Because the modern doctrine of specific jurisdiction amply
ensures that a state has jurisdiction when a corporation’s conduct allegedly
causes harm in that state, there is no need to base personal jurisdiction
solely upon a murky implication of consent to suit — for all purposes and
in all cases — from the bare appointment of an agent for service. We
therefore agree with those decisions holding that registration statutes do
not imply consent to general jurisdiction. E.g., Brown, 814 F.3d at 630–41;
Display Works, LLC v. Bartley, 182 F. Supp. 3d 166, 175–79 (D.N.J. 2016); State
ex rel. Norfolk S. Ry. Co. v. Dolan, 512 S.W.3d 41, 51–52 (Mo. 2017). To be
sure, registration and appointment may form the basis for a finding that a
corporation has established minimum contacts with the forum state. But
minimum contacts are not enough to create jurisdiction over cases having
no substantive connection to the forum. As the Supreme Court observed in
Daimler, cases “decided in the era dominated by Pennoyer’s territorial
thinking . . . should not attract heavy reliance today.” 134 S. Ct. at 761 n.18.
II. WAL-MART IS NOT “AT HOME” IN ARIZONA.
¶14 A state has general jurisdiction over a foreign corporation
when the corporation’s “affiliations with the State are so ‘continuous and
systematic’ as to render [it] essentially at home in the forum State.”
Goodyear, 564 U.S. at 919. But general jurisdiction requires more than
continuous and systematic activity. Id. at 927–28; see also Daimler, 134 S. Ct.
at 761 n.19 (general jurisdiction outside the state of incorporation or forum
state may be permissible in an “exceptional case”). Wal-Mart argues that
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Opinion of the Court
after Daimler and Goodyear, foreign corporations are subject to general
jurisdiction only in their respective principal places of business and states
of incorporation. We need not endorse Wal-Mart’s broad reading of those
cases to conclude that they do not support the exercise of general
jurisdiction in Arizona on this record.
¶15 In Goodyear, the Supreme Court held that North Carolinians
could not sue Goodyear’s foreign subsidiaries in a United States court for a
tire design defect that allegedly caused an accident in France. 564 U.S. at
920–21, 929. The Court reasoned that placement of tires into the stream of
commerce, some of which may end up in the forum, is not enough to confer
general jurisdiction in that forum. Id. at 926–29.
¶16 In Daimler, Argentinian residents sued Daimler, a German
company, in federal court in California over its Argentinian subsidiary’s
alleged collaboration with Argentinian security forces in the perpetration
of human rights abuses in the 1970s and 1980s in Argentina. 134 S. Ct. at
750–51. The plaintiffs claimed that Daimler was subject to general
jurisdiction in California based on the contacts of its subsidiary, Mercedes.
Id. at 751. The Court reasoned that “[i]t was . . . error . . . to conclude that
Daimler, even with [Mercedes] contacts attributed to it, was at home in
California, and hence subject to suit there on claims by foreign plaintiffs
having nothing to do with anything that occurred or had its principal
impact in California.” Id. at 762.
¶17 Daimler did not categorically reject the possibility that a state
may exercise general jurisdiction over a corporation for other reasons:
We do not foreclose the possibility that in an exceptional case
[such as Perkins v. Benguet Consol. Mining Co., 342 U.S. 437
(1952)] a corporation’s operations in a forum other than its
formal place of incorporation or principal place of business
may be so substantial and of such a nature as to render the
corporation at home in that State.
....
[But] the general jurisdiction inquiry does not focus solely on
the magnitude of the defendant’s in-state contacts. . . . General
jurisdiction calls for an appraisal of a corporation’s activities in their
entirety, nationwide and worldwide. A corporation that operates
in many places can scarcely be deemed at home in all of them.
Otherwise, “at home” would be synonymous with “doing
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Opinion of the Court
business” tests framed before specific jurisdiction evolved in
the United States.
Id. at 761 n.19, 762 n.20 (internal quotation, modification, and citation
omitted) (emphasis added).
¶18 Federal circuit courts have interpreted Daimler to mean that
states other than a corporation’s state of incorporation and principal place
of business may exercise general jurisdiction over that corporation only in
exceptional cases. Brown, 814 F.3d at 627 (“[I]n our view Daimler established
that, except in a truly ‘exceptional’ case, a corporate defendant may be
treated as ‘essentially at home’ only where it is incorporated or maintains
its principal place of business — the ‘paradigm’ cases.”); Carmouche v.
Tamborlee Mgmt., Inc., 789 F.3d 1201, 1204 (11th Cir. 2015) (noting that
general jurisdiction is appropriate “only in ‘exceptional’ cases”); Kipp v. Ski
Enter. Corp. of Wis., 783 F.3d 695, 698 (7th Cir. 2015) (holding any state other
than the states of incorporation and principal place of business can assert
general jurisdiction only by adhering to the “stringent criteria” of Daimler
and Goodyear); Monkton Ins. Servs., Ltd. v. Ritter, 768 F.3d 429, 432 (5th Cir.
2014) (noting that it is “incredibly difficult to establish general jurisdiction
in a forum other than the place of incorporation or principal place of
business”); Martinez v. Aero Caribbean, 764 F.3d 1062, 1070 (9th Cir. 2014)
(“Only in an ‘exceptional case’ will general jurisdiction be available
anywhere else.”); In re Roman Catholic Diocese of Albany, New York, Inc., 745
F.3d 30, 39 (2d Cir. 2014) (“Daimler AG, however, reaffirmed that, under
Goodyear, general jurisdiction might, ‘in an exceptional case,’ extend beyond
a corporation’s state of incorporation and principal place of business . . . .”).
¶19 The Supreme Court has acknowledged only one exceptional
case that would give rise to general jurisdiction over a foreign corporation.
Daimler, 134 S. Ct. 746 at 761 n.19, 762 n.20 (citing Perkins, 342 U.S. 437). In
Perkins, the Supreme Court held that general jurisdiction was proper in
Ohio when the defendant company’s mining operation in the Philippines
was shut down by the Japanese occupation, and the general manager, who
was also the principal stockholder, relocated to and ran the company’s
“necessarily limited wartime activities” in Ohio. 342 U.S. at 447–48.
¶20 Buss argues that Wal-Mart is subject to general jurisdiction
based on its exceptionally substantial business activities in Arizona. As of
January 2017, in Arizona Wal-Mart operates 127 retail locations and 4
distribution centers, employs 33,910 people, spent $1.5 billion with
suppliers, collected $270.3 million in state sales taxes, and paid $91.5 million
in state taxes. Wal-Mart was the largest employer in Arizona in 2014 and
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Opinion of the Court
the second-largest in 2015. In 2015, it employed more Arizonans than the
next two largest employers combined. But while Wal-Mart has a large
economic presence in the state, there is nothing “exceptional” about its
activities to give rise to general jurisdiction.
¶21 Were we to hold that Arizona, a state that is home to just
under 34,000 of Wal-Mart’s estimated 2.3 million global employees (1.5
million of whom are employed in the United States) has general jurisdiction
over Wal-Mart, we would effectively confer general jurisdiction over every
foreign corporation with a large commercial presence in Arizona. Such a
rule would be neither fair, rational nor consistent with the reasoning of
Daimler and Goodyear. Neither the facts of this case nor the nature of Wal-
Mart’s activities in Arizona give rise to the “exceptional case” envisioned
by the Supreme Court — exigent circumstances that render traditional
jurisdictional limits unworkable.
¶22 Moreover, a size-based approach would be both standardless
and malleable. There is no constitutional doctrine establishing a threshold
level of commercial activity sufficient to create general jurisdiction. And if
mere size were sufficient, the fluctuating levels of each foreign
corporation’s economic activity would have to be relitigated in every case
before jurisdiction could be determined. We view such an approach as
constitutionally untenable.
¶23 Buss argues that Wal-Mart’s presence here is more like Perkins
by arguing it is a party to many suits in Arizona and is thus not prejudiced
by having to defend this action in Arizona, and she notes that the former
chairman of Wal-Mart’s board of directors resides in Arizona. We disagree.
First, Wal-Mart’s contacts with the state are easily sufficient to subject it to
specific jurisdiction in cases involving its activities in, or directed to,
Arizona. The fact that such cases arise does not create jurisdiction over
cases that have no connection to this state — as the Supreme Court noted,
“[a] corporation that operates in many places can scarcely be deemed at
home in all of them.” Daimler, 134 S. Ct. at 762 n.20.
¶24 Buss finally attempts to distinguish the defendants in Daimler
and Goodyear from Wal-Mart by arguing that the Supreme Court
distinguished between foreign corporations (i.e., corporations incorporated
in other states) and alien corporations (i.e., corporations incorporated in
other countries). She relies on the undecided assumptions in Daimler and
Goodyear that the domestic entities were subject to general jurisdiction in
the forums. Daimler, 134 S. Ct. at 758; Goodyear, 564 U.S. at 918. But due
process applies to all defendants, and personal jurisdiction jurisprudence
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Opinion of the Court
makes no such distinction. See Helicopteros Nacionales de Colombia, S.A. v.
Hall, 466 U.S. 408 (1984) (applying the Due Process Clause’s minimum-
contacts analysis to a Colombian corporation sued in Texas); cf. Mathews v.
Diaz, 426 U.S. 67, 77 (1976) (noting that the Fifth and Fourteenth
Amendments protect aliens from “deprivation of life, liberty, or property
without due process of law”).
¶25 In sum, subjecting Wal-Mart to general jurisdiction in
Arizona based on the level of its commercial activity would wrongly
conflate general jurisdiction with specific jurisdiction and provide an
unworkable standard that would require extensive factual findings in every
case. Even without general jurisdiction in Arizona, Buss has a forum
readily available to seek redress for her injuries — Oregon.
CONCLUSION
¶26 For the foregoing reasons, we accept jurisdiction and grant
relief. We direct the superior court to dismiss the action without prejudice
for lack of personal jurisdiction.
AMY M. WOOD • Clerk of the Court
FILED: AA
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