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Business litigation case requires a jurisdictional evaluation

Jurisdiction is a difficult concept to grasp in many business litigation matters. The court where a lawsuit is filed must have the power to hear the business litigation case, or the court will dismiss the matter for lack of jurisdiction. The defendant company may appeal the grant of jurisdiction by the court and bring the issue into play in that matter. Issue of jurisdiction may arise in Oregon state and federal courts as well in the courts in all other states.

Many times, a court may have subject matter jurisdiction over a case, meaning that it has the authority to hear that type of subject matter in dispute. However, despite that authority, the same court may lack personal jurisdiction over the parties, and thus be disqualified to preside over the case. The ultimate authority that declares the law of jurisdiction in business litigation is the U.S. Supreme Court.

In recent years, the Supreme Court has refined the meaning of personal jurisdiction over defendant companies.  Basically, a lawsuit may be brought where the defendant company is incorporated or where it has its principal place of business. Sometimes, a plaintiff company may have difficulty determining where that principal place of business is located.

Generally, the Supreme Court has made it clear in recent decisions that the defendant must have conducted activities in the state that can be related to the claims made by the plaintiff in the lawsuit. If the defendant company has not engaged in that kind of activity in the chosen state, then the connection between the forum state and the specific claims at issue is missing. Hence, there would be no jurisdiction. Of course, since these are federal principles, they would apply in Oregon state and federal courts as well as in all other states. A company getting involved in a business litigation case will do best to carefully evaluate the jurisdiction issue before deciding the forum in which to initiate the filing.

Source: utahbusiness.com, "The evolving landscape of personal jurisdiction", Elisabeth M. McOmber, Sept. 6, 2017

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