Facts
- Susquehanna Coal Co. was a Pennsylvania corporation with its principal office in Pennsylvania.
- The company maintained a branch sales office in New York City staffed by a supervising sales agent, several salesmen, and clerical employees.
- From the New York office, the company systematically and continuously solicited orders from New York customers; orders were sent to Pennsylvania for confirmation.
- Coal was regularly shipped from Pennsylvania to New York customers as a result of these orders; payments were handled in Pennsylvania.
- George Tauza, a New York resident, sued Susquehanna in New York on a claim unrelated to the company’s New York transactions.
- Process was served in New York on the supervising sales agent at the New York office.
- Susquehanna moved to set aside service, arguing it was not “doing business” in New York and that the agent was not a proper person for service.
Issues
- Whether a foreign corporation that maintains a staffed in-state office and continuously solicits orders resulting in regular shipments into the state is “doing business” in New York so as to be subject to personal jurisdiction on an unrelated cause of action.
- Whether service of process on the supervising in-state sales agent was valid as service on a “managing agent,” and whether sufficient diligence was shown in attempting service on an officer first.
- Whether New York’s statutes authorizing jurisdiction and service over foreign corporations were unconstitutional as applied to a corporation conducting such in-state business, where the claim arose outside New York and no in-state agent was formally designated.
Decision
- The Court of Appeals affirmed the order refusing to set aside service.
- Susquehanna’s New York operations were sufficiently continuous and systematic to constitute “doing business” and corporate presence in New York.
- Once the corporation was present through business activity, it could be sued in New York even on a claim unrelated to its New York transactions.
- The supervising sales agent in charge of the New York office qualified as a “managing agent,” and service on him was valid.
- The statutory scheme authorizing jurisdiction and service in these circumstances did not violate due process.
Legal Principles
- There is no single mechanical test for “doing business” for jurisdiction; the question is whether the corporation’s in-state activities are sufficient to treat it as present and therefore amenable to service.
- Maintaining an in-state office with personnel that regularly solicits and secures orders leading to continuous shipments into the state can establish corporate presence for personal jurisdiction.
- For a corporation present in the forum through such business activity, jurisdiction is not limited to claims arising from the forum transactions.
- An in-state supervisor directing the corporation’s local office operations and personnel may be a “managing agent” upon whom service can be made.
- Exercising jurisdiction over a foreign corporation engaged in continuous in-state business, and permitting service on an appropriate in-state agent, is consistent with due process even absent a formal designation of an agent.
Conclusion
New York could exercise personal jurisdiction over a foreign corporation that maintained a staffed office and continuously solicited business resulting in regular in-state shipments, and service on the supervisor of that office was valid; the suit could proceed despite the claim being unrelated to the corporation’s New York transactions.