To exercise valid jurisdiction over any claim, a federal court must have both personal jurisdiction and subject matter jurisdiction. Subject matter jurisdiction can be based on diversity of citizenship, the presence of a federal question, or an issue that involves subject matter that only the federal court can decide. Separate and distinct from subject matter jurisdiction is the court’s inquiry into personal jurisdiction.

Personal jurisdiction comes in its own flavors: general, specific, or consent to personal jurisdiction (which some courts regard as another form of general jurisdiction). It is axiomatic that general jurisdiction over a corporation exists in the place of incorporation and in the state of the principal place of business. Goodyear Dunlop Tires Operations, S.A. v. Brown, 131 S. Ct. 2847, 2853-54 (2011); Daimler AG v. Bauman, 134 S. Ct. 746, 757 (2014). In some states, general jurisdiction also exists if a corporation registers to do business in the state and the registration statute confers general jurisdiction by consent. Mallory v. Norfolk S. Ry. Co., 143 S. Ct. 2028, 216 L. Ed. 2d 815 (2023).

However, the Supreme Court has not yet specifically confirmed whether the same test for determining general jurisdiction over a corporation applies to unincorporated associations, such as limited liability companies. Since our last post on this topic, several jurisdictions have grappled with the proper way to determine whether personal jurisdiction exists over limited liability companies, and this blog delivers the latest update on the state of jurisdictional analysis with respect to LLCs.

Without specifically discussing the issue of how to determine personal jurisdiction over an LLC, the Supreme Court in Goodyear Dunlop Tires Operations, S.A. v. Brown, 131 S. Ct. 2847, 2853-54 (2011) and Daimler AG v. Bauman, 134 S. Ct. 746, 757 (2014), provided useful analysis.  Specifically, in Daimler, the Court refused to exercise general jurisdiction over the defendant corporation based on the contacts of its subsidiary LLC.  The Court explained that even when the subsidiary LLC was “at home” in the jurisdiction and that such contacts could be imputed onto the defendant corporation, general jurisdiction could not be established. The Court reiterated that the “paradigm all-purpose forums for general jurisdiction are a corporation’s place of incorporation and principal place of business.” The problem is, of course, that a limited liability company does not have a “place of incorporation”; rather, as an unincorporated entity, it has a place of organization, at best.  Further, in some cases, plaintiffs have argued that the citizenship of each member should apply when determining personal jurisdiction – while this is part of the test for subject matter jurisdiction through diversity of citizenship, personal jurisdiction requires a different analysis.

 As a result, since Goodyear and Daimler, district courts have varied in their approach to the analysis, causing inconsistency on how an LLC can expect personal jurisdiction to be established. Several district courts, including those in New Jersey, New York, Illinois, and Pennsylvania have followed the framework provided in Goodyear and Daimler, establishing basic general personal jurisdiction over an LLC by the place of organization and the principal place of business. See Gentles v. Blue Horizon Innovations, 2023 WL 6294881, at *3 (D.N.J. Sep. 27, 2023); Hannah v. Johnson & Johnson, Inc., 2020 WL 3497010, at *16 (D.N.J. June 29, 2020)(“Whereas a limited liability company’s citizenship for the purposes of determining diversity jurisdiction is ascertained by tracing the citizenship of its members, for the purposes of general personal jurisdiction, a limited liability company’s citizenship is that of its principal place of business and state of incorporation.” (internal citations omitted); Gordet v. Chryslergroup LLC, No. 15-cv-1470, 2015 WL 6407959, at *3 (D.N.J. Oct. 21, 2015)(but see fn. 7, “Plaintiff does not allege that any of the members of Defendant reside in New Jersey. Moreover, if a member of Defendant resided in New Jersey, this Court would gain general personal jurisdiction, but lose subject matter jurisdiction based on a lack of diversity”); Mirza v. Dolce Vida Medical Spa, LLC, 2024 WL 307969, at * 4 (S.D.N.Y. Jan. 26, 2024)(in case arising out of conduct not related to the company’s jurisdictional contacts, the Court accepted that the LLC’s principal place of business and place of organization would have been sufficient to support jurisdiction); Jean-Louis v. Carrington Mortgage Services, 2020 WL 1042644, at * 3 (E.D.N.Y. Mar. 4, 2020)( the Court accepted that the LLC’s principal place of business and place of organization were sufficient to support jurisdiction in case arising out of conduct not related to the company’s jurisdictional contacts); Tagliere v. Horseshoe Hammond, LLC, 2023 WL 3886135 (N.D. Ill. Jun. 8, 2023)(implying that an LLC’s principal place of business and state of organization would have formed basis for general personal jurisdiction); Finn v. Great Plains Lending LLC, 2016 WL 705242 at *3, fn. 3. (E.D. Pa. Feb. 23, 2016). 

In contrast, the Eastern District of Missouri took a different approach. In Human v. Frubbe, the Court reviewed the LLC’s state of organization, the state of the principal place of business, and the place of citizenship of the LLC’s members in determining whether the company was subject to general personal jurisdiction in the forum. Human v. Frubbel, LLC, 2024 WL 2048865, at *2 (E.D. Mo. May 7, 2024); see also Carney v. Guerbet, LLC, No. 4:18-CV-1494 CAS, 2018 WL 6524003, at *3 (E.D. Mo. Dec. 12, 2018).  Of course, this analysis becomes infinitely more complicated for those LLCs whose members are also LLCs requiring perhaps layers of consideration of members and sub members’ citizenship.

The District Court for South Carolina has ruled that general personal jurisdiction over an LLC exists in the same three circumstances as is does for corporate defendants: 1) in the forum where the defendant is incorporated or organized; 2) in the forum where the defendant has its principal place of business; and 3) in a forum where a company’s affiliations with the forum are so continuous and systematic as to render it essentially at home in the forum state.  FL Spring Hill Cortez LLC v. BC Waycross Spring Hill LLC, 651 F.Supp.3d 801, 807-08 (D.S.C. 2023).  In determining whether an LLC’s contacts were so continuous or systematic to be “at home” in a state, the court referenced an affidavit submitted by the defendant LLC that affirmed the LLC’s members were not citizens of the forum state. Since citizenship was only one of many factors referenced in the analysis, it will take further case law to determine exactly how much weight South Carolina courts will give to the citizenship of LLC members when determining general personal jurisdiction.  FL Spring Hill Cortez LLC v. BC Waycross Spring Hill LLC, 651 F.Supp.3d 801, 807-08 (D.S.C. 2023). These jurisdictions have historically been some of the most dangerous for corporate defendants and it is clear that inconsistency remains in the application of general personal jurisdiction as it pertains to LLCs, and whether citizenship of LLC members should play a role in that analysis.  As such, it may be difficult for an LLC to anticipate where personal jurisdiction may be exercised, regardless of the guidance provided by Goodyear and Daimler.  As such, LLCs should be cautious and conduct a case-by-case analysis when determining whether an objection to personal jurisdiction will be successful.