Wal-Mart Stores, Inc. v. LeMaire (5/11/2017)

July 10, 2017

Arizona Court of Appeals Division One holds that registered foreign corporations in Arizona are not automatically subject to general personal jurisdiction in Arizona courts, and that the commercial activity of a foreign corporation within the state does not create general personal jurisdiction over that corporation.

A customer slipped and fell at a store in Oregon.  The store was incorporated in Delaware with its principle place of business in Arkansas.  The customer brought a suit in Arizona Superior Court.  The store moved to dismiss for lack of jurisdiction, which the superior court denied, and the store filed a petition for special action.

The court of appeals noted that Arizona may exercise two forms of personal jurisdiction:  (1) specific jurisdiction, which arises from a defendant’s contacts with the state; and (2) general jurisdiction, which arises from a defendant’s continuous and systematic affiliations with the state.  As an example, the court noted that a state has general jurisdiction over a corporation that is incorporated or has its principal place of business in that state.

The court noted that Arizona courts lacked specific jurisdiction over the store because this case arose entirely out of activities that occurred in Oregon.  It then held that a company does not subject itself to Arizona’s general jurisdiction by registering as a foreign corporation, and that the size or amount of a foreign corporation’s dealings in Arizona cannot confer general jurisdiction in Arizona.  Following recent federal case law, the Court explained that, absent exceptional circumstances—and the sheer size of business dealings do not create an exceptional circumstance—a corporation is only subject to general jurisdiction in its state of incorporation and its principal place of business.

Presiding Judge Swann delivered the opinion of the court, in which Judges Cattani and Kessler joined.