Richards Layton & Finger

Delaware Supreme Court Clarifies Grounds for Jurisdiction

June 2016

In Genuine Parts Company v. Cepec, the Delaware Supreme Court held that the provisions of Delaware’s General Corporation Law (DGCL) requiring foreign corporations to register to qualify to do business in the State of Delaware and to appoint an agent for service of process do not, of themselves, operate to subject the foreign corporation to general jurisdiction in Delaware. The Court in Genuine Parts thus overturned its decades-old opinion in Sternberg v. O’Neil  to the extent it held that the registration statutes would result in a foreign corporation, merely by qualifying to do business in Delaware, consenting to general jurisdiction in Delaware. Noting that reliance on Sternberg for that proposition was not “tenable” after the U.S. Supreme Court’s opinion in Daimler AG v. Bauman, the Delaware Supreme Court in Genuine Parts set out to adopt a rule that recognizes the nature of modern commerce and avoids unduly burdening corporations with national and international operations.