Global Coverage, Global Jurisdiction? Analyzing Efforts to Expand Personal Jurisdiction Over Insurers

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Across the United States, courts disagree about where an insurance company may be subject to personal jurisdiction. For instance, is a territory-of-coverage provision relevant to personal jurisdiction? What about registering to do business? This post analyzes these issues and offers a practical guide to avoiding litigation in far-flung locales.

Introduction

Imagine this scenario: An insurance company issues a policy to a business in another State. The policy covers damages incurred “worldwide.” One of the insured’s employees drives a company car into a third State and causes an accident, leading to a personal-injury lawsuit. But the insurer concludes it has no duty to defend or indemnify. So the insured sues for breach of contract and bad faith. Where is the insurer subject to personal jurisdiction for the coverage lawsuit?

Like most legal issues, it depends. Appellate courts are split over this important question, and a recent U.S. Supreme Court opinion further complicates things. According to some, a global coverage provision is not consent to global jurisdiction. Yet other courts seem to reach the opposite conclusion. And according to the Supreme Court, merely registering to do business in a State may be enough to confer jurisdiction.

This post analyzes these issues and suggests how insurers can avoid having their policies (or compliance with state statutes) construed as consent to litigate in far-flung jurisdictions.

The Framework for Personal Jurisdiction

To better understand the issues facing insurers in particular, it is worth recapping the framework for obtaining personal jurisdiction over any company. A company may, of course, consent to personal jurisdiction. But absent consent, a state statute must confer jurisdiction, and that jurisdiction must be consistent with the Due Process Clause of the Fourteenth Amendment. The due-process inquiry, in turn, typically asks whether the court can exercise general (or “all-purpose”) jurisdiction or specific (“case-linked”) jurisdiction.

When a court has general jurisdiction over a defendant, it “may hear any claim against that defendant, even if all the incidents underlying the claim occurred in a different State.”[1] But to be subject to that jurisdiction, a non-consenting company’s forum contacts must be “so ‘continuous and systematic’ as to render [it] essentially at home in the forum.”[2] Only a limited set of contacts can pass that rigorous test. Typically, a company is “at home” in just two places: where it is incorporated and where it maintains its principal place of business.[3]

Specific jurisdiction is different and requires a three-part inquiry. First, the defendant must have “purposefully avail[ed] itself of the privilege of conducting activities within the forum State.”[4] Second, the plaintiff’s claims “‘must arise out of or relate to the defendant’s contacts’ with the forum.”[5] Third, the exercise of jurisdiction must be “reasonable” and “not offend traditional notions of fair play and substantial justice.”[6]

In applying this three-step inquiry for specific jurisdiction, five tenets are important:

1. Specific jurisdiction requires a connection between the forum “and the specific claims at issue.”[7] Without a claim-related link to the forum, “jurisdiction is lacking regardless of the extent of a defendant’s unconnected activities.”[8]
2. The defendant’s relationship with the forum must arise out of or relate to “contacts that the ‘defendant [itself]’ creates with” that State.[9] Put differently, it is “the defendant’s conduct”—not a plaintiff’s or a third party’s behavior—“that must form the necessary connection with the forum.”[10] This shields defendants from being hauled into court based on the “unilateral activity of another party or a third person.”[11]
3. When a court analyzes whether the defendant has a jurisdictional “contact” with the forum, the court “looks to the defendant’s contacts with the forum State itself, not the defendant’s contacts with persons who reside there.”[12]
4. The mere foreseeability of possible harm in the forum is an insufficient basis for specific jurisdiction.[13] S. Supreme Court “precedents make clear that it is the defendant’s actions, not [its] expectations, that empower a State’s courts to subject [the defendant] to judgment.”[14] This is true even when a business obtains a financial benefit from selling a product that can be used in the forum.[15]
5. The defendant’s suit-related conduct must create a “substantial connection” to the forum.[16] This relates to the rule that “‘random, fortuitous, or attenuated’ contacts” are insufficient.[17]

With this framework in mind, consider some of the issues that insurers face.

The Effect of Territory-of-Coverage Provisions

Courts do not always agree about how to apply the specific-jurisdiction framework in insurance cases.[18] One dispute is about territory-of-coverage provisions. If a policy extends coverage nationwide (or worldwide), is that a “contact” supporting personal jurisdiction?

Some courts say yes. This includes decisions from the Fourth, Sixth, Eighth, Ninth, and Eleventh Circuits, as well as state appellate courts in Connecticut, Illinois, and Missouri.[19] The Fourth Circuit’s decision in Rossman v. State Farm Mutual Automobile Insurance Co. is a classic example.[20] There, an Indiana-based insurer issued an automobile insurance policy in Illinois, and one of the insureds caused an accident in Virginia.[21] This led to a lawsuit against the insurer in Virginia.[22] The Fourth Circuit held the insurer was subject to personal jurisdiction there because it “could foresee being haled into court.”[23] The insurer “specifically promised to defend its policyholders” in any State and, presumably, collected “higher premiums” for that “broad coverage.”[24] If the insurer “wished to avoid suit in Virginia or any other forum, it could have excluded that state from the ‘policy territory.’”[25] Without that exclusion, the appellate court found jurisdiction.

But other courts disagree, holding that a territory-of-coverage clause is an inadequate jurisdictional contact. This includes the Second, Fifth, and Seventh Circuits, plus state appellate courts in Arizona, Florida, Montana, New York, and Pennsylvania.[26] The Seventh Circuit’s opinion in Lexington Insurance Co. v. Hotai Insurance Co.—written by then-Judge Amy Coney Barrett—is a good example.[27] There, a Taiwanese insurer issued a liability insurance policy with a “worldwide” coverage provision.[28] The insurer denied a claim brought by an additional insured in Wisconsin, leading to a lawsuit against the insurer in Wisconsin. The trial court and the Seventh Circuit both held the Taiwanese insurer was not subject to personal jurisdiction. As the appellate court wrote, “the presence of a state within the scope of coverage creates no purposeful connection between the insurer[] and that state.”[29]

The Seventh Circuit has a better argument than the Fourth Circuit. As noted above, the specific-jurisdiction analysis asks whether a defendant “purposefully avail[s] itself of the privilege of conducting activities within the forum State.”[30] But when an insurer issues a policy with a nationwide (or global) coverage provision, it does not simultaneously do business in all fifty States (or in every nation). To borrow a colorful example from then-Judge Barrett:

If a parent bets her fifth grader fifty dollars that it will rain in every single state during the month of June, she hasn’t “done business” in all fifty states even though her profit will increase or decrease based on what happens in each—and even though her risk and potential profit would have been less if she had limited the territory to twenty-five states.[31]

When an insurance company issues a policy, the insured is in a definable location. For one reason or another, the insured may later find itself in another State, but that change in location stems from the insured’s “unilateral act.”[32] The potential foreseeability of the insured’s unilateral movement should be irrelevant.[33] And even if the insured’s contact were jurisdictionally relevant, the contact is so paper-thin that it should be unreasonable to rely on it.[34]

This logic should apply even when the insured claims the insurer has a duty to defend, not just a duty to indemnify. Some courts have tried to distinguish duty-to-defend cases from duty-to-indemnify cases, suggesting that an insurer who agrees to pay defense costs submits to the jurisdiction of the State where the defense is provided. Not so. The duty to defend merely requires the insurer to pay legal bills on behalf of its insured. The retained defense lawyers are not always located in the forum State, and even when they are, a promise to reimburse the lawyers does not drag the insurance company itself into the forum State. More fundamentally, as courts have recognized, there is “a qualitative distinction” between (1) “contracting to cover an insured” under a nationwide coverage clause and (2) “being amenable to being haled into court anywhere in the United States.”[35] “The former issue is one of coverage; the latter is one of jurisdiction.”[36]

The Effect of Consent-by-Registration Statutes

Apart from whether a territory-of-coverage provision is enough to confer personal jurisdiction, insurers also face arguments about so-called “consent-by-registration” laws.

In 2023, the U.S. Supreme Court confronted whether registering to do business in a State can be valid consent to general jurisdiction in that State. That case—Mallory v. Norfolk Southern Railway Co.[37]—involved a Pennsylvania statute declaring that if an out-of-State corporation qualifies to do business in the Commonwealth, then that qualification “shall constitute a sufficient basis … to exercise general personal jurisdiction.”[38] Although that particular statute is unique to Pennsylvania, courts in other jurisdictions have similarly held that registering to do business is consent to general jurisdiction, thus mirroring the effect of the Pennsylvania law.[39]

In a 5–4 decision in Mallory, the Supreme Court upheld Pennsylvania’s law. The narrow majority opinion held that a 1917 ruling in Pennsylvania Fire Insurance Co. of Philadelphia v. Gold Issue Mining & Milling Co.[40] foreclosed the argument that consent-by-registration statutes violate due process.[41] A four-Justice plurality went on to reject arguments that consent-by-registration statutes conflict with more recent caselaw.[42]

Under the logic in Mallory and Pennsylvania Fire, it would not violate the Due Process Clause to subject an insurer to general jurisdiction in every State. What’s more, insurers are often registered to do business in every (or nearly every) State. So insurers will no doubt face even more arguments that they are subject to jurisdiction everywhere.

There are, however, at least three barriers between insurers and the unbounded personal jurisdiction that Mallory could be read to allow.

First, in over a dozen States, legislatures have made clear that registering to do business is not consent to personal jurisdiction.[43] Those statutes do not conflict with Mallory’s reasoning. Mallory does not say that registering to do business is inherently consent to jurisdiction; it simply held that if a State chooses to enact a consent-by-registration statute, that statute does not violate due process.

Second, when corporate-registration statutes are silent on jurisdiction (and most are), many courts have interpreted the law narrowly to avoid jurisdictional implications. To be sure, some of those decisions relied in part on due-process concerns that Mallory now weakens.[44] Courts may revisit that line of reasoning after Mallory. But courts also relied on basic principles of statutory interpretation, not due process, to reject the consent-by-registration fiction.[45] Mallory does not change the meaning of any state statute, and courts have not been too quick to use Mallory to rewrite or re-interpret existing laws.[46]

Third, insurers may challenge consent-by-registration statutes as violating the Commerce Clause of the U.S. Constitution. Justice Samuel Alito flagged this argument when he cast the deciding vote in Mallory.[47] In his view, “there is a good prospect that Pennsylvania’s assertion of jurisdiction … over an out-of-state company in a suit brought by an out-of-state plaintiff on claims wholly unrelated to Pennsylvania … violate[d] the Commerce Clause.”[48] The four dissenters in Mallory could agree with Justice Alito on this point,[49] but that is uncertain.[50] What is certain is that courts will have to resolve Commerce Clause arguments soon.

Conclusion

Disputes over personal jurisdiction are usually complex and always critical. When an insurance company faces a lawsuit in a forum that seems unconnected to the underlying insurance contract, defense counsel should consider moving to dismiss for lack of personal jurisdiction. This may include making arguments under the Commerce Clause or relying on the opinions that rightly distinguish between coverage territory and personal jurisdiction. But one must make these arguments quickly: When a defendant does not challenge personal jurisdiction early in the litigation, it usually waives the issue.[51]

Finally, insurers may be able to avoid personal-jurisdiction disputes altogether by including a choice-of-forum clause in the insurance policy. State laws may try to limit that kind of provision,[52] but forum-selection clauses are generally enforceable as a matter of federal law.[53]

In these ways, insurers can promote predictability and avoid gamesmanship.

_{[1]      Bristol-Myers Squibb Co. v. Super. Ct., 582 U.S. 255, 262 (2017).}

_{[2]      Daimler AG v. Bauman, 571 U.S. 117, 127 (2014) (quoting Goodyear Dunlop Tires Operations, S.A. v. Brown, 564 U.S. 915, 919 (2011)).}

_{[3]      See, e.g., BNSF Ry. v. Tyrrell, 581 U.S. 402, 413 (2017).}

_{[4]      Ford Motor Co. v. Mont. Eighth Jud. Dist. Ct., 592 U.S. 351, 359 (2021) (quoting Hanson v. Denckla, 357 U.S. 235, 253 (1958)).}

_{[5]      Id. (quoting Bristol-Myers, 582 U.S. at 262).}

_{[6]      Id. at 358 (quoting Int’l Shoe Co. v. Washington, 326 U.S. 310, 316–17 (1945)).}

_{[7]      Bristol-Myers, 582 U.S. at 264; accord Walden v. Fiore, 571 U.S. 277, 284 (2014) (looking for “suit-related conduct”).}

_{[8]      Bristol-Myers, 582 U.S. at 264; accord Goodyear, 564 U.S. at 930 n.6.}

_{[9]      Walden, 571 U.S. at 284 (quoting Burger King Corp. v. Rudzewicz, 471 U.S. 462, 475 (1985)).}

_{[10]     Walden, 571 U.S. at 285.}

_{[11]     Helicopteros Nacionales de Colombia, S.A. v. Hall, 466 U.S. 408, 417 (1984).}

_{[12]     Walden, 571 U.S. at 285 (emphasis added).}

_{[13]     See, e.g., Walden, 571 U.S. at 289; World-Wide Volkswagen Corp. v. Woodson, 444 U.S. 286, 295 (1980).}

_{[14]     J. McIntyre Mach., Ltd. v. Nicastro, 564 U.S. 873, 883 (2011) (plurality opinion).}

_{[15]     See World-Wide Volkswagen, 444 U.S. at 299.}

_{[16]     Walden, 571 U.S. at 284 (emphasis added)}

_{[17]     Id. at 286 (quoting Burger King, 471 U.S. at 475).}

_{[18]     Some cases, of course, are easy. See, e.g., McGee v. Int’l Life Ins., 355 U.S. 220, 223 (1957) (holding an insurer was subject to jurisdiction in California: “The contract was delivered in California, the premiums were mailed from there and the insured was a resident of that State when he died.”).}

_{[19]     See, e.g., Rossman v. State Farm Mut. Auto. Ins., 832 F.2d 282, 286–87 (4th Cir. 1987); Payne v. Motorists’ Mut. Ins., 4 F.3d 452, 456 (6th Cir. 1993); Ferrell v. W. Bend Mut. Ins., 393 F.3d 786, 791 (8th Cir. 2005); Farmers Ins. v. Portage La Prairie Mut. Ins., 907 F.2d 911, 913–14 (9th Cir. 1990); McGow v. McCurry, 412 F.3d 1207, 1215 (11th Cir. 2005), abrogated on other grounds by Diamond Crystal Brands, Inc. v. Food Movers Int’l, Inc., 593 F.3d 1249 (11th Cir. 2010); Samelko v. Kingstone Ins., 184 A.3d 741, 753 (Conn. 2018); Pace Commc’ns Servs. Corp. v. Express Prods., Inc., 945 N.E.2d 1217, 1226 (Ill. App. Ct. 2011); State ex rel. Key Ins. v. Roldan, 587 S.W.3d 638, 643 (Mo. 2019); cf. Eli Lilly & Co. v. Home Ins., 794 F.2d 710, 720–21 (D.C. Cir. 1986) (holding that because the insured distributed products nationwide, its insurer was subject to personal jurisdiction nationwide). But see King v. Am. Fam. Mut. Ins., 632 F.3d 570, 580 n.10 (9th Cir. 2011) (distinguishing Farmers Ins., 907 F.2d 911).}

_{[20]     832 F.2d 282 (4th Cir. 1987).}

_{[21]     See id. at 284–85.}

_{[22]     See id. at 285.}

_{[23]     Id. at 286.}

_{[24]     Id. at 286–87.}

_{[25]     Id. at 287.}

_{[26]     See, e.g., Dix v. Peters, 374 F. Supp. 3d 213, 226 (N.D.N.Y. 2019), aff’d, 802 F. App’x 25 (2d Cir. 2020); Shambaugh & Son, L.P. v. Steadfast Ins., 91 F.4th 364, 374 (5th Cir. 2024); Lexington Ins. v. Hotai Ins., 938 F.3d 874, 884 (7th Cir. 2019); Batton v. Tenn. Farmers Mut. Ins., 736 P.2d 2, 6 (Ariz. 1987); Erie Ins. v. LaRose, 202 So. 3d 148, 155 (Fla. Dist. Ct. App. 2016) (citing Meyer v. Auto Club Ins., 492 So. 2d 1314 (Fla. 1986)); Carter v. Miss. Farm Bureau Cas. Ins., 109 P.3d 735, 740 (Mont. 2005); Repwest Ins. v. Country-Wide Ins., 85 N.Y.S.3d 24, 28 (App. Div. 2018); United Farm Bureau Mut. Ins. v. U.S. Fid. & Guar., 462 A.2d 1300, 1307 (Pa. 1983); see also Ex parte Ga. Farm Bureau Mut. Auto. Ins., 889 So. 2d 545, 552 (Ala. 2004) (finding no jurisdiction in an automobile insurance case).}

_{[27]     938 F.3d 874 (7th Cir. 2019).}

_{[28]     Id. at 877.}

_{[29]     Id. at 882 (emphasis omitted).}

_{[30]     Id. at 881 (emphasis omitted) (quoting Goodyear, 564 U.S. at 924).}

_{[31]     Id.}

_{[32]     Ex parte Georgia Farm Bureau, 889 So. 2d at 552; accord Erie Ins., 202 So. 3d at 155.}

_{[33]     See World-Wide Volkswagen, 444 U.S. at 298–99.}

_{[34]     See OMI Holdings, Inc. v. Royal Ins. Co. of Can., 149 F.3d 1086, 1095–97 (10th Cir. 1998); TH Agric. & Nutrition v. ACE European Grp., 488 F.3d 1282, 1292 (10th Cir. 2007).}

_{[35]     Repwest Ins., 85 N.Y.S.3d at 28; see also United Farm Bureau Mut. Ins., 462 A.2d at 1307.}

_{[36]     Unser v. Prepared Ins., No. 15-1085, 2017 WL 1347701, at *3 (W. Va. Apr. 7, 2017).}

_{[37]     600 U.S. 122 (2023).}

_{[38]     42 Pa. Cons. Stat. § 5301(a).}

_{[39]     See, e.g., Cooper Tire & Rubber Co. v. McCall, 863 S.E.2d 81, 83–84 (Ga. 2021); Merriman v. Crompton Corp., 146 P.3d 162, 171, 177 (Kan. 2006); Rykoff-Sexton, Inc. v. Am. Appraisal Assocs., 469 N.W.2d 88, 90–91 (Minn. 1991); Bohreer v. Erie Ins. Exch., 165 P.3d 186, 187 (Ariz. Ct. App. 2007); see also Sophia G. Brough, Recent Development, Constitutional Law—The United States Supreme Court Held that “Consent-by-Registration” Statutes Do Not Violate Due Process, 47 Am. J. Trial Advocacy 209, 214–15 (2023).}

_{[40]     243 U.S. 93, 95 (1917).}

_{[41]     Mallory, 600 U.S. at 135–36 (majority opinion of Gorsuch, J., joined by Thomas, Alito, Sotomayor, and Jackson, JJ.).}

_{[42]     Id. at 136–44 (plurality opinion of Gorsuch, J., joined by Thomas, Sotomayor, and Jackson, JJ.).}

_{[43]     In particular, appointing and maintaining an agent for service of process is not a basis for personal jurisdiction. See Ark. Code § 4-20-115; D.C. Code § 29-104.14; Haw. Rev. Stat. § 425R-12; Idaho Code § 30-21-414; Ind. Code § 23-0.5-4-12; Md. Code., Corps. & Ass’ns § 7-210; Me. Rev. Stat. tit. 5, § 115; Miss. Code. § 79-35-15; Mont. Code § 35-7-115; Nev. Rev. Stat. § 77.440; N.D. Cent. Code § 10-01.1-15; S.D. Codified Laws § 59-11-21; Utah Code § 16-17-401; Wash. Rev. Code § 23.95.460. In December 2023, Governor Kathy Hochul of New York vetoed a bill that would have created consent by registration. See S.B. 7476, 2023–2024 Reg. Sess. (N.Y. 2023).}

_{[44]     See, e.g., Lanham v. BNSF Ry., 939 N.W.2d 363, 371 (Neb. 2020), modified on denial of reh’g, 944 N.W.2d 514 (Neb. 2020); Facebook, Inc. v. K.G.S., 294 So. 3d 122, 133 (Ala. 2019); DeLeon v. BNSF Ry., 426 P.3d 1, 4, 8 (Mont. 2018); Segregated Acct. of Ambac Assur. Corp. v. Countrywide Home Loans, Inc., 898 N.W.2d 70, 80–81 (Wis. 2017); Brown v. Lockheed Martin Corp., 814 F.3d 619, 641 (2d Cir. 2016) (addressing a Connecticut statute); Genuine Parts Co. v. Cepec, 137 A.3d 123, 144–46 (Del. 2016); Freeman v. Second Judicial Dist. Ct., 1 P.3d 963, 968 (Nev. 2000); Wal-Mart Stores, Inc., v. Lemaire, 395 P.3d 1116, 1119–20 (Ariz. Ct. App. 2017); Wilson v. Humphreys (Cayman) Ltd., 916 F.2d 1239, 1245 (7th Cir. 1990) (addressing an Indiana statute).}

_{[45]     See, e.g., Chavez v. Bridgestone Ams. Tire Operations, LLC, 503 P.3d 332, 344, 349 (N.M. 2022); Aybar v. Aybar, 177 N.E.3d 1257, 1260, 1266 (N.Y. 2021); DeLeon, 426 P.3d at 7–8; Figueroa v. BNSF Ry., 390 P.3d 1019, 1021–22 (Or. 2017); Segregated Acct., 898 N.W.2d at 73, 77; Aspen Am. Ins. v. Interstate Warehousing, Inc., 90 N.E.3d 440, 447 (Ill. 2017); State ex rel. Norfolk S. Ry. v. Dolan, 512 S.W.3d 41, 52 (Mo. 2017); Bristol-Meyers Squibb Co. v. Super. Ct., 377 P.3d 874, 884 (Cal. 2016), rev’d on other grounds, 582 U.S. 255 (2017); Genuine Parts, 137 A.3d at 139–41.}

_{[46]     See, e.g., K&C Logistics, LLC v. Old Dominion Freight Line, Inc., 374 So. 3d 515, 519–28 (Miss. 2023) (rejecting consent-by-registration even after Mallory); Madsen v. Sidwell Air Freight, No. 1:23-cv-8, 2024 WL 1160204, at *15–16 (D. Utah Mar. 18, 2024) (same); Lumen Techs. Serv. Grp. v. CEC Grp., 691 F. Supp. 3d 1282, 1296 (D. Colo. 2023) (same).}

_{[47]     Mallory, 600 U.S. at 150, 154–63 (Alito, J., concurring in part and concurring in the judgment).}

_{[48]     Id. at 160. For competing views on the Commerce Clause argument, compare John F. Preis, The Dormant Commerce Clause As A Limit on Personal Jurisdiction, 102 Iowa L. Rev. 121, 133–54 (2016) (arguing the Commerce Clause limits jurisdiction), with Stephen E. Sachs, Dormant Commerce and Corporate Jurisdiction, 2023 Sup. Ct. Rev. 213, 218–23 (arguing that plaintiffs would have more success).}

_{[49]     See, e.g., Mallory, 600 U.S. at 170 (Barrett, J., dissenting, joined by Roberts, C.J., and Kagan and Kavanaugh, JJ.) (“Permitting Pennsylvania to impose a blanket claim of authority over controversies with no connection to the Commonwealth intrudes on the prerogatives of other States—domestic and foreign—to adjudicate the rights of their citizens and enforce their own laws.”).}

_{[50]     See Nat’l Pork Producers Council v. Ross, 598 U.S. 356, 364 (2023).}

_{[51]     See, e.g., Fed. R. Civ. P. 12(b), 12(h)(1); Ins. Corp. of Ireland v. Compagnie des Bauxites de Guinee, 456 U.S. 694, 703 (1982).}

_{[52]     See, e.g., La. Rev. Stat. § 22:868(A)(2); Wash. Rev. Code § 48.18.200(1)(b).}

_{[53]     See, e.g., M/S Bremen v. Zapata Off-Shore Co., 407 U.S. 1, 10–14 (1972). A choice-of-law clause is also presumptively enforceable under federal maritime law. Great Lakes Ins. SE v. Raiders Retreat Realty Co., 601 U.S. 65, 76 (2024).}