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Is Registration As A Foreign Corporation A Form Of Compelled Consent?
Thursday, March 27, 2025

Not too long ago, I wrote about a bill that is currently pending in the Nevada legislature, AB 158.  This bill would authorize Nevada courts to exercise general personal jurisdiction over entities on the sole basis that the entity:

  • is organized, registered or qualified to do business pursuant to the laws of this State;
  • expressly consents to the jurisdiction; or
  • has sufficient contact with Nevada such that the exercise of general personal jurisdiction does not offend traditional notions of fair play and substantial justice.

The first alternative is obviously grounded upon the U.S. Supreme Court's decision in Mallory v. Norfolk Southern Ry. Co., 600 US 122 (2023).  In the case, the Supreme Court in a 5-4 decision held that a Pennsylvania statute did not offend the Due Process clause of the United States Constitution.  The Pennsylvania statute provided that a company’s registration as a foreign corporation” is deemed “a sufficient basis of jurisdiction to enable the tribunals of this Commonwealth to exercise general personal jurisdiction over” the corporation.  42 Pa. Cons. Stat. § 5301(a)(2)(i). 

In a forthcoming article, Professor Jason Jarvis argues:

Involuntary consent is an oxymoron.  Consent must be knowing and voluntary, and consent extracted by threat is coerced and invalid.

Professor Jarvis posits a case-by-case approach to consent whereby the "voluntariness of a corporation’s decision to do business in a state depends on the particular state and the particular corporation". 

The provisions of the California Civil Code concerning contracts and consent line up nicely with Professor Jarvis' premise.  Consent is "essential" to the formation of a contract, Cal. Civ. Code § 1550(2), and that consent must be "free",  Cal. Civ. Code § 1565(1).  Consent is neither "real" nor "free" when obtained through: duress, menace, fraud, undue influence or mistake.  Cal. Civ. Code § 1567.   

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