The Long Arm of U.S. Law: What Foreign Companies Don't Know Can Hurt Them

This post is part of a Freshfields series breaking down key aspects of U.S. dispute resolution for international clients and their counsel.

Wait, what?  How can they sue our company in the United States?  We don’t even have an office there.  We hear this a lot.  For a company headquartered outside of the United States, receiving notice that it has been sued in an American court can feel disorienting. 

The short answer to these questions is surprising to some: even without a physical office or employees on the ground, U.S. courts may still sometimes assert jurisdiction through a legal mechanism known as a long-arm statute—though, as always, the outcome turns on the specific facts of each case. In this post, we examine what long-arm statutes are, how they interact with limits established by the Constitution, and what they mean for international businesses operating in or adjacent to the United States.

The Problem That Long-Arm Statutes Solve

Personal jurisdiction, the power of a court to bind a particular defendant to its judgment, has a complicated history in American law. The Supreme Court’s decision in Pennoyer v. Neff, 95 U.S. 714, 720 (1877), reflected a rigid, territorial conception: as a general matter, a state court’s authority depended on the defendant’s presence in the state, consent to jurisdiction, or property located there. This rule made reasonable sense in an era of localized commerce, but as interstate and then international trade expanded, that rigid territorial model became increasingly unworkable and difficult to apply to companies whose products, contracts, or conduct affected a state without the company maintaining a formal local presence there. States responded by enacting long-arm statutes, laws that extend the reach of their courts to out-of-state and foreign defendants who have defined connections to the forum.

What a Long-Arm Statute Is, and How It Works

Every U.S. state has passed a long-arm statute. These laws vary in their structure, but they fall into two broad categories. The first is an enumerated-act statute, which lists specific conduct that triggers jurisdiction: transacting business in the state, committing a tort within its borders, owning property there, or entering into a contract to be performed there. If a defendant's conduct matches one of the listed categories, the court may proceed, as long as the statute does not authorize jurisdiction beyond the limits set by the Constitution’s Due Process Clause. Several states, including New York and Florida, follow this approach. The second category is a constitutional-maximum statute, which extends jurisdiction to the fullest extent permitted by the Constitution. California, for instance, follows this broader approach, collapsing the two-step analysis into a single constitutional inquiry.

That constitutional limit was defined by the Supreme Court in International Shoe Co. v. Washington, 326 U.S. 310, 316 (1945). The Court held that a non-resident defendant may be under the jurisdiction of a state court if it has “certain minimum contacts with [the state] such that the maintenance of the suit does not offend ‘traditional notions of fair play and substantial justice.’” The focus is not merely whether the defendant’s conduct had effects in the forum, but whether the defendant purposefully availed itself of the privilege of conducting activities there, or purposefully directed conduct towards the forum. Random, fortuitous, or attenuated contacts are not enough. See Burger King Corp. v. Rudzewicz, 471 U.S. 462, 475 (1985) (upholding jurisdiction where a Michigan franchisee’s long-term contract with a Florida franchisor reflected purposeful, ongoing ties to the forum; “‘purposeful availment’...  ensures that a defendant will not be haled into a jurisdiction solely as a result of ‘random,’ ‘fortuitous,’ or ‘attenuated’ contacts”); World-Wide Volkswagen Corp. v. Woodson, 444 U.S. 286, 287 (1980) (holding no jurisdiction where a New York car dealer’s only  tie to Oklahoma was a customer’s later accident there; “[t]he foreseeability that is critical to due process analysis . . . is that the defendant’s conduct and connection with the forum State are such that he should reasonably anticipate being haled into court there”); Walden v. Fiore, 571 U.S. 277, 285 (2014) (determining a lack of jurisdiction where the defendant’s conduct occurred entirely in Georgia and only affected Nevada plaintiffs after the fact; the inquiry “looks to the defendant’s contacts with the forum State itself, not the defendant’s contacts with persons who reside there”); Hanson v. Denckla, 357 U.S. 235, 253 (1958) (finding no jurisdiction where the only tie to the State of Florida tie was the settlor’s own later, unilateral move there, not any act of the Delaware trustee; “there [must] be some act by which the defendant purposefully avails itself of the privilege of conducting activities within the forum State.”). No long-arm statute, however broadly written, can exceed this constitutional ceiling.

What This Means for International Companies

The practical implications are significant. A foreign company that deliberately sells products into a particular U.S. state, targets American consumers through a localized website, signs contracts with U.S. counterparties, or places goods into a distribution chain targeting a specific market may find itself subject to personal jurisdiction in that state, even without a single employee or office there. Depending on the company’s specific circumstances, a court could hold that each of those commercial touchpoints is the kind of contact that a long-arm statute reaches.

In many cases, a federal court’s personal jurisdiction analysis tracks the long-arm statute of the state in which the court sits. But for certain federal law claims, Federal Rule of Civil Procedure 4(k)(2) can permit jurisdiction over a foreign defendant based on its contacts with the United States as a whole, if the defendant is not subject to jurisdiction in any one state and due process is satisfied. See Bradford Co. v. ConTeyor North America, Inc., 603 F.3d 1262, 1272 (2010).

The key takeaway for international corporations is to not assume that physical absence from the U.S., by itself, insulates from a lawsuit. We recommend that companies audit their U.S.-facing commercial activities, digital presence, and contractual relationships as part of any litigation risk assessment. As discussed in our prior post on forum selection clauses, negotiating a contractual choice of forum can be a valuable tool for controlling where a future dispute is heard. Understanding long-arm statute exposure is an important first step in making that choice wisely.

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