Personal Jurisdiction: A New Battlefront in Corporate Criminal Cases

Personal Jurisdiction: A New Battlefront in Corporate Criminal Cases

In Short

The Situation: Actions by the Advisory Committee on Criminal Rules—and ultimately the U.S. Supreme Court—appear to be expanding the courts' ability to assert personal jurisdiction over foreign corporate defendants in criminal cases.

The Result: Companies with no physical presence in the United States may be subjected to prosecution.

Looking Ahead: Foreign corporate defendants with no U.S. presence that are served have options, but must make significant choices.

The U.S. Supreme Court in recent years has been steadfast in cabining the authority of state courts to assert personal jurisdiction over corporate defendants in civil cases. In 2017, the Court has continued this trend on multiple fronts: In BNSF Railway Co v. Tyrell, in which no injury had occurred in the state, the Court held that a Montana court lacked general jurisdiction over a railroad when the railroad was not incorporated or headquartered in Montana and its activities there were otherwise not "so substantial and of such a nature as to render the corporation at home in that State." A few weeks later, in Bristol-Myers Squibb Co. v. Superior Court of California, the Supreme Court held that a California court lacked specific jurisdiction over a drug company when the company did not develop the allegedly harmful drug in California, the plaintiffs did not buy the drug there, and the plaintiffs did not suffer injuries in the state.

But as jurisdiction over corporations in civil cases arguably contracts, what of jurisdiction over them in criminal cases? Paradoxically, that appears to be expanding, although few have noticed. Until recently, the question was academic because Federal Rule of Criminal Procedure 4 required prosecutors to mail a summons to a foreign corporation's U.S. address, meaning the corporation had a U.S. presence. But prosecutors succeeded in changing that in late 2016. And with evermore aggressive prosecutions, foreign corporations may face the prospect of being prosecuted in U.S. courts even if they have no U.S. presence. A corporation's most obvious weapon against such a prosecution—moving to dismiss for lack of personal jurisdiction—remains untested.


Until recently, Rule 4 required prosecutors to mail a summons to a corporation's last known U.S. address. In practical terms, that meant foreign corporations that were successfully served had some U.S. presence, and personal jurisdiction was not questioned. In addition, corporations usually choose to answer criminal charges, and the traditional rule in criminal cases is that if the defendant is before the court (even if the government abducted him), the court has jurisdiction.

In 2012, the U.S. Justice Department set out to change Rule 4. The Department told the Advisory Committee on Criminal Rules that amendments were "necessary to ensure that organizations that commit domestic offenses are not able to avoid liability through the simple expedients of declining to maintain an agent, place of business and mailing address within the United States." The Committee, and ultimately the Supreme Court, removed the mailing requirement from Rule 4 and permitted service of a foreign corporation through "any means that gives notice." The new rule took effect in December 2016.

The Issue

Amended Rule 4 raises the novel prospect of federal prosecutors' serving foreign corporations that have no presence in the United States. In fact, the Advisory Committee recognized that the amended rule "would provide a mechanism for effecting service on foreign corporations that commit serious crimes in the United States without having any physical presence here."

But the Committee did not confront how prosecutors' new ability could force to the fore an issue that has thus far remained unexamined: How and when does a court have personal jurisdiction over an absent foreign corporate criminal defendant? That includes subsidiary issues, such as whether the jurisdictional test under the Due Process Clause that applies to state courts also applies to federal courts (a question the Supreme Court reserved in Bristol-Myers); whether a court could obtain jurisdiction over a foreign corporation through a U.S.-based subsidiary (rather than having to consider each corporation's contacts separately); and whether federal courts have national personal jurisdiction, and how such jurisdiction might be limited by, among other things, the Sixth Amendment, which guarantees the right to be tried before "an impartial jury of the state and district wherein the crime shall have been committed." The question of personal jurisdiction is separate from the question of whether a criminal statute applies to conduct done abroad.

Courts have been relatively silent on the issue that revised Rule 4 raises, having addressed it only a handful of times. And the most recent federal case dodged the issue. Although the court opined that the civil minimum-contacts test does not apply, it ultimately held that, because the corporation had participated in the criminal proceedings (such as pleading not guilty), the court had jurisdiction under the age-old rule that courts have personal jurisdiction over defendants who are present in court.

What Foreign Corporations Can Do

Foreign corporate defendants who lack a U.S. presence but are served with a summons face two critical choices in contesting personal jurisdiction.

First is the method. Courts routinely permit civil defendants to contest personal jurisdiction either through a special appearance or through the defendant's first motion. Essentially, the court indulges the fiction that the defendant is not present in the court. On first glance, this approach seems eminently reasonable in the criminal context. But there are hurdles. To begin, there is little evidence in the reported case law of criminal defendants attempting special appearances. One court observed that it could "not recall encountering a 'Special Appearance' in a criminal case before." And there is no criminal rule permitting "special appearances."

Nonetheless, criminal defendants who do not wish to run the risks of not responding to the summons have arguments to support a special appearance. For example, when revising Rule 4, the Advisory Committee explicitly assumed special appearances were possible, opining that "nothing in the proposed amendment addresses or limits any authority of the court to allow a special appearance to contest service on other grounds." Moreover, criminal defendants generally are entitled to more procedural protections than civil defendants; thus, if permitting challenges to personal jurisdiction is warranted to protect civil defendants, it should be all the more appropriate in criminal cases.

Another wrinkle in deciding on the method is that the criminal rules do not provide a perfect avenue for moving to dismiss for lack of personal jurisdiction. Rule 12(b)(2) does say "[a] motion that the court lacks jurisdiction may be made at any time while the case is pending." But courts have read that to mean subject matter jurisdiction. The better candidate is thus Rule 12(b)(1), which permits a defendant to "raise by pretrial motion any defense, objection, or request that the court can determine without a trial on the merits." In any event, the defendant's best approach is probably to have counsel enter a special appearance and challenge jurisdiction first (along with service, perhaps).

The second step is determining the defendants' arguments. The most aggressive argument would be to invoke an unspoken implication of the classic criminal personal-jurisdiction rule: If the defendant is not before the court, the court does not have jurisdiction (at least when that defendant also has no U.S. presence). This argument may not be wholly satisfying to courts. There is no way for a corporation itself to appear in court; by necessity, only a representative can be present. So it is a stretch to say the government must produce the corporation in court before jurisdiction attaches. (Should the government abduct the CEO?) Nonetheless, to the extent courts have rejected the civil personal jurisdiction tests for the criminal context, they have done so by claiming personal jurisdiction in criminal cases is "different," and that the criminal defendant must be present. This argument forces courts to face the logical implication, and limitation, of that theory in the context of corporate defendants.

The more moderate argument is that the minimum-contacts test from the civil context should apply. And with civil personal jurisdiction tightening up, this could provide foreign corporate criminal defendants stronger grounds for contesting jurisdiction. The argument is also intuitively attractive because courts already know how to apply that test. And if a court cannot assert its jurisdiction over a corporation in a civil matter, one would expect it to lack jurisdiction over that corporation in a criminal matter.

Assuming the minimum-contacts test applies, the subsidiary arguments become mostly factual. Since the corporation is foreign, the court will be looking only at specific jurisdiction, which depends on the affiliation between the forum and the underlying controversy (in criminal cases, that would be the alleged crime). It may be that the alleged crime has a sufficient connection to the United States. Thus, the strength of particular defendants' arguments will vary.

These constitutional questions could have been avoided—and maybe should have been. The mailing requirement of former Rule 4 provided a hedge against these thorny issues. The day is approaching when foreign corporations will have to fight this battle.

Three Key Takeaways

  1. Changes to Federal Rule of Criminal Procedure 4 mean that prosecutors might prosecute foreign corporations that lack a U.S. presence.
  2. Courts have been quiet on the issues raised by revised Rule 4.
  3. Foreign corporations have arguments to contest personal jurisdiction.

Lawyer Contacts

For further information, please contact your principal Firm representative or one of the lawyers listed below. General email messages may be sent using our "Contact Us" form, which can be found at

C. Kevin Marshall

Andrew J. Bentz

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