Litigation

Designating agent for service of process doesn't support personal jurisdiction, Ninth Circuit holds

By Lori Bauman

The Ninth Circuit Court of Appeals held last week that designating an in-state agent for service of process does not, by itself, subject a company to general personal jurisdiction in the state.  In King v. American Family Mutual Insurance, defendant was an out-of-state insurance company that contemplated doing business in Montana.  As the first step in obtaining authorization to sell insurance in the state, and as required by state law, the company appointed the Commissioner of Insurance as its agent for service of process.  Before defendant obtained authorization to sell insurance in Montana, and before it did any business or had any other contacts there, it was sued in Montana by policyholders who lived in another state. 

The Ninth Circuit affirmed dismissal of the action, agreeing with the district court that the appointment of an agent for service of process in Montana was not enough to subject defendant to general personal jurisdiction there.  The court reached that conclusion notwithstanding a 1917 U.S. Supreme Court opinion -- Pennsylvania Fire Insurance Co. v. Gold Issue Mining & Milling Co. -- holding that, where state law requires an insurer to appoint an agent for service in the state, that appointment by itself is sufficient for personal jurisdiction of the insurer.

Full post as published by Northwest Business Litigation Blog on February 11, 2011 (boomark / email).