Can You Sue an Out-of-State Corporation in Minnesota?

How Does a Minnesota Court Get Power Over an Out-of-State Corporation?

A Minnesota court gets power over an out-of-state corporation through the long-arm statute, Minn. Stat. § 543.19, which the Minnesota Supreme Court reads to reach as far as federal due process allows. When the constitutional test is met, the statute is met as well.

Under Minn. Stat. § 543.19 subd. 1, “a court of this state with jurisdiction of the subject matter may exercise personal jurisdiction over any foreign corporation” “in the same manner as if it were a domestic corporation”, as to “a cause of action arising from any acts enumerated in this subdivision.” The corporation, acting itself or through an agent, must have done one of four things:

1. It “owns, uses, or possesses any real or personal property situated in this state”.
2. It “transacts any business within the state”.
3. It “commits any act in Minnesota causing injury or property damage”.
4. It “commits any act outside Minnesota causing injury or property damage in Minnesota”. For this fourth category, the statute finds no jurisdiction when “Minnesota has no substantial interest in providing a forum” or when “the burden placed on the defendant by being brought under the state’s jurisdiction would violate fairness and substantial justice.”

The statute’s list matters less than it appears, because of how the Minnesota Supreme Court reads it. In Valspar Corp. v. Lukken Color Corp., 495 N.W.2d 408 (Minn. 1992), the court held: “If the personal jurisdiction requirements of the federal constitution are met, the requirements of the long-arm statute will necessarily be met also.” It added that “when analyzing most personal jurisdiction questions, Minnesota courts may simply apply the federal case law.” The practical question for you is whether the corporation’s own dealings with Minnesota meet the federal standard.

What Contacts With Minnesota Count Toward Jurisdiction?

Contacts count when the corporation itself aimed them at Minnesota: contracts with Minnesota companies, letters and visits to a Minnesota office, emails to customers it knew were here, and advertising bought for the Minnesota market. Minnesota courts weigh those contacts under a five-factor test.

The Minnesota Supreme Court restated the test in Rilley v. MoneyMutual, LLC, 884 N.W.2d 321 (Minn. 2016): “(1) the quantity of contacts with the forum state; (2) the nature and quality of those contacts; (3) the connection of the cause of action with these contacts; (4) the interest of the state providing a forum; and (5) the convenience of the parties.” Under Juelich v. Yamazaki Mazak Optonics Corp., 682 N.W.2d 565 (Minn. 2004), the first three factors decide whether minimum contacts exist, and the last two decide whether exercising jurisdiction is reasonable.

The decided cases show what qualifies:

• Business dealings directed at a Minnesota company. In Valspar, a Connecticut-based corporation wrote to a paint maker’s Minnesota headquarters about licensing a wood-stain formula and sent its representatives to Minneapolis to present it. The trial court found those contacts enough for jurisdiction over the Connecticut company, and the Minnesota Supreme Court extended that jurisdiction to a related contract claim.
• Electronic contacts with known Minnesotans. In Rilley, an online payday-loan matching service sent emails to applicants whose applications showed they were Minnesota residents. The court wrote that “it would be arbitrary to exclude emails from consideration in a minimum contacts analysis,” and it counted those emails.
• Advertising aimed at Minnesota. The same court counted search-engine ads the company bought for “payday loans Minnesota” and “payday loans Minneapolis.” But it held that “a purely national advertising campaign that does not target Minnesota specifically cannot support a finding of personal jurisdiction.”
• Passive websites. In Juelich, the court said that “Maintenance of a passive website generally does not support the exercise of jurisdiction.”

The sibling pages on how courts measure minimum contacts and jurisdiction over online sellers go deeper on each category. Before filing, I suggest collecting the corporation’s own emails, invoices, contracts, and ads that name Minnesota, because those documents carry the proof of contacts.

What Is the Difference Between General and Specific Jurisdiction?

General jurisdiction lets a court hear any claim against a corporation where the corporation is “at home”, which the U.S. Supreme Court treats as its state of incorporation and its principal place of business. Specific jurisdiction reaches corporations from elsewhere, but only for claims that arise out of or relate to their contacts with the state.

The U.S. Supreme Court set out both kinds in Ford Motor Co. v. Montana Eighth Judicial District Court, 592 U.S. 351 (2021). For general jurisdiction, “the “equivalent” forums for a corporation are its place of incorporation and principal place of business.” The Court left open “the possibility that in an exceptional case” a corporation might also be “at home” elsewhere. For specific jurisdiction, the plaintiff’s claims must “arise out of or relate to the defendant’s contacts” with the state, and the Court added: “That does not mean anything goes.”

Ford included a Minnesota case. A Minnesota resident was injured in Minnesota when the air bag in a Ford Crown Victoria failed to deploy, though that car had first been sold in North Dakota. Ford had advertised, sold, and serviced that model in Minnesota for years, and the Court held Minnesota’s courts could hear the suit: “When a company like Ford serves a market for a product in a State and that product causes injury in the State to one of its residents, the State’s courts may entertain the resulting suit.”

Minnesota’s statute has a parallel limit. Under Minn. Stat. § 543.19 subd. 3, “Only causes of action arising from acts enumerated in subdivision 1 may be asserted against a defendant in an action in which jurisdiction over the defendant is based upon this section.” Valspar held that subdivision 3 places no barrier beyond what due process already requires.

One unsettled point affects claims with no Minnesota connection. In Mallory v. Norfolk Southern Railway Co., 600 U.S. 122 (2023), the U.S. Supreme Court held that the Due Process Clause did not bar suit under a Pennsylvania statute that makes registering to do business there consent to suit on any claim. It vacated the Pennsylvania Supreme Court’s judgment and remanded the case. It said it was not deciding whether any other statutory scheme would suffice. Minnesota’s section on serving foreign corporations, Minn. Stat. § 303.13 subd. 1, states that a foreign corporation “shall be subject to service of process” on its registered agent or as § 5.25 provides. If your claim has a real Minnesota connection, the jurisdiction argument does not depend on registration at all.

How Does a Forum-Selection Clause Change Where You Can Sue?

Unless a statute makes it void, a contract clause naming the courts for disputes should be given effect in Minnesota unless the party trying to avoid it shows that enforcing it would be unfair or unreasonable. A clause naming another state’s courts can lead a Minnesota court to dismiss the suit even though it has jurisdiction.

In Hauenstein & Bermeister, Inc. v. Met-Fab Industries, Inc., 320 N.W.2d 886 (Minn. 1982), a Minnesota corporation bought a used press brake from a Florida broker and later sued in Hennepin County when it would not work. The two-page sales agreement said “venue shall be in the State of Florida only.” The Minnesota Supreme Court affirmed the dismissal, holding that “when the parties to a contract agree that actions arising from that contract will be brought in a particular forum, that agreement should be given effect unless it is shown by the party seeking to avoid the agreement that to do so would be unfair or unreasonable.”

The court grouped the grounds for refusing a clause into three categories: “(1) the chosen forum is a seriously inconvenient place for trial; (2) the choice of forum agreement is one of adhesion; and (3) the agreement is otherwise unreasonable.” It declined to treat boilerplate in a short, readable two-page form as an adhesion contract, because the Minnesota buyer showed no great disparity in bargaining power and no lack of opportunity to negotiate. Hauenstein described the issue as “whether a court should refrain from exercising the jurisdiction that it admittedly possesses to give effect to the parties’ intentions as expressed in a forum selection clause.”

An arbitration clause has its own rule: on a party’s motion, Minn. Stat. § 572B.07 provides that “Unless the court finds that there is no enforceable agreement to arbitrate, it shall order the parties to arbitrate.”

Under Minn. Stat. § 337.10 subd. 1, “Provisions contained in, or executed in connection with, a building and construction contract to be performed in Minnesota making the contract subject to the laws of another state or requiring that any litigation, arbitration, or other dispute resolution process on the contract occur in another state are void and unenforceable.” Sales representative agreements are addressed in Minn. Stat. § 325E.37 subd. 7, and franchise agreements in Minn. R. 2860.4400, item J.

The same rule works in your favor when the clause names Minnesota. I suggest that your contracts with out-of-state customers and suppliers name a Minnesota court for disputes, because under Hauenstein the other side would then carry the burden of showing that clause is unfair or unreasonable.

How Do You Serve an Out-of-State Corporation?

You can serve an out-of-state corporation by delivering the summons to an officer, a managing agent, or its registered agent, whether inside or outside Minnesota. When it has no agent here, Minnesota law lets you serve the Secretary of State for a $50 fee in the situations the statute lists.

The methods come from several sources:

• Officers and agents. Minn. R. Civ. P. 4.03(c) provides for service “Upon a domestic or foreign corporation, by delivering a copy to an officer or managing agent, or to any other agent authorized expressly or impliedly or designated by statute to receive service of summons”.
• The registered agent. Under Minn. Stat. § 303.13 subd. 1, a foreign corporation is subject to service “by service on its registered agent” or “as provided in section 5.25.”
• Service outside Minnesota. Under Minn. Stat. § 543.19 subd. 2, service on a corporation subject to the long-arm statute “may be made by personally serving the summons upon the defendant outside this state with the same effect as though the summons had been personally served within this state.” Subdivision 4 keeps every other method the law or court rules allow.
• The Secretary of State. Minn. Stat. § 5.25 subd. 4 allows service through the Secretary of State, with “a fee of $50,” on a foreign corporation authorized to do business here. One listed situation is a corporation that “fails to appoint or maintain in this state a registered agent.” The same subdivision treats a corporation as doing business in Minnesota “if it makes a contract with a resident of Minnesota to be performed in whole or in part by either party in Minnesota, or if it commits a tort in whole or in part in Minnesota against a resident of Minnesota.” For actions arising from that contract or tort, the statute treats the Secretary of State as the corporation’s “true and lawful attorney” for service. Under subdivision 6, the Secretary of State mails the papers by certified mail to the address you provide when the corporation “has never been authorized to do business in this state.”

Under Minn. Stat. § 303.20, a foreign corporation’s failure to obtain a certificate of authority “does not impair the validity of any contract or act of such corporation, and shall not prevent such corporation from defending any action in any court of this state.” The summons itself must warn the corporation, under Minn. R. Civ. P. 4.01, that a default judgment will be entered if it does not answer.

Which Minnesota County Should Hear the Case?

A Minnesota district court case against a corporation belongs in a county where the corporation resides, meaning a county where it has an office, resident agent, or business place, or in the county where the claim or part of it arose. For an out-of-state corporation with no office, resident agent, or business place in Minnesota, that is the county where the claim arose.

Under Minn. Stat. § 542.09, actions not covered by the more specific venue sections “shall be tried in a county in which one or more of the defendants reside when the action is begun or in which the cause of action or some part thereof arose.” A corporation “shall be considered as residing in any county wherein it has an office, resident agent, or business place.” A defendant who thinks another county is more convenient can bring a motion to change venue.

For smaller claims, conciliation court has its own county rules. Under Minn. Stat. § 491A.01 subd. 7, a conciliation claim against a foreign corporation may be brought “in the county in which the plaintiff resides” when the corporation “does not appoint or maintain a registered agent in this state, withdraws from the state, or the certificate of authority of the corporation is canceled or revoked.” Under subdivision 3a, “Except as provided in subdivisions 4 and 5,” conciliation court hears civil claims where the amount at stake “does not exceed: (1) $20,000; or (2) $4,000, if the claim involves a consumer credit transaction.” Subdivision 4 provides that “The conciliation court does not have jurisdiction over the following actions,” a list that includes actions “involving claims of defamation by libel or slander,” actions “for specific performance, except to the extent authorized in subdivision 5,” actions “requesting or involving prejudgment remedies,” and actions “involving injunctive relief, except to the extent authorized in subdivision 5.”

When Can the Corporation Move the Case to Federal Court?

An out-of-state corporation sued in a Minnesota state court can transfer the case to federal court in Minnesota, a step called removal, when it and the plaintiff are citizens of different states, more than $75,000 is in controversy, and it files its notice of removal in time. The federal court then applies the same jurisdictional reach as a Minnesota state court.

Federal diversity jurisdiction covers civil actions “where the matter in controversy exceeds the sum or value of $75,000, exclusive of interest and costs,” between citizens of different states, under 28 U.S.C. § 1332(a). For this purpose, under § 1332(c)(1), “a corporation shall be deemed to be a citizen of every State and foreign state by which it has been incorporated and of the State or foreign state where it has its principal place of business.”

Under 28 U.S.C. § 1441(a), such a case “may be removed by the defendant or the defendants, to the district court of the United States for the district and division embracing the place where such action is pending.” Section 1441(b)(2) bars removal of a diversity case if any of the parties in interest “properly joined and served as defendants is a citizen of the State in which such action is brought.” When the only defendant is a corporation incorporated and headquartered outside Minnesota, that bar does not apply. Removal also has time limits: 28 U.S.C. § 1446(b) and § 1446(c)(1) govern when a notice of removal must be filed, and 28 U.S.C. § 1447(c) governs when a motion to remand “on the basis of any defect other than lack of subject matter jurisdiction” must be made.

Removal does not change the jurisdiction question. Under Fed. R. Civ. P. 4(k)(1)(A), service establishes personal jurisdiction over a defendant “who is subject to the jurisdiction of a court of general jurisdiction in the state where the district court is located”. A federal court can also transfer the case to another district under 28 U.S.C. § 1404(a) “For the convenience of parties and witnesses, in the interest of justice”. The page on removal to federal court covers the procedure.

How Do Courts Decide a Jurisdiction Challenge?

The corporation raises lack of personal jurisdiction by motion or in its answer, and it waives the defense by leaving it out of a motion in the circumstances Rule 12.07 describes, or out of every motion, its answer, and any amendment allowed as a matter of course. At that early stage, you need a prima facie showing, with your complaint and affidavits taken as true, and close cases are resolved in favor of keeping jurisdiction.

Minn. R. Civ. P. 12.02 lets a defendant raise “(b) lack of jurisdiction over the person” by motion. Under Rule 12.08(a), that defense “is waived (1) if omitted from a motion in the circumstances described in Rule 12.07, or (2) if it is neither made by motion pursuant to this rule nor included in a responsive pleading or an amendment thereof permitted by Rule 15.01 to be made as a matter of course.” In my practice, the owner of an out-of-state company sued in a Minnesota district court once asked me to assess the case. The court’s power over the company was one of the first issues I raised, because the waiver rule puts that objection on the same clock as the answer. Because of that rule, a corporation that intends to contest jurisdiction has reason to raise it in its first filing.

The standards favor a plaintiff with good evidence. In Rilley, the court decides “whether, taking all the factual allegations in the complaint and supporting affidavits as true, the plaintiff has made a prima facie showing of personal jurisdiction.” Juelich says the same: “At the pretrial stage, however, the plaintiffs allegations and supporting evidence are to be taken as true.” But once the corporation files an affidavit denying a contact, general statements in your complaint are not enough; Rilley rejected the borrowers’ television-ad theory because they offered no specific evidence that the ads targeted Minnesota. And Valspar holds that “in a close case, doubts should be resolved in favor of retention of jurisdiction.”

The sibling page on a motion to dismiss for lack of personal jurisdiction walks through the motion itself.

How Do You Collect a Minnesota Judgment From an Out-of-State Corporation?

You collect by taking the Minnesota judgment to the courts of the state where the corporation has assets. Federal law requires every court in the United States to give a properly authenticated Minnesota judgment the same full faith and credit it has in Minnesota.

Under 28 U.S.C. § 1738, judicial proceedings “so authenticated, shall have the same full faith and credit in every court within the United States and its Territories and Possessions as they have by law or usage in the courts of such State, Territory or Possession from which they are taken.” Each state has its own filing procedure for judgments from elsewhere. Minnesota’s procedure for judgments coming the other way shows the shape: under Minn. Stat. § 548.27, “A certified copy of any foreign judgment may be filed in the office of the court administrator of any district court of this state”, and the administrator “shall treat the foreign judgment in the same manner as a judgment of any district court or the supreme court of this state.”

I suggest learning where the corporation keeps bank accounts, receivables, and property before you file, because a judgment collects only against assets you can reach. For how a judgment grows while you collect, the page on interest on a Minnesota judgment explains the rates.

Next Steps Before You File

I suggest answering five questions before suing an out-of-state corporation in Minnesota, because they are the questions the court and the corporation will raise first:

1. What did the corporation itself do in Minnesota, and which contracts, purchase orders, emails, invoices, ads, or visits show it?
2. Does your contract with the corporation contain a forum-selection clause or an arbitration clause, and which state’s courts or which arbitration forum does it name?
3. Does the Minnesota Secretary of State’s record show a registered agent and address for the corporation? The answer decides which service route under § 5.25 applies.
4. Which county fits § 542.09, and does the claim fit within conciliation court’s limits?
5. Where does the corporation hold bank accounts, receivables, and property that a judgment could reach?

Each answer depends on facts this page cannot know: what the corporation did in Minnesota, what your contract says, and where its money is. If you would like my analysis of whether a Minnesota court can reach a particular out-of-state company and how to serve it, email [email protected] with a short description of your dealings with the company. More on handling business disputes is on the business litigation page.