Out of Woods and into the Rules: The Relationship between State Foreign Corporation Door-Closing Statutes and Federal Rule of Civil Procedure 17(b)

In Woods versus Interstate Realty Co. (1949), the US Supreme Court held that a federal court exercising diversity jurisdiction must close its doors to an unregistered foreign corporation if the courts of the forum state would do so. Lower federal courts frequently have differed over the impact of Fe...

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Bibliographic Details
Published in:Virginia law review 1986-05, Vol.72 (4), p.767-809
Main Author: Little, Laura E.
Format: Article
Language:English
Subjects:
Civil procedures
Companies
Corporate regulation
Corporations
Federal court decisions
Federal courts
Federal law
Federal legislation
Foreign
Jurisdiction
Legislation
Litigation
Rule of law
State court decisions
State law
State laws
State statutes
Statutory law
Supreme Court decisions
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Summary:In Woods versus Interstate Realty Co. (1949), the US Supreme Court held that a federal court exercising diversity jurisdiction must close its doors to an unregistered foreign corporation if the courts of the forum state would do so. Lower federal courts frequently have differed over the impact of Federal Rule of Civil Procedure 17(b), and recent Supreme Court decisions have been contrary to Woods. A survey of contemporary foreign corporation laws, a summary of the development of the rationale underlying Woods, and subsequent refinements of the doctrine from Erie Railroad Co. versus Tompkins (1938) indicate that Woods is irreconcilable with recent Supreme Court precedents and that lower federal courts have erred in addressing the issue. An alternative approach would give full effect to the congressional command of the Rules Enabling Act, providing interim relief where a foreign corporation door-closing statute is not intended to regulate a federal court's exercise of diversity jurisdiction. Long-term relief requires rejection of Woods by amendment to the Rule or via Supreme Court opinion.
ISSN:0042-6601
1942-9967
DOI:10.2307/1072910