The United States Supreme Court will soon consider whether the due process clause of the Fourteenth Amendment prohibits a state from requiring that a corporation consent to personal jurisdiction in order to conduct business there.
The question arises from a Pennsylvania Supreme Court case, Mallory v. Norfolk Southern Railroad Co., 266 A.3d 542 (Pa. 2021), which we wrote about here. In Mallory, plaintiff Robert Mallory attempted to hold the Norfolk Southern Railway Co. liable for the colon cancer he allegedly developed after being exposed to chemicals during the two decades that he worked for the railroad in Virginia and Ohio.
Neither Virginia-resident Mallory nor Ohio-based Norfolk Southern Railroad had a case-specific connection to Pennsylvania, and Norfolk Southern Railroad was not “at home” in Pennsylvania. Mallory argued that because Pennsylvania’s mandatory business registration law requires foreign corporations, including Norfolk Southern Railroad, to consent to general jurisdiction in order to conduct business there, Pennsylvania courts could constitutionally exercise jurisdiction over the railroad in all cases.
The Pennsylvania Supreme Court didn’t bite. In its unanimous December 2021 decision, the court held that the statutory scheme violated due process to the extent that it allows for general jurisdiction over foreign corporations “absent affiliations within the state that are so continuous and systematic as to render the foreign corporation essentially at home in Pennsylvania.” The court further stated that “compliance with Pennsylvania’s mandatory registration requirement does not constitute voluntary consent.”
Unsatisfied with the Pennsylvania Supreme Court’s ruling, Mallory petitioned the United States Supreme Court for review. In his petition for review, Mallory alleged that the court “improperly imported principals of personal jurisdiction based on non-consenting defendant’s contacts with a forum state into the analysis of personal jurisdiction over a consenting defendant.” Arguing that a dozen state supreme courts and every federal appellate court have issued conflicting rulings on this jurisdictional issue, Mallory requested the justices grant review of his case and restore uniformity.
The Supreme Court granted review and is poised to determine whether the due process clause of the Fourteenth Amendment precludes a state—like Pennsylvania—from requiring a foreign corporation to consent to personal jurisdiction in order to do business in the state. If the Supreme Court upholds Pennsylvania’s statute as Mallory argues it should, its decision will have a significant impact on corporate litigation. Taken to its logical extreme, national corporations could be subject to jurisdiction in each of the 50 states, even if they are not “at home” there.
The highest court’s review of Mallory v. Norfolk Southern Railroad Co. comes a little over a year after its decision in Ford Motor Co. v. Montana Eighth Judicial District Court. The Ford case was the most notable personal jurisdiction decision in 2021 and considered whether Ford was subject to personal jurisdiction in Montana and Minnesota based on accidents that occurred in each state involving Ford vehicles. Ford argued that because it had not designed, manufactured, or sold the vehicles at issue in either state, there was no causal link between its in-state contacts and the plaintiffs’ claims.
The Court was not persuaded and held that there was a sufficiently strong relationship between Ford, the forum states, and the litigation because Ford had “systematically served” the Montana and Minnesota markets for the type of cars at issue. In its opinion, the Court noted that the decision “proceed[s] as the Court has done for the last 75 years.” However, some commentators posited whether Ford signified a course reversal from more recent and restrictive personal jurisdiction jurisprudence.
The Supreme Court’s review of Mallory v. Norfolk Southern Railroad Co. proves that personal jurisdiction remains a topic of interest for the Court. Corporations watch as the Court determines the breadth of personal jurisdiction which, as Justice Gorsuch put it in Ford, was “once aimed at keeping corporations honest about their out-of-state operations [and] now seemingly risks hauling individuals to jurisdictions where they have never set foot.”
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