On Nov. 8, the U.S. Supreme Court heard argument in Mallory v. Norfolk Southern Railway Co., an under-the-radar case that will have wide-reaching implications for plaintiffs and corporate defendants.
Though it has been overshadowed by the many hot-button issues being decided by the justices, Mallory might be one of the biggest sleeper cases this term.
And it is especially significant for those involved in class action, products liability, mass tort and corporate litigation.
The parties present a straightforward question for the court: Can a Virginia resident sue a Virginia company in Pennsylvania for acts that occurred in Virginia and Ohio based solely on the fact that the company is registered to do business there?
Under the Supreme Court’s 2011 and 2014 decisions in and Goodyear Dunlop Tires Operations SA v. Brown[1] and Daimler AG v. Bauman,[2] most would assume that answer to be an easy “no.”
But more than a century ago, while still under Pennoyer v. Neff’s[3] territorial approach to personal jurisdiction, the court held in Pennsylvania Fire Insurance Co. v. Gold Issue Mining Co.[4] that such a case could proceed under a consent-by-registration theory.
Standing at the crossroads of overruling a 100-year-old decision or continuing its recent trend favoring a narrow view of general jurisdiction, the justices appear ready to stick with the latter or, as an alternative, find that consent-by-registration statutes constitute an unconstitutional condition.
In short, the court appears likely confirm that corporate defendants remain safe “at [their] home[s],”[5] and not those of their registered agents.
Lay of the Land
There are two kinds of personal jurisdiction.
The first is general or all-purpose, which extends to any and all claims brought against a defendant, regardless of those claims’ relation to the forum.[6] The second is specific or case-linked, which concerns the facts of the underlying suit.[7] Mallory involves the first.
In 1878, the Pennoyer court adopted a territorial approach to personal jurisdiction focusing on the defendant’s physical presence in the forum.[8]
As Justice Neil Gorsuch observed, in the years following that decision,
States sought to obviate any potential question about corporate jurisdiction by requiring an out-of-state corporation to incorporate under their laws too, or at least designate an agent for service of process.[9] [T]he idea was to secure the out-of-state company’s presence or consent to suit [there].[10]
Thus, in 1917 the Supreme Court in Pennsylvania Fire formally adopted the concept of general corporate jurisdiction under a “registration-by-consent” theory,[11] holding that,
where a state statute notifies an out-of-state corporation that by registering and appointing an agent for service of process sin the state, the corporation has consented to general personal jurisdiction there.[12]
Then, in 1945, the Supreme Court issued its seminal decision in International Shoe Co. v. Washington.[13]
There, the court held for the first time that a state could exercise personal jurisdiction so long as the corporate defendant had “minimum contacts … such that the maintenance of the suit [did] not offend traditional notions of fair play and substantial justice,” or if the corporation’s continuous operations in the forum state were “so substantial and of such a nature as to justify suit against it on causes of action arising from dealings entirely distinct from those activities.”[14]
Despite adopting this new approach, the court did not overrule Pennsylvania Fire. Nor did it weigh in on the continued viability of consent-by-registration.
In 1977, however, the Supreme Court in Shaffer v. Heitner[15] held that “all assertions of state-court jurisdiction must be evaluated according to the standards set forth in [International Shoe] and its progeny.”[16]
Thus, “[t]o the extent that prior decisions [decided on the rationales of Pennoyer were] inconsistent with [International Shoe], they [were] overruled.”[17] Yet, even after Shaffer, some vestiges of Pennoyer’s territorial jurisdiction remain.
For example, in 1990, the court upheld tag jurisdiction based on in-state service of process in Burnham v. Superior Court,[18] finding that physical presence was one of many traditional bases for personal jurisdiction.[19]
Recently, in Goodyear, the Supreme Court emphasized that a state court may exercise general jurisdiction only when the defendant is “essentially at home” there.[20]
Three years later in Daimler, the court clarified that only a limited set of affiliations with a forum will expose a defendant to general jurisdiction there.[21] For corporations, the paradigm forums are their places of incorporation and principal place of business.[22]
That said, the court has left open the possibility that in an exceptional case[23] a corporation might also be “at home” elsewhere.[24]
Background of Mallory v. Norfolk Southern Railway Co.
Robert Mallory is a Virginia resident who worked for Norfolk Southern Railway Co. for 17 years.
Norfolk Southern is a national transportation company incorporated and (during the relevant period) headquartered in Virginia. During Mallory’s employment, he worked on railways in Virginia and Ohio.
Since retiring, Mallory was diagnosed with colon cancer. He sued Norfolk Southern in Philadelphia, alleging he was exposed to harmful carcinogens and toxic chemicals while working for the company. But he does not assert that he suffered any occupational exposures in Pennsylvania.
Still, Mallory maintains that Pennsylvania courts have personal jurisdiction over Norfolk Southern because of its compliance with the state’s foreign entity registration and long-arm statutes.
Pennsylvania’s registration statute provides, in part, that foreign entities may not do business in Pennsylvania until they register with the secretary of the commonwealth.[25] And the long-arm statute provides that Pennsylvania courts may exercise general personal jurisdiction based on qualification or registration as a foreign corporation.[26]
The trial court dismissed the suit for lack of personal jurisdiction. The Supreme Court of Pennsylvania affirmed, emphasizing the modern trend of general jurisdiction and observing that requiring a company to involuntarily consent to general jurisdiction to conduct in-state business would impose an unconstitutional condition.
Mallory timely appealed. And the Supreme Court granted certiorari.[27]
The Parties’ Arguments
After the parties submitted their briefs, the U.S. solicitor filed an amicus brief in support of Norfolk Southern. Solicitor General Elizabeth Prelogar also moved for leave to participate in oral argument, which the court granted.
We briefly summarize their positions below.
Mallory’s Argument
Relying on Burnham, Mallory first argues that Pennsylvania’s statutes are constitutional under the original interpretation of the due process clause, observing that
[i]n the years before and immediately after the ratification of the Fourteenth Amendment … every State in the Union had a statute requiring out-of-state corporations to consent to personal jurisdiction.[28]
Mallory also cites Pennsylvania Fire, emphasizing that neither International Shoe nor “its progeny undermined that precedent.”[29] Instead, he maintains,
[t]hose cases established an additional basis for jurisdiction over out-of-state defendants: sufficient contacts between the defendant and the State. They expressly declined to address—and therefore never altered the standards governing—when consent to jurisdiction is constitutionally valid.[30]
Finally, Mallory argues that Pennsylvania’s statutes do not impose an unconstitutional condition.
He suggests that “[e]xpanding the doctrine to apply here would … require it to overrule its decisions in Burnham and Pennsylvania Fire,” a dubious proposition under the court’s stare decisis precedents.[31]
Norfolk Southern’s Argument
Norfolk Southern argues that “[a]llowing every state to assert general jurisdiction over every corporation doing business there would gut the protections Goodyear and Daimler recognized.”[32]
To that end, the company argues the court has long since abandoned Pennsylvania Fire’s legal framework.
The company also suggests that “Pennsylvania’s regime independently creates an unconstitutional condition” by
require[ing] corporations to either avoid Pennsylvania, or choose between forfeiting their due-process protections against suit and breaking state law and giving up their right to access the courts.[33]
And as a federally regulated interstate railroad, Norfolk Southern cannot choose to avoid Pennsylvania.[34]
The Solicitor General’s Argument
The solicitor general emphasizes the U.S.’s substantial interest in this case based on the potential implications on the country’s diplomatic relations and foreign trade.[35]
Although the parties are domestic litigants, the solicitor observes that “the theory of [consent-by-registration] jurisdiction … would allow state courts to hear cases against foreign defendants based on foreign conduct.”
She also suggests Mallory is relying on principles that have long been repudiated under the Dormant Commerce Clause.[36]
Oral Argument
After oral argument, the court appears divided on how to resolve both the principle question at issue and the appropriate manner for doing so.
In short, the justices appear unlikely to untangle this Gordian knot into neat threads.
Appearing for Mallory, Ashley Keller grounded his argument under an originalist framework.
But Chief Justice John Roberts, Justice Elena Kagan and Justice Brett Kavanaugh appeared unconvinced, suggesting that the court had already effectively — if not directly — overruled Pennsylvania Fire, or would have to here.
As Justice Kagan put it, consent-by-registration jurisdiction came about of necessity under Pennoyer and International Shoe had obviated any continued need for it.
Justice Samuel Alito expressed concern that adopting Mallory’s position would have implications beyond national and international corporations like Norfolk Southern, effectively forcing small businesses to choose between expanding their operations and consenting to general jurisdiction.
Justice Sonia Sotomayor, Justice Gorsuch and Justice Ketanji Brown Jackson seemed more receptive to Mallory’s view that consent had survived International Shoe as a viable basis for exerting general jurisdiction.
Justice Gorsuch emphasized that corporations do not get special treatment under the due process clause, to which Keller aptly responded that the Constitution does not provide for “a higher grade of person … because they were birthed by filing a piece of paper in Virginia instead of by a mother in a hospital.”
Justice Jackson similarly observed that she saw no difference between Pennsylvania’s statutes and negotiations between private parties, which the court has upheld as forming valid consent to jurisdiction.
Justice Sotomayor made clear that she agreed with Mallory’s due process argument, observing she would not come around from her dissent in Goodyear.
Arguing for Norfolk Southern, Carter Phillips emphasized that Pennsylvania’s statutory scheme stands alone, observing no state filed a brief attempting to defend it.
Several justices seemed open to Norfolk Southern’s unconstitutional conditions argument — specifically, the notion that Pennsylvania’s statutes could not be read to require foreign corporations to willingly consent to general jurisdiction.
Justice Kagan suggested that filing a piece of paper without express consent language was ineffective for that purpose. Justices Alito, Amy Coney Barrett and Kavanaugh similarly appeared hesitant to the notion.
Justice Clarence Thomas also weighed in, though he was more concerned with whether Norfolk Southern had an antecedent right that it was being forced to waive in the first instance.
In response, Phillips emphasized that under Daimler and Goodyear, corporations have the right not to be coerced to appear before a court exercising general jurisdiction anywhere other than their “home.”
Arguing for the U.S. Solicitor General’s Office, Curtis Gannon stressed the significance of the court’s decision here, observing that both a federal statute was at issue by implication and that ruling in Mallory’s favor could disrupt international comity by unleashing a jurisdictional free-for-all.
Implications of the Court’s Decision
It is not hyperbolic to suggest that the court’s ruling could be paradigm shifting.
Every state in the country has a corporate registration statute. If the court upholds Pennsylvania’s — affirming the application of Pennsylvania Fire’s consent-by-registration theory — we will likely see the end of the general or specific personal jurisdiction divide.
As Justice Kavanaugh observed, every state will be free to either interpret existing registration statutes or enact new ones requiring corporate entities to consent to all-purpose jurisdiction in exchange for the privilege of conducting business there.[37]
That would relegate national corporations to being at home everywhere, meaning they could be haled into any court across the country for any act, no matter where it occurred. Specific jurisdiction would no longer serve any function in our increasingly national and global economy.
This would lead to rampant venue and forum shopping. If taken to its conclusion, litigants could see the end of International Shoe and cases applying its minimum-contacts test.
Should the court find for Norfolk Southern — as it appears poised to do and many other courts already have under similar circumstances[38] — it appears likely to either overrule Pennsylvania Fire or hold that it already has.[39]
As the U.S. Court of Appeals for the Second Circuit found in its 2016 decision Brown v. Lockheed Martin Corp., failure to do so would be to undo the last eleven years of the court’s general jurisdiction jurisprudence:
If mere registration and the accompanying appointment of an in-state agent—without an express consent to general jurisdiction—nonetheless sufficed to confer general jurisdiction by implicit consent, every corporation would be subject to general jurisdiction in every state in which it registered, and Daimler’s ruling would be robbed of meaning by a back-door thief.[40]
Similarly, the court could leave Pennsylvania Fire intact, while limiting its reach, by requiring such provisions to include language expressly conditioning assent to general jurisdiction upon registration.[41]
Regardless, if the court adopts this course, we could see the demise of one of the last relics of Pennoyer’s territorial approach to jurisdiction.[42] The court would continue to solidify its position in favor of a narrow view of general jurisdiction for corporate defendants.
Or the court could eschew the personal jurisdiction analysis altogether and strike down Pennsylvania’s statutes under the unconstitutional conditions doctrine.
This appeared to be a tempting option for several of the justices, who were skeptical that the Pennsylvania statutes at issue amounted to effective consent and who also expressed a desire to clarify the doctrine’s application.
Finally, the court could vacate the lower court’s decision under the dormant commerce clause and remand for further proceedings.[43] But neither party briefed this issue. And the lower courts did not consider it.
That said, the court seems unlikely to take this approach given the justices’ questions during oral argument.
Conclusion
Regardless of the outcome, the court will be resolving a deep split and bring unanimity among the states.
Attorneys will be left to finding new ways to expand or contract personal jurisdiction to best serve their clients’ needs.
While we await the court’s decision, we note that the public at large — understandably — knows and cares little about procedural and jurisdictional matters.
Long gone are the days when public figures could rally folks to the voting box based on these largely academic questions of law.[44]
But plaintiffs, their attorneys, and the corporate entities whom they are suing care. As do the justices.
The rest of us should too.
[1] 564 U.S. 915 (2011).
[2] 571 U.S. 117 (2014).
[3] 95 U.S. 714 (1878).
[4] 243 U.S. 93 (1917).
[5] Daimler, 571 U.S. at 139; Goodyear, 564 U.S. at 919.
[6] Ford Motor Co. v. Mont. Eighth Judicial Dist. Ct., 141 S. Ct. 1017, 1024 (2021); Goodyear, 564 U.S. at 919.
[7] Ford, 141 S. Ct. at 1024.
[8] Pennoyer, 95 U.S.at 733–34.
[9] Ford, 141 S. Ct. at 1037 (Gorsuch, J., concurring).
[10] Id.
[11] 243 U.S. at 94.
[12] Cooper Tire & Rubber Co. v. McCall, 863 S.E.2d 81, 85 (Ga. 2021).
[13] 326 U.S. 310 (1945).
[14] Id. at 316, 318.
[15] 433 U.S. 186 (1977).
[16] Id. at 212; see also id. at 202–03 (abandoning “the fiction of implied consent to service on the part of a foreign corporation” in favor of “ascertain[ing] what dealings make it just to subject a foreign corporation to local suit”).
[17] Id at 212.; see also Daimler, 517 U.S. at 138 n.18 (stating that pre-International Shoe cases “were decided in the era dominated by Pennoyer’s territorial thinking [and] should not attract heavy reliance today”).
[18] 495 U.S. 604 (1990).
[19] Id. at 609 (Scalia, J.) (plurality op.); see also Burger King Corp. v. Rudzewicz, 471 U.S> 462, 472 n.14 (1985) (observing that parties may “stipulate in advance to submit their controversies for resolution within a particular jurisdiction).
[20] 564 U.S. at 919.
[21] 571 U.S. at 139.
[22] Id.
[23] Daimler, 571 U.S. at 139 n. 19.
[24] See BNSF Railway Co. v. Tyrell, 137 S. Ct. 1549, 1555, 1559 (2017) (holding that a Montana court lacked general jurisdiction in a suit brought by an out-of-State plaintiff against an out-of-State railroad based on out-of-State injuries, even though the railroad owned more than 2000 miles of track and employed more than 2000 workers in Montana).
[25] 15 Pa. Cons. Stat. Ann. § 411 (2019).
[26] 42 Pa. Const. Stat. Ann. § 5301(a)(2)(i) (2019).
[27] Mallory v. Norfolk S. Ry., 142 S. Ct. 2646 (2022).
[28] Brief of Petitioner at 8, Mallory v. Norfolk Southern Railway Co., U.S. (No. 21-1168).
[29] Id. at 9.
[30] Id.
[31] Id.
[32] Brief of Respondent at 8, Mallory v. Norfolk Southern Railway Co., U.S. (No. 21-1168).
[33] Id.
[34] Id. at 9.
[35] Brief for the United States as Amici Curiae Supporting Respondent, Mallory v. Norfolk Southern Railway Co., U.S. (No. 21-1168) at 1.
[36] Id.; see also Brief for Professor Stephen E. Sachs Supporting Neither Party, Mallory v. Norfolk Southern Railway Co., U.S. (No. 21-1168).
[37] See Am. Dairy Queen Corp. v. W.B. Mason Co., No. 18-CV-693 (SRN/ECW), 2019 WL 1767409, at *2 (D. Minn. Apr. 22, 2019) (holding that consent by registration remains an independent basis for personal jurisdiction, though questioning its continued vitality in light of Daimler and Goodyear); Otsuka Pharm. Co. v. Mylan Inc., 106 F. Supp. 3d 456, 469 (D.N.J. 2015) (“[D]esignation of an in-state agent for service of process in accordance with a state registration statute may constitute consent to personal jurisdiction, if supported by the breadth of the statute’s text or interpretation.”); Acorda Therapeutics, Inc. v. Mylan Pharm. Inc., 78 F. Supp. 3d 572, 588 (D. Del. 2015) (“Daimler does not eliminate consent as a basis for a state to establish general jurisdiction over a corporation which has appointed an agent for service of process sin that state, as is required as part of registering to do business in that state.”); Beach v. Citigroup Alt. Invs. LLC, 2014 WL 904650, at *6 (S.D.N.Y. Mar. 7, 2014) (“Notwithstanding these limitations, a corporation may consent to jurisdiction in New York under [New York’s general jurisdiction statute[ by registering as a foreign corporation and designating a local agent.”); Bailen v. Air & Liquid Sys. Corp., No. 190318/12, 2014 WL 3885949, at *5 (S. Ct. N.Y. Cnty. 2014) (“[A] New York court may exercise general personal jurisdiction over a corporation, regardless of whether it is ‘at home’ in New York, so long as it is registered to do business here . . . and designates a local agent for service of process.”).
[38] See, e.g., Metro. Grp. Prop. & Cas. Ins. Co. v. Electrolux Home Prod., Inc., No. 17CV11865PGSDEA, 2018 WL 2422023, at *2 (D.N.J. May 29, 2018) (“[T]o conclude that a corporation consents to personal jurisdiction based solely on registration would be inconsistent with Daimler[.]”); Howe v. Samsung Electronics Am., Inc., No. 1:16cv386, 2018 WL 2212982, at *5 (N.D. Fla. Jan. 5, 2018) holding that the “requirement to designate a registered agent is not intended to—and in any event under the Due Process Clause could not—subject a corporation to an action over which a state’s courts cannot properly exercise jurisdiction. Were it otherwise, the Supreme Court’s decisions recognizing limits on personal jurisdiction over out-of-state corporations would be nearly meaningless.”); Keeley v. Pfizer Inc., Civ. Act. No. 15-583, 2015 WL 3999488, at *4 (E.D. Mo. July 1, 2015) (“Plaintiffs contend Defendant has consented to jurisdiction in Missouri because Defendant is registered to do business in Missouri. . . This result is contrary to the holding in Daimler that merely doing business in a state is not enough to establish general jurisdiction . . . [F]inding a defendant consents to jurisdiction by registering to do business in a state or maintaining a registered agent does not [satisfy due process].”); Freedman v. Suntrust Banks, Inc., 139 F. Supp.3d 271, 279 (D.D.C. 2015) (corporate registration did not establish that “Defendants are any more ‘at home’ in the District of Columbia than they are ‘at home’ in other states”); Chavez v. Bridgestone Ams. Tire Ops., LLC, 503 P.3d 332, 339 (N. Mex. 2021) (finding “[t]he consent by registration theory of personal jurisdiction . . . is a relic of the now-discarded Pennoyer . . . era of personal jurisdiction jurisprudence”); Lanham v. BNSF Railway Co., 939 N.W.2d 363, 371 (Neb. 2020) (finding that “consent by registration would permit a corporation to be subject to general jurisdiction in every state in which it does business,” which would contravene the limits prescribed in Goodyear and Daimler); Genuine Parts Co. v. Cepec, 137 A.3d 123, 132 (Del. 2016) (finding consent by registration unconstitutional and noting that “two recent U.S. Supreme Court decisions, Goodyear and Daimler, made a major shift in our nation’s personal jurisdiction jurisprudence—a shift that undermines the key foundation upon which prior federal cases like [Neirbo Co. v. Bethlehem Shipbuilding Corp., 308 U.S. 165, 170, 175 (1939)] and Pennsylvania Fire relied.”).
[39] See Cooper Tire, 863 S.E.2d at 90 (upholding consent by registration “[u]nless and until the United States Supreme Court overrules Pennsylvania Fire”).
[40] 814 F.3d 619 (2d Cir. 2016).
[41] Fidrych v. Marriott Int’l, Inc., 952 F.3d 124, 135–36 (4th Cir. 2020) (holding that under Pennsylvania Fire, “obtaining the necessary certification to conduct business in a given state amounts to consent to general jurisdiction in that state only if that condition is explicit in the statute of the state courts have interpreted the statute as imposing that condition,” but “South Carolina law does not make consent to general jurisdiction a consequence of obtaining a certificate of authority to transact business”); Waite v. All Acquisition Corp., 901 F.3d 1307, 1320-21 (11th Cir. 2018) (holding that Florida law did not establish hat registration to do business and appointment of an agent for service of process amounted to consent to general jurisdiction); Gulf Coast Bank & Trust Co. v. Designed Conveyor Sys., L.L.C., 717 F. App’x 394, 397–98 (5th Cir. 2017) (“This case lacks what Pennsylvania Fire had: a clear statement from the state court construing the statute to require consent.”).
[42] See Martinez v. Aero Caribbean, 764 F.3d 1062, 1064 (9th Cir. 2014) (holding that “tag jurisdiction” does not apply to service of process on a corporation’s officer within the forum state so as to create general personal jurisdiction over the corporation).
[43] Brief for Professor Stephen E. Sachs Supporting Neither Party, Mallory v. Norfolk Southern Railway Co., U.S. (No. 21-1168), at 1 (citing U.S. Const. art. I, § 8).
[44] See Chisholm v. Georgia, 2 U.S. 419 (1793); U.S. Const. am. XI.
This article originally appeared on Law360, November 10, 2022.
