Introduction

In Mallory v. Norfolk Southern Railway Co., a somewhat-splinted United States Supreme Court issued what may be the most significant decision regarding personal jurisdiction in over a generation.[1] While the alignment of the Justices is complex—the actual opinion of the Court is limited to the factual background and a brief section of reasoning, and the bare majority of five cuts across usual ideological divisions—the implications of Mallory, particularly once it starts being applied by lower courts, are profound. Simply put, it may now be possible for states to condition registration of foreign-state corporations on consent to general jurisdiction in that state’s courts, at least for corporations with substantial operations in that state. As discussed further infra, and as explicitly recognized by the four dissenting Justices, Mallory opens the door to completely abandoning distinction between general and specific jurisdiction for corporations.

By way of background, since the Supreme Court decided the seminal case of International Shoe v. Washington in 1945, corporate personal jurisdiction has been widely understood to rely on two bases: general jurisdiction—meaning that a corporation can be sued for any reason in the state or states in which it is considered “at home”—and specific jurisdiction—meaning a corporation can be sued in a state away from its “home” when the circumstances of the lawsuit itself arise from the defendant corporation’s intentional contacts with that forum state.[2] Importantly, under more recent cases like Daimler AG v. Bauman, the Supreme Court has explicitly held a corporation is only “at home” for general jurisdictional purposes in either (1) the state of its incorporation, or (2) the state in which its headquarters is located.[3]

Mallory presents a major shock to this long-held understanding, in that it is now apparently possible for corporations to be subject to general jurisdiction as a condition of registration in states other than the state of incorporation—meaning they may be able to be sued for any reason in any state where they are registered to do business, regardless of any connection of the facts of the case with the corporation’s contacts with the forum.

 

Opinion of the Court and Opinion of Justice Gorsuch

Mallory leads with a plurality opinion authored by Justice Gorsuch and joined in full by Justices Thomas, Sotomayor, and Jackson; Justice Alito joined only limited portions resulting in the opinion of the Court.[4]

These five Justices joined the factual and procedural background. The plaintiff, Robert Mallory, was employed by the defendant, Norfolk Southern Railway Company, as a freight-car mechanic for nearly twenty years, in Ohio and Virginia.[5] After leaving this employment, Mallory briefly lived in Pennsylvania for a period before moving to Virginia.[6] After he developed cancer, Mallory sued Norfolk Southern in Pennsylvania state court under a federal worker’s compensation scheme permitting lawsuits by railroad employees, alleging exposure to asbestos and other chemicals during his employment was the cause of his illness.[7]

Norfolk Southern challenged personal jurisdiction, arguing Mallory was a Virginia resident, the alleged exposures were in Ohio and Virginia, and it was incorporated in Virginia, which was also the location of its headquarters.[8] Opposing the motion, Mallory argued Norfolk Southern has a significant presence in Pennsylvania (it “manages over 2,000 miles of track, operates 11 rail yards, and runs 3 locomotive repair shops” in the state), but more importantly had registered to do business there.[9] Critically, under its foreign corporation registration statute, in order to do business there Pennsylvania requires out-of-state companies to register and agree to appear in its courts on “any cause of action” against them.[10]

Ultimately, the Pennsylvania Supreme Court found this statute to violate the Due Process Clause.[11] In so finding, the court noted the Georgia Supreme Court had recently reached the opposite conclusion on a similar question.[12] The United States Supreme Court granted certiorari in light of this split, on the question of whether “the Due Process Clause of the Fourteenth Amendment prohibits a State from requiring an out-of-state corporation to consent to personal jurisdiction to do business there.”[13] Notably, the Pennsylvania Supreme Court did not address Norfolk Southern’s argument in the alternative that the statute violated the dormant Commerce Clause, review was not granted on that question, and the Court was careful to note it remained for consideration on remand.[14]

Here, Justice Alito declined to continue in the opinion, and Justice Gorsuch thus continued for a plurality of four Justices.[15]

Beginning his analysis, Justice Gorsuch characterized the issue before the Court as “a very old question,” and furthermore one “this Court resolved” in the unanimous 1917 case of Pennsylvania Fire Ins. Co. of Philadelphia v. Gold Issue Mining & Milling Co.[16] The opinion then turned to a discussion of the history of the territorial limits of a state court’s jurisdiction, and the interplay with the proliferation of the corporate form in the late nineteenth century.[17] Notably, Justice Gorsuch explained some states responded by adopting various statutes “requiring out-of-state corporations to consent to in-state suits in exchange for the rights to exploit the local market and to receive the full range of benefits enjoyed by in-state corporations.”[18]

Justice Gorsuch then turned to explaining Pennsylvania Fire itself, which centered on a due process challenge to one of the above-mentioned foreign corporation consent statutes.[19] The case involved an insurance company in Pennsylvania that agreed to insure a facility in Colorado owned by an Arizona corporation.[20] When the insurer refused to pay on a loss, the insured sued in state court in Missouri.[21] Notably, the insurer had complied with a Missouri statute that required out-of-state insurance companies desiring to do business in the state “…file paperwork agreeing to (1) appoint a state official to serve as the company’s agent for service of process, and (2) accept service on that official as valid in any suit.”[22] Writing for a unanimous Court, Justice Holmes found no due process violation, stating, “…there was ‘no doubt’ [the insurer] could be sued in Missouri by an out-of-state plaintiff on an out-of-state contract because it had agreed to accept service of process in Missouri on any suit as a condition of doing business there.”[23]

Here, Justice Alito re-joined the plurality, making the next section of Justice Gorsuch’s opinion the opinion of the Court again.[24] And the resolution was stated directly: “Pennsylvania Fire controls this case.”[25] The Court swiftly explained that by registering to do business in Pennsylvania under a statute that required it to allow Pennsylvania state courts to “exercise general personal jurisdiction” over it, Norfolk Southern had consented to be sued in Pennsylvania in any case.[26] Thus, given Norfolk Southern’s consent, there was no due process violation.[27] The Court also chided the Pennsylvania Supreme Court for determining Pennsylvania Fire had been impliedly overruled by intervening decisions of the Court, stressing, “[i]f a precedent of this Court has direct application in a case, … a lower court should follow the case which directly controls, leaving to this Court the prerogative of overruling its own decisions.”[28]

With this holding stated, Justice Alito again departed, now for the remainder of the plurality opinion.[29] Justice Gorsuch therefore again proceeded on behalf of four Justices, to address—and reject—Norfolk Southern’s argument that Pennsylvania Fire should be overruled.[30]

The crux of Norfolk Southern’s argument was that Pennsylvania Fire’s rationale was seriously undermined by International Shoe Co. v. Washington and its extensive progeny.[31] Justice Gorsuch rejected this argument, and denied there was any tension between Pennsylvania Fire and International Shoe.[32] Rather, in his view, while International Shoe established the now-familiar categories of general jurisdiction and specific jurisdiction, it did not disturb the separate and preexisting doctrine of jurisdiction by consent, as recognized by Pennsylvania Fire. Justice Gorsuch also rejected Norfolk Southern’s argument that it would be fundamentally unfair to subject it to general jurisdiction in Pennsylvania, citing the wide extent of its business operations there, going so far as to include in his opinion images of infographics produced by Norfolk Southern boasting of its Pennsylvania presence.[33]

Finally, after rejecting additional arguments by Norfolk Southern, Justice Gorsuch took care to include a footnote directly acknowledging the multiplicity of opinions generated from the case, but stressing:

[I]t should be apparent a majority of the Court today agrees that: Norfolk Southern consented to suit in Pennsylvania. [Citation.] Pennsylvania Fire therefore controls this case. [Citation.]. Pennsylvania Fire’s rule for consent-based jurisdiction has not been overruled. [Citation.] International Shoe governs where a defendant has not consented to exercise of jurisdiction. [Citation.] Exercising jurisdiction here is hardly unfair. [Citation.] The federalism concerns in our due process cases have applied only when a defendant has not consented. [Citation.] Nor will this Court now overrule Pennsylvania Fire. [Citation.][34]

Every single citation in this footnote is internal, to the separate opinion of Justice Alito.

 

Concurrence of Justice Jackson

While joining Justice Gorsuch’s opinion in full, Justice Jackson issued a brief solo concurring opinion to stress her view that personal jurisdiction is waivable, and thus there was no constitutional offense in requiring Norfolk Southern to agree to such a waiver in order to do business in Pennsylvania.[35]

 

Opinion of Justice Alito

Justice Alito issued a solo opinion concurring in part and concurring in the judgment.[36] In sum, Justice Alito agreed with Justice Gorsuch’s plurality opinion that the case was fundamentally indistinguishable from Pennsylvania Fire, Pennsylvania Fire has not been overruled, and thus there is no due process violation present.[37] Justice Alito also believed it would be incorrect to overrule Pennsylvania Fire, as he did not believe its holding was not “egregiously wrong,” and it would not be unfair to force Norfolk Southern to litigate there given its extensive operations in the state.[38]

Notably, Justice Alito’s opinion is the only opinion issued in this case to address why the plaintiff chose to litigate in Pennsylvania despite the lack of any factual connection to the forum, stating, “…it is hard to see Mallory’s decision to sue in Philadelphia as anything other than the selection of a venue that is reputed to be especially favorable to tort plaintiffs.”[39]

The remainder of Justice Alito’s opinion discusses the dormant Commerce Clause at length, and how he would apply the doctrine to the case, which is beyond the scope of this article.[40]

 

Dissent of Justice Barrett

Justice Barrett issued a dissenting opinion, joined by the Chief Justice, and Justices Kagan and Kavanaugh.[41] In sum, Justice Barrett argued International Shoe and the subsequent seventy-five years of Supreme Court precedent based thereon stand for the proposition that “the Due Process Clause does not allow state courts to assert general jurisdiction over foreign defendants merely because they do business in the State.”[42] Functionally, she argued that decisions of the Court prior to International Shoe—which would include Pennsylvania Fire—are not valid if they do not conform to the general and specific jurisdiction framework.[43] Furthermore, in her view it could not be said that Norfolk Southern consented to jurisdiction in Pennsylvania, as it was essentially compelled.[44]

Justice Barrett also cautioned that the Court’s holding seriously endangered the validity of cases like Daimler AG v. Bauman and Goodyear Dunlop Tires Operations, S. A. v. Brown, which define where a corporation is considered “at home” for general jurisdiction purposes.[45]

 

Implications

The implications of Mallory are vast, limited only by how lower courts interpret the quantum of forum activity necessary to overcome “unfairness,” and potential state law changes in response. As an immediate effect, any business registered to do business in Pennsylvania—and Georgia—can now potentially be sued there for any reason, without any connection whatsoever between the defendant’s forum contacts and the basis of the action. Importantly though, Justice Alito stressed Norfolk Southern’s extensive operations in Pennsylvania vitiated any potential unfairness in forcing it to litigate there, and the vote of Justice Alito was necessary to reach a majority of the Court. Neither the plurality nor Justice Alito, however, indicated what quantum of forum-state activity is necessary to mitigate any such unfairness, and this standard will need to be developed through future litigation. It is possible that a corporation found to have consented to jurisdiction via registration per Mallory could have such minimal forum operations that to hold it subject to general jurisdiction would be regarded as unfair.

Further effects can arise from subsequent changes in state law. As Justice Barrett noted in her dissent, at present the only two states that recognize corporate registration as consent to general jurisdiction are Pennsylvania (by statute), and Georgia (by judicial precedent).[46] Going forward, however, any state legislature so motivated could enact a statute requiring consent to general jurisdiction as a condition of registration. Additionally, state courts could arrive at functionally equivalent judicial constructions. Where state law changes in this direction, there will also be questions of retroactive application of consent to general jurisdiction.

 

Takeaways

At a minimum, corporations considering registration to do business in states other than their states of incorporation and headquarters should carefully weigh the benefits of doing so against the potential for subjecting themselves to general jurisdiction.

An additional potential question to consider is state constitutional law. While the Court has now apparently found no due process violation in consent to general jurisdiction via foreign corporation registration, it is conceivable that a state supreme court could find the Due Process Clause in its own constitution to limit personal jurisdiction in the fashion argued by Justice Barrett in her dissent. Conceptually, this argument may be stronger in states with current constitutions enacted post-International Shoe.

 

 

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[1] Mallory v. Norfolk S. Ry. Co., No. 21-1168, 600 U.S. ___, ___ S.Ct. ___, 2023 WL 4187749, at *2 (June 27, 2023) (All pinpoint citations herein to Westlaw star pagination).

[2] See generally Int’l Shoe Co. v. Washington, 326 U.S. 310 (1945).

[3] See generally Daimler AG v. Bauman, 571 U.S. 117 (2014).

[4] Id. at *2.

[5] Id. at *3.

[6] Id.

[7] Id.

[8] Id.

[9] Id.

[10] Id., citing 42 Pa. Cons. Stat. § 5301(a)(2)(i), (b) (2019).

[11] Id., citing Mallory v. Norfolk S. Ry. Co., 266 A.3d 542, 564–68 (Pa. 2021).

[12] Id., citing Cooper Tire & Rubber Co. v. McCall, 863 S.E.2d 81 (2021).

[13] Id.

[14] Id.

[15] Id. at *2.

[16] Id. at *4, citing Pennsylvania Fire Ins. Co. of Phila. v. Gold Issue Min. & Milling Co., 243 U.S. 93 (1917).

[17] Id.

[18] Id. at *5.

[19] Id.

[20] Id., citing Gold Issue Min. & Milling Co. v. Pennsylvania Fire Ins. Co. of Phila., 184 S.W. 999, 1001 (Mo. 1916).

[21] Id.

[22] Id.

[23] Id.at *6.

[24] Id. at *2.

[25] Id.

[26] Id. at 7.

[27] Id.

[28] Id., quoting Rodriguez de Quijas v. Shearson/American Express, Inc., 490 U.S. 477, 484 (1989) (internal quotation marks omitted).

[29] Id. at *2.

[30] Id. at *8.

[31] Id. at 8, citing Int’l Shoe Co. v. Washington, 326 U.S. 310 (1945).

[32] Id. at *8–10 .

[33] Id. at *10.

[34] Id. at *12, n. 11.

[35] Id. at 12–13.

[36] Id. at *14–20.

[37] Id. at *15–16.

[38] Id. at *15.

[39] Id. at *16, citing U. S. Chamber of Commerce Institute for Legal Reform, Nuclear Verdicts: Trends, Causes, and Solutions 20 (2022); see also Tyson, Robert, Nuclear Verdicts: Defending Justice for All (2020).

[40] Id. at *16–19.

[41] Id. at *20–28.

[42] Id. at *20.

[43] Id. at *25–26.

[44] Id. at *22.

[45] Id. at *28, citing Daimler AG v. Bauman, 571 U.S. 117 (2014) and Goodyear Dunlop Tires Operations, S. A. v. Brown, 564 U.S. 915 (2011).

[46] Id. at *24.