Mallory v. Norfolk Southern Railway Co.:
What the Supreme Court’s Latest Decision Means for Corporations with Interstate Operations
By: Lauren Culver
In Mallory v. Norfolk Southern Railway Co.,1 a 5-4 decision, the U.S. Supreme Court held a Pennsylvania law requiring certain out-of-state corporations to submit to general personal jurisdiction in the state’s courts, did not violate the Due Process Clause of the Fourteenth Amendment. In so holding, the majority upheld “tag jurisdiction” against corporations in any state where those corporations are registered to do business and where the state statutes have similar consent requirements.
Virginian Robert Mallory sued his former employer, Norfolk Southern, alleging he was exposed to cancer-causing chemicals while he was working in Virginia and Ohio. Mallory filed suit in Pennsylvania on the theory the railroad’s registration to do business in Pennsylvania gave that state’s courts personal jurisdiction over the railroad. The Pennsylvania Supreme Court dismissed the case in 2021, reasoning the state’s long-arm statute, which gave its courts general jurisdiction over any out-of-state railway or insurance company registered to do business there, violated due process.2 That same year, the Georgia Supreme Court reached the opposite conclusion in Cooper Tire & Rubber Co. v. McCall,3 holding a corporation is subject to general jurisdiction if it is registered and authorized to do business in Georgia and that the requirements of the Georgia Long Arm statute do not apply to out of state corporations that are registered to do business in Georgia.4
In light of the split authority between Georgia and Pennsylvania, the United States Supreme Court granted certiorari to decide whether the Due Process Clause of the Fourteenth Amendment prohibits a state from requiring an out-of-state corporation to consent to personal jurisdiction in order to do business there. Justice Gorsuch, writing for the majority, concluded this question was resolved in Pennsylvania Fire Ins. Co. of Philadelphia v. Gold Issue Mining & Milling Co.,5 where the Supreme Court unanimously held laws like Pennsylvania’s long-arm statute are consistent with the Due Process Clause. The majority noted the Pennsylvania statute is clear that “qualification as a foreign corporation” shall permit state courts to “exercise general personal jurisdiction” over a registered foreign corporation, just as they can over domestic corporations. This “consent by registration” effectively allows an out-of-state company to be subjected to the state’s jurisdiction regardless of how much business the company actually does in the state.
The court rejected Norfolk Southern’s argument that International Shoe Co. v. Washington,6 which established the “minimum contacts” test for determining whether a court has personal jurisdiction over a defendant, undermined Pennsylvania Fire. The Mallory majority reasoned International Shoe addressed personal jurisdiction of a company that had not consented to in-state lawsuits, and therefore was consistent with Pennsylvania Fire’s analysis of a situation where there was corporate consent to general personal jurisdiction. The majority pointed out that Norfolk Southern had extensive contacts with Pennsylvania and complied with Pennsylvania’s registration requirements for decades. According to the majority, Norfolk Southern’s registration in Pennsylvania gave the company the benefits and burdens shared by domestic corporations, including amenability to suit in state court on any claim.
Justice Alito wrote separately, concurring in part and concurring in the judgment. While he agreed Pennsylvania’s long-arm statute did not violate the Due Process Clause, he was not convinced the U.S. Constitution allowed states to impose consent-by-registration laws. Justice Alito noted the Pennsylvania Supreme Court had not addressed Norfolk Southern’s argument that the long-arm statute violated the Constitution’s dormant Commerce Clause, and Norfolk Southern could press the Pennsylvania Supreme Court to rule on that issue on remand.
The dissenting Justices read the court’s precedent differently, finding International Shoe established the Due Process Clause does not allow state courts to assert general jurisdiction over foreign defendants simply because they do business in the state. According to the dissent, state laws compelling corporations to consent to personal jurisdiction should not be allowed to circumvent the settled rule established in International Shoe. The minority expressed its disapproval of states manufacturing “consent” to personal jurisdiction through such laws.
After Mallory, corporations could find themselves in unexpected forums based on their business registrations. This decision could set off a flurry of forum shopping, but, as Justice Alito’s concurrence shows, the due process analysis is not the final word on the matter. The judicial decisions following the Supreme Court’s remand will determine whether general personal jurisdiction over corporations is as broad as the Mallory majority opinion seems to suggest.
1 2023 WL 4187749 (U.S. June 27, 2023).
2 Mallory v. Norfolk S. Ry. Co., 266 A.3d 542, 546 (Pa. 2021).
3 312 Ga. 422, 437 (2021).
4 Id.
5 243 U.S. 93 (1917).
6 326 U.S. 310 (1945).
Attorney Contact Info
Lauren Culver
lauren.culver@swiftcurrie.com
404.888.6102