On June 27th, in the case of Mallory v. Norfolk Southern Railway Co., the Supreme Court narrowly upheld the constitutionality of Pennsylvania’s corporate registration statute with a five-justice majority. The statute requires out-of-state corporations registering to conduct business in the State to consent to all-purpose (general) personal jurisdiction. The ruling has significant implications for personal jurisdiction doctrine and potentially, as reported by Transnational Litigation Blog, “re-opens the door to suing foreign companies in U.S. courts over disputes that arise in other countries.” Robert Mallory, a Virginia resident who worked for Norfolk Southern, a Virginia-based railroad, filed a lawsuit in Pennsylvania, claiming that he was exposed to asbestos and other toxic chemicals while working for the company, resulting in his diagnosis of colon cancer. Although he lives in Virginia, he relied on the Pennsylvania regulatory requirement. Norfolk Southern has a massive presence in that Commonwealth, operating “more than 2,400 route miles of track and employing more than 4,600 people in Pennsylvania.” As a requirement to do business in Pennsylvania, Norfolk Southern registered with the state, which granted Pennsylvania courts general jurisdiction over the company and other registered out-of-state corporations. Norfolk Southern argued that this statute violated the 14th Amendment’s due process clause because it unfairly gave state courts jurisdiction over out-of-state corporations in all circumstances.
The lower courts agreed with Norfolk Southern, but the Supreme Court reversed their decision on Tuesday in keeping with their 1917 decision in Pennsylvania Fire Insurance Co. of Philadelphia v. Gold Issue Mining & Milling Co., where the Court upheld a similar Missouri law. In his observation, Justice Gorsuch noted agreement regarding the jurisdiction of natural persons in any state where they are located, without encountering any jurisdictional obstacles. He questioned why the Due Process Clause would place a greater burden on lawsuits against corporations compared to lawsuits against individuals. The Court held that “the state law and facts before the Court fall squarely within Pennsylvania Fire’s rule.” The Court went on to point out the errors in the proceedings of the Pennsylvania Supreme Court, stating, “‘If a precedent of this Court has direct application in a case,’ as Pennsylvania Fire does here, a lower court ‘should follow the case which directly controls, leaving this Court the prerogative of overruling its own decisions’” (citing Rodriguez de Quijas v. Shearson/American Express, Inc., 490 U. S. 477, 484). Justice Amy Coney Barrett dissented, joined by Chief Justice John Roberts and Justices Elena Kagan and Brett Kavanaugh. In her dissenting opinion, she holds that the majority opinion may “permit state governments to circumvent constitutional limits” by “requiring a corporation to register to conduct business there (as every State does)” and enacting a law “making registration sufficient for suit on any cause.” She includes in the dissent that in doing this, every company that does business in the State would be subject to “general jurisdiction” based on “implied ‘consent’—not contacts.” Although Justice Alito held the majority opinion, he was not convinced “that the Constitution permits a State to impose such a submission-to-jurisdiction requirement.” He held that Norfolk Southern could presumably renew the challenge under the dormant Commerce Clause not addressed by the Pennsylvania Supreme Court. The Court vacated the lower court’s judgment and remanded for a final decision.