The issue presented: Whether the Supreme Court’s upcoming decision in Mallory v. Norfolk S. Ry. Co. could create “open season” on forum shopping by eroding historical requirements for asserting personal jurisdiction over corporate defendants.
Personal jurisdiction is the power of the court over the person or the property of the defendant. Due process requires that a court have an adequate basis for personal jurisdiction over the defendant in a case. In International Shoe Co. v. State of Wash., Office of Unemployment Compensation and Placement, the court distinguished between two types of situations where a court can exercise personal jurisdiction over a defendant: 1) situations where there is a substantial nexus between the plaintiff’s claims and the defendant’s forum-based activities so that the defendant should reasonably anticipate being haled into court in that forum, and 2) situations where a foreign corporation’s “continuous corporate operations within a state [are] 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.” 326 U.S., at 318, 66 S. Ct. 154.
The former is known as specific personal jurisdiction, and the latter is called general personal jurisdiction. Specific jurisdiction is easily exercisable. For example, suppose a defendant, individual, or corporation causes injury to a plaintiff in a state due to the defendant’s activities within that state. In that case, it is understandable that the defendant can be sued there concerning those activities. The analysis for general jurisdiction, on the other hand, is more nuanced.
In two leading cases on this issue, Goodyear Dunlop Tires Operations, S.A. v. Brown, 564 U.S. 915, 131 S. Ct. 2846, 180 L. Ed. 2d 796 (2011), and subsequently Daimler AG v. Bauman, 571 U.S. 117, 134 S. Ct. 746, 187 L. Ed. 2d 624 (2014), the Supreme Court elaborated on the test set forth in International Shoe. Under those cases, general jurisdiction is not case-linked. Rather, a state court may exercise general jurisdiction when a defendant is “essentially at home” in the State. As its name implies, general jurisdiction extends to “any and all claims” brought against a defendant. Those claims need not relate to the forum state or the defendant’s activity there; they may concern events and conduct anywhere in the world. For individuals, even if the cause of action did not arise from the defendant’s activities within the forum state, a court can exercise general jurisdiction if the individual is domiciled in that State. For corporations, the appropriate forums are the corporation’s place of incorporation and principal place of business.
The landscape surrounding personal jurisdiction is evolving, and courts are confronted with alternate general jurisdiction arguments, such as whether registration under a state’s corporate registration statute confers general jurisdiction. An example of such confrontation is illustrated in Mallory v. Norfolk S. Ry. Co., 266 A.3d 542 (Pa. 2021), cert. granted, 212 L. Ed. 2d 605, 142 S. Ct. 2646 (2022)
In Mallory, Robert Mallory, a Virginia resident, sued Norfolk Southern Railway Co., which is incorporated and headquartered in Virginia, for injuries alleged to have occurred during Mallory’s employment with Norfolk Southern in Ohio and Virginia. Specifically, Mallory claims he developed colon cancer as a result of exposure to harmful carcinogens working for Norfolk Southern between 1988 and 2005. Despite the absence of a connection to the State of Pennsylvania, Mallory filed suit in Pennsylvania under Pa. Cons. Stat. §5301 stating that a foreign corporation registered to do business in Pennsylvania consents to general jurisdiction for any cause of action. Norfolk Southern objected, arguing that the court lacked personal jurisdiction over the foreign defendant. The Pennsylvania courts agreed, holding that the statute “violates due process” because it grants general jurisdiction over foreign corporations, despite any affiliation within the State that are “so continuous and systematic as to render the foreign corporation essentially at home in Pennsylvania” 266 A.3d 542 (Pa. 2021). The court further reasoned that compliance with Pennsylvania’s mandatory registration requirement does not constitute voluntary consent to general personal jurisdiction. Id.
Mallory appealed to the United States Supreme Court, arguing that Pennsylvania’s registration statute is not coercive, and thus Norfolk Southern validly consented to personal jurisdiction in Pennsylvania simply by registering to do business in the state. Mallory further argues that conditioning the right to conduct business within Pennsylvania on consent to jurisdiction is not coercive because Norfolk Southern “wields immense commercial power” and “can withstand the economic loss of the Pennsylvania market.” However, Norfolk Southern maintains that Pennsylvania’s registration statute is coercive and, thus, could not have consented to personal jurisdiction in the state.
A state enforcing personal jurisdiction through its registration statute opens the door to plaintiff forum shopping and creates undue burdens for businesses of all sizes. Moreover, suppose the Supreme Court overturns the lower courts’ rulings in Mallory and upholds Pennsylvania’s jurisdiction consent statute as constitutional. In that case, any corporate defendant registered to do business in any state with a statute implying consent to personal jurisdiction through registration will be subject to suit for any injury, no matter where it occurred.
This case has far-reaching implications, evidenced by the sheer amount of amicus briefs to the Supreme Court on the issue. The potential for a complete free-for-all on civil lawsuit forum shopping is a real possibility. If Pennsylvania’s Cons. Stat. §5301 is held to be constitutional, plaintiffs’ counsel around the country will no longer be constrained by the holdings of Goodyear and Daimler when determining where the suit may be brought. Instead, they will be able to bring a claim in jurisdictions with laws, rules, regulations, and fault allocations most favorable to their client, regardless of that forum’s actual relation to the case’s underlying facts. This ruling could further erode confidence in the current court’s regard for stare decisis and make the future landscape of Constitutional law even more uncertain.
However, should the court uphold Pennsylvania’s “registration jurisdiction” statute, a defendant still has procedural tools to achieve dismissal of the case. For example, forum non conveniens prohibits a state from exercising jurisdiction when there is a more appropriate and available forum to the plaintiff. Additionally, a defendant may file a motion to transfer the venue or a motion to remove the case to federal court. Further, depending on the case’s specific facts, the statute as applied may violate the Dormant Commerce Clause if the statute is found to unduly burden interstate commerce. Despite these alternative avenues to attempt to defeat the imposition of liberal general jurisdiction, if the Supreme Court were to reverse Mallory, it will be “open season” on corporate defendants in any and all forums in which plaintiffs’ counsel choose to bring their suit.