The U.S. Supreme Court Agrees to Hear Case Regarding Whether State Business Registration Requirements Can Create General Personal Jurisdiction

The U.S. Supreme Court has agreed to consider whether the Due Process Clause of the Fourteenth Amendment prohibits a state from requiring a corporation to consent to personal jurisdiction as a condition to doing business in the state. Mallory v. Norfolk S. Ry. Co., U.S. Supreme Court, No. 21-1168, granted.

The plaintiff is a Virginia resident who sued the railroad, a Virginia company, in Pennsylvania state court for harm he allegedly suffered due to exposure to carcinogens while working in Ohio and Virginia. Pennsylvania has a statutory scheme, “consent-by-registration,” that requires foreign corporations to register to do business in the state, which also operates as consent to general personal jurisdiction. The plaintiff argued that Pennsylvania courts had general personal jurisdiction over the foreign corporation because it had registered to do business in the state.

The Pennsylvania Supreme Court disagreed, unanimously affirming the trial court’s holding and finding Pennsylvania’s statutory scheme unconstitutional to the extent it imposed jurisdiction on foreign corporations solely because they had registered to do business in Pennsylvania. The Court  held that a foreign corporation’s compliance with Pennsylvania’s mandatory registration statute did not operate as voluntary consent to Pennsylvania courts’ exercise of general personal jurisdiction.

In rendering its decision, the Pennsylvania Supreme Court considered the U.S. Supreme Court’s “recent directives,” including the High Court’s decisions in Daimler AG v. Bauman, 571 U.S. 117, 134 S.Ct. 746, 187 L.Ed.2d 624 (2014) and Goodyear Dunlop Tires Operations, S.A. v. Brown, 564 U.S. 915, 131 S.Ct. 2846, 180 L.Ed.2d 796 (2011).

The plaintiff petitioned the U.S. Supreme Court for review, arguing that a split existed amongst several state high courts regarding whether statutory schemes like Pennsylvania’s were constitutional.

The U.S. Supreme Court’s decision in Mallory could have a significant impact on where corporate defendants can be sued and forced to defend significant cases, including putative class actions. The case is scheduled for argument during the Court’s October 2022-2023 term.