By Shirley Castillo, Legal Intern
In its recent decision, Mallory v. Norfolk Southern Railway Co., 600 U.S. (2023), the United States Supreme Court held that a Pennsylvania law requiring an out-of-state corporation to consent to general jurisdiction in that state as a condition of registering to do business there did not violate the Fourteenth Amendment’s Due Process Clause. This opens the door to companies being sued in states where they are registered to do business, regardless of the degree of business conducted in-state.
In Mallory, the plaintiff, a Virginia resident, alleged he suffered injuries while working for Norfolk Southern Railway Co., a Virginia corporation, in Virginia and Ohio. Plaintiff filed his lawsuit in Pennsylvania, asserting that Pennsylvania courts had general personal jurisdiction over Norfolk Southern Railway Co., based on a Pennsylvania statute requiring out-of-state corporations to consent to general jurisdiction as a precursor to doing business in the state. Norfolk Southern Railway Co. argued that upholding this provision and finding personal jurisdiction in this case would infringe on the corporations’ Due Process rights.
The Pennsylvania Supreme Court agreed with Norfolk Southern Railway Co., holding that requiring an out-of-state company to be sued in Pennsylvania solely because it was registered to conduct business there was a violation of the Due Process Clause.
In a 5-4 split, the United States Supreme Court reversed the Pennsylvania Supreme Court and upheld the validity of the statute, permitting states like Pennsylvania to assert general personal jurisdiction over out-of-state, registered companies, regardless of how much business the company conducts in the state. A majority of Justices agreed that consent remains an independently sufficient ground for exercising general personal jurisdiction. This decision treats out-of-state corporations that are registered to conduct business in Pennsylvania the same as companies that are incorporated or domiciled in the state.
This decision expands civil liability in state court for corporations registered to do business in Pennsylvania, regardless of how much business the company may or may not perform in that state. Even outside of Pennsylvania, Mallory could increase out-of-state corporations’ exposure to jurisdiction in unexpected places, as this decision may encourage other states to adopt similar “registration by consent laws.”
Please contact an NFC team member if you have any questions or seek further assistance.
