Mallory v. Norfolk Southern Railway Co.: Supreme Court Recognizes Existence Of Consent-Based Theory Of General Personal Jurisdiction

• Published date: 04 August 2023
• Subject Matter: Finance and Banking, Litigation, Mediation & Arbitration, Financial Services, Trials & Appeals & Compensation
• Law Firm: Katten Muchin Rosenman LLP
• Author: Mr David L. Goldberg, J Matthew W. Haws, Christian Kemnitz, Casey McClaren and Peter G. Wilson

The US Supreme Court recently issued a decision in Mallory v. Norfolk Southern Railway Co¹ holding that a Pennsylvania statute requiring corporations to "consent" to suit in Pennsylvania courts in order to register to do business in Pennsylvania does not violate the Due Process Clause of the US Constitution. Writing for a fractured 5-4 majority, Justice Neil Gorsuch's opinion acknowledged a consent-based theory of general personal jurisdiction that threatens to limit jurisdiction-based defenses for corporate federal defendants.

For nearly a full decade prior to the Court's decision in Mallory, federal courts have typically followed the Court's 2014 guidance in Daimler AG v. Bauman, and found that they could only exercise general personal jurisdiction over out-of-state corporate defendants that had their principal place of business or incorporation in the forum state.² Mallory significantly limits the utility of Daimler for corporate defendants and has the potential to complicate future challenges to personal jurisdiction significantly, particularly if other states adopt similar registration regimes.

Background

Robert Mallory sued his former employer, Norfolk Southern Railway Co. (Norfolk), in Pennsylvania state court for alleged workplace injuries despite the fact that Mallory resided in Virginia and the injuries occurred in Ohio and Virginia. Mallory argued that by virtue of its registration to do business in Pennsylvania, Norfolk consented to Pennsylvania's exercise of personal jurisdiction. In that regard, Pennsylvania law requires out-of-state companies that register to do business in Pennsylvania to agree to appear in its courts on "any cause of action" against them.³ Norfolk argued that the Pennsylvania court could not exercise personal jurisdiction over it because doing so would violate the Due Process Clause of the Fourteenth Amendment to the Constitution.

The Pennsylvania Supreme Court agreed with Norfolk and invalidated the Pennsylvania law on the basis that it violates the Due Process Clause of the Constitution. The US Supreme Court vacated and remanded the decision.

The Supreme Court majority clarified the existence of a consent-based theory of personal jurisdiction

The Supreme Court held that the Pennsylvania statute requiring out-of-state companies to consent to suit in Pennsylvania courts in order to do business in Pennsylvania does not violate the Due Process Clause. Moreover, it held that such "consent" broadly confers personal...