Mallory v. Norfolk Southern Railway Company And The Potential Rise Of Consent-Based Jurisdiction

• Published date: 02 May 2023
• Subject Matter: Corporate/Commercial Law, Litigation, Mediation & Arbitration, Transport, Corporate and Company Law, Rail, Road & Cycling, Trials & Appeals & Compensation
• Law Firm: León Cosgrove Jiménez, LLP
• Author: Mr David H. Prieto

A case before the Supreme Court could drastically change the exposure of corporations to suits in inconvenient forums. Mallory v. Norfolk Southern Railway Company concerns certain Pennsylvanian statutes requiring business entities to submit to general jurisdiction when registering to do business in the state.¹ While Pennsylvania is the only state with such a statutory scheme, with Supreme Court approval, similar legislation will likely be proposed in other states.²

The central issue in Mallory is whether the relevant Pennsylvania statutes run afoul of the 14th Amendment Due Process Clause.³ On the case's path up to the Supreme Court, the trial court and the Supreme Court of Pennsylvania answered this question in the affirmative.⁴

Originally, individuals were only subject to jurisdiction where they resided, and corporate entities were only subject to jurisdiction where they were incorporated.⁵ Individuals were (and still are) also subject to jurisdiction when they are served within the forum state.⁶

This changed with International Shoe Co. v. Washington, where the Court moved away from its previous approach to personal jurisdiction.⁷ The Court in International Shoe found that persons, both actual and legal, may be subject to jurisdiction outside of their home state when they had minimum contacts with the forum state and such contacts were related to the cause of action.⁸ This would come to be known as "specific jurisdiction." International Shoe further held that the Due Process Clause requires a finding of jurisdiction over a defendant to "not offend traditional notions of fair play and substantial justice[,]" so that defendants are not subject to jurisdiction in forums to which they have little relation.⁹ International Shoe also posited that a corporation would be subject to personal jurisdiction in places where it had "continuous and systematic" contacts regardless of whether its contacts related to the cause of action.¹⁰ This form of jurisdiction is now known as "general jurisdiction."

Later case law from the Supreme Court, however, narrowed the "continuous and systematic" avenue for establishing personal jurisdiction.¹¹ Now, personal jurisdiction may only be established where a corporation is incorporated, where its principal place of business is located, where it is essentially "at home", or where the cause of action arose out of the corporations contact with the forum state.¹² Upholding the Pennsylvania law would, therefore, be a marked departure...