Where are corporations subject to general jurisdiction? The answer to that question matters a lot: if a corporation is subject to general jurisdiction in a state, anyone can sue it there on any claim. Traditionally, though, corporations have been subject to general jurisdiction in only two states: where they are incorporated and where they maintain their principal place of business.
The Supreme Court might now be poised to expand that list. On April 25, the Court granted certiorari in Mallory v. Norfolk Southern Railway Co., a case that asks whether states can require corporations to consent to personal jurisdiction as a condition of registering to do business in a state. If the Court says “yes,” that decision may pave the way to a new era of forum-shopping.
Robert Mallory believes that he developed colon cancer after being exposed to toxic chemicals through his work for Norfolk Southern Railway. So he sued the railway in state court.
But Mallory filed that suit in Pennsylvania—a state that has no connection to the parties’ dispute. Mallory (a Virginia resident) is suing Norfolk Southern Railway (a Virginia corporation) for injuries he allegedly suffered while working in Ohio and Virginia. But Mallory argued that Pennsylvania courts could hear his suit because a foreign corporation that registers to do business in Pennsylvania, by statute, automatically consents to general personal jurisdiction in the Commonwealth’s courts.
The Pennsylvania Supreme Court disagreed. In a unanimous decision issued last December, the court struck down Pennsylvania’s consent-by-registration statute as unconstitutional. The court concluded that “conditioning the privilege of doing business” in a state on a foreign corporation’s “submission . . . to general jurisdiction” in that state’s courts “strips [the] foreign corporation of due process safeguards guaranteed” by the U.S. Supreme Court’s most recent pronouncements on general jurisdiction in Goodyear (2011) and Daimler (2014).
The Pennsylvania Supreme Court’s decision in Mallory put it squarely in the majority. Of the state high courts to consider the same issue in recent years, only the Georgia Supreme Court upheld a consent-by-registration scheme against a due process challenge.
The U.S. Supreme Court’s certiorari grant, however, suggests that at least some of the Justices want to revisit the principles on which those state-court decisions relied. Just last Term, Justice Gorsuch lamented in Ford that, “[n]early 80 years removed from International Shoe, it seems corporations continue to receive special jurisdictional protections.” Seizing on that passage in the opening line of his petition, Mallory urged the Court to recognize that, just as corporations can require customers through contract to litigate disputes in particular forums, states should be able to require corporations who want to do business in a state to consent to the jurisdiction of its courts.
How the Court comes out in Mallory could have a significant impact on corporate litigation strategy in the United States. If the Court upholds Pennsylvania’s consent-by-registration statute, and other states follow suit, corporations may quickly find themselves subject to general jurisdiction in any state where they register to do business. And if that happens, plaintiffs will have far greater flexibility to shop around the United States for a friendly forum. So stay tuned.