Did we agree to be sued here? An update on the most recent U.S. Supreme Court decision on personal jurisdiction in Mallory v. Norfolk Southern Railroad Company. | Snell and Wilmer

It is known that each state has certain requirements that companies doing business in the state must register to do so. However, under the most recent U.S. Supreme Court decision addressing personal jurisdiction, merely doing so may constitute a company agreeing to file a lawsuit in that state for any reason, regardless of whether the case involves a citizen of that state or whether any The actions at issue in the case occurred in that case.

And on June 27, 2023, the US Supreme Court issued a decision in Mallory v. Norfolk Southern Railroad Company, 600 U.S. ___ (2023), its most recent decision on personal jurisdiction. Most challenges to personal jurisdiction over a corporation address either general jurisdiction—which typically exists only in the state in which the corporation is incorporated or headquartered and allows it to be sued on any cause of action—or specific jurisdiction—which addresses whether or not the corporation is a corporation. Has sufficient activities within the particular state to form a link between the company’s activities within the state and the conduct at issue in the lawsuit. The specific jurisdiction also typically includes an in-state plaintiff claiming injury or damages that occurred in the state.

the Mallory However, the decision depends on a different kind of jurisdiction – the company’s agreement to state jurisdiction for any cause of action brought there by registering to do business in the state. The Supreme Court posed the question to be decided as “whether the Due Process Clause of the Fourteenth Amendment prohibits a state from requiring an out-of-state corporation to consent to personal jurisdiction to do business there.” The Supreme Court held that Norfolk Southern’s registration to do business in Pennsylvania under that state’s business laws gave it personal jurisdiction and did not violate the Due Process Clause of the Fourteenth Amendment.

The core case involves a former Norfolk Southern employee who worked for the company in Ohio and Virginia for 20 years. He filed a lawsuit alleging he was exposed to asbestos while working at Norfolk Southern and developed cancer as a result. After leaving Norfolk Southern, he moved to Pennsylvania and later to Virginia, where he was residing at the time, and sued. But Mr. Mallory did not sue in Virginia, where the courts would indisputably have general jurisdiction over Norfolk Southern because it was incorporated and headquartered in Virginia. Instead, he sued Norfolk Southern in Pennsylvania and the company challenged personal jurisdiction over it in Pennsylvania. The Pennsylvania Supreme Court found that there was no personal jurisdiction over Norfolk Southern, but the US Supreme Court overturned the state court’s ruling and reconsidered the case.

The Supreme Court found that the 1917 Supreme Court decision in Pennsylvania Fire v. Gold Issue Mining & Milling Co. was decisive. the Pennsylvania fire The opinion held that a Pennsylvania fire could be sued in Missouri even when neither Missouri was the home state of the plaintiff nor the defendant, and Colorado was the place where the contract in question was formed and where the primary fire occurred. In other words, there was no Missouri citizen involved in the case and there was no conduct on the part of the defendant in Missouri relating to the case whatsoever. the Pennsylvania fire The decision held personal jurisdiction to be related because Missouri law required any out-of-state insurer to agree to appoint a government official as agent to service the process and to “accept the service rendered to that official as valid in any claim.”

Reliance on Pennsylvania fire As a precedent, Mallory’s decision also found jurisdiction over Norfolk Southern in Pennsylvania because Pennsylvania law requires that an out-of-state corporation must register to do business in order to do business in the state and expressly requires that qualification to do business in the state. Doing business in Pennsylvania by companies outside the state allows Pennsylvania courts to exercise general jurisdiction over them. More importantly, the Supreme Court decided the jurisdiction of the “consent” in question Pennsylvania fire And Mallory From analyzing communications for a specific jurisdiction established in international boot The case, and cases that followed, found that they were parallel rather than opposing ways of establishing personal jurisdiction and “sitting comfortably side by side”. The Supreme Court also noted that there was nothing particularly unusual for a corporation to be asked to consent to the jurisdiction of the courts in a state in return for the privilege of doing business there, noting consent to jurisdiction in other contexts such as through contractual forum selection clauses.

the Mallory The opinion categorically does not hold that registering to do business always implies the company’s agreement to jurisdiction. Instead, the opinion states that the court was not speculating whether a state other than the legal schema of Pennsylvania and a different set of facts would be sufficient to establish consent to personal jurisdiction. Thus, it remains to be seen how state and federal courts across the country apply the decision to different laws and facts. However, Mallory The decision is sure to provide plaintiffs with the opportunity to try to obtain jurisdiction over the companies in jurisdictions that they believe are favorable. Thus, to be prepared to defend themselves against such lawsuits, it will be important for companies to clearly understand the legal scheme in any country in which they are registered to do business.