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If Mallory v. Norfolk Southern Railway Co., slip op. (June 27, 2023), were a prescription medical product case, it would probably qualify as the worst judicial decision since the Blog was created – due to its potential scope.  Since it’s not, Wyeth v. Levine, 555 U.S. 555 (2009), retains that title.  But because it does not arise from what we do, Mallory is in certain ways worse.  Not only does it give free reign to all litigation tourism in Pennsylvania, but it opens the door to any other state potentially to do the same thing.

Unfortunately, it may be that litigation tourists in Mallory were rescued more by current events than by century-old Supreme Court precedent.  Here’s how the Mallory opinion opened:

Imagine a lawsuit based on recent events.  A few months ago, a Norfolk Southern train derailed in Ohio near the Pennsylvania border.  Its cargo?  Hazardous chemicals.  Some poured into a nearby creek; some burst into flames.  In the aftermath, many residents reported unusual symptoms.

Slip op. at 1.  Equating the corporate defendant with an individual “conductor,” Mallory declares that the “process server” for an Ohio plaintiff could go after both equally in Pennsylvania.  Id. at 2 (claiming the appellant was seeking a “more favorable rule”).  Talk about false equivalence – there’s no mention in that discussion that it advocates subjecting the appellant to suit in dozens of (if not all fifty) states, whereas an individual can only be sued in one, where s/he “may be found”  Id. at 5 (citation to decision from 1811 omitted).

While the current Supreme Court may accurately be described as “conservative” (at least in a left-right sense) in no sense can it any longer correctly be viewed as “pro-business.”

Most of the Mallory decision is 4-1-4.  A “red-brown coalition,” composed of the two ideologically leftmost (Jackson and Sotomayor) and two arguably rightmost (Thomas and Gorsuch) justices supports giving a green light to continued litigation tourism.  Justice Alito was somewhat uncomfortably in the middle (more about that later).  The middle four justices ideologically – from Kagan on the left to Barrett on the right – dissented.

However, Justice Alito joined part III(B), declaring that the pre-International Shoe decision, Pennsylvania Fire Insurance Co. of Philadelphia v. Gold Issue Mining & Milling Co., 243 U. S. 93 (1917) (“Pennsylvania Fire”), controls in Mallory, and thus allows states to mandate general jurisdiction by “consent” on factual grounds that could not otherwise constitutionally support general jurisdiction.

Part II of the lead Mallory opinion, not commanding a majority: (1) discusses mostly jurisdictional law from the 1800s, slip op. at 4-7; (2) engages in the aforementioned false equivalence between uni-jurisdictional individual “tag jurisdiction” and the pan-jurisdictional corporate general jurisdiction it supports, id. at 5-7 (citing one 20th Century case), and (3) ignoring International Shoe Co. v. Washington, 326 U. S. 310 (1945), altogether.

Part III(A) of the lead opinion, also not commanding a majority, discusses Pennsylvania Fire at length, in particular the forum-shopping that the Supreme Court ultimately allowed:

[Plaintiff] sued.  But it did not sue where the contract was formed (Colorado), or in its home State (Arizona), or even in the insurer’s home State (Pennsylvania).  Instead, [plaintiff] brought its claim in a Missouri state court.

Mallory, slip op. at 8 (citation omitted) (discussing facts of Pennsylvania Fire).  Not surprisingly the defendant insurer “objected to this choice of forum.”  Id.  Plaintiff won based on a state corporate registration statute described as creating personal jurisdiction over “any suit.”  Id.  The Supreme Court affirmed, finding “no doubt” that a corporation that “agreed to accept service . . . on any suit” including those “by an out-of-state plaintiff on an out-of-state contract.”  Id. at 9.  Pennsylvania Fire adopted “the principle that due process allows a corporation to be sued on any claim in a State where it has appointed an agent to receive whatever suits may come.”  Id. at 10.

Part III(B), joined by Justice Alito to make a five-justice majority, declares that “Pennsylvania Fire controls this case.”  Mallory, slip op. at 10.  Indeed, factually, Pennsylvania Fire is not much different, except in volume, than 21st Century mass tort forum shopping – the primary reason we at the Blog have been interested in the entire personal jurisdiction issue for over a decade.  Pennsylvania, currently uniquely among the 50 states, has a Long Arm Statute expressly mandating that foreign corporations submit to “general personal jurisdiction” in order to do business in Pennsylvania.  Id. at 11.

Reviewing the record, the majority concluded that “[a]ll told,” the appellant “agreed to be found in Pennsylvania and answer any suit there for more than 20 years.”  Id.  The Court therefore held that this “compl[iance] with this law for many years,” without any objection, was decisive:

Pennsylvania Fire held that suits premised on these grounds do not deny a defendant due process of law.  Even [appellant] does not seriously dispute that much.  It concedes that it registered to do business in Pennsylvania, that it established an office there to receive service of process, and that in doing so it understood it would be amenable to suit on any claim.

Id.  Under Pennsylvania Fire, it did not matter that the plaintiff neither resided where suit was brought, nor that the cause of action “accrued” elsewhere.  “[I]t is enough to acknowledge that the state law and facts before us fall squarely within Pennsylvania Fire’s rule.”  Mallory, slip op. at 12.

Finally, the Mallory majority criticized the Pennsylvania Supreme Court for holding that “intervening decisions from this Court had ‘implicitly overruled’ Pennsylvania Fire.”  Id.  That was “clear error,” since “a lower court ‘should follow the case which directly controls, leaving to this Court the prerogative of overruling its own decisions.”  Id. (citation and quotation marks omitted).

That’s all the majority did in Mallory – uphold general jurisdiction on “the state law and the facts before it” − holding that a corporation that knowingly complied for a long period of time with statutorily mandated general jurisdiction had consented to it.  The majority did not even reaffirm Pennsylvania Fire.

Only the four red-brown coalition justices did that, in Part IV of the opinion.  Not even mentioning that International Shoe had overruled the Pennoyer v. Neff, 95 U. S. 714, 722 (1878), jurisdictional framework on which Pennsylvania Fire was based, the Mallory plurality found that International Shoe and Pennsylvania Fire “sit comfortably side by side.”  Slip op. at 13 (citation omitted).  So much for the caution in Daimler that Pennoyer era decisions “should not attract heavy reliance today.”  Daimler AG v. Bauman, 571 U.S. 117, 138 n.18 (2014).

No longer would there be just the two types of personal jurisdiction mentioned in Bristol-Myers Squibb Co. v. Superior Court, 137 S. Ct. 1773 (2017), and Daimler, 571 U.S. 117.  Rather, “consent” would now become a third co-equal form of jurisdiction:

[O]ur precedents applying International Shoe have long spoken of the decision as asking whether a state court may exercise jurisdiction over a corporate defendant that has not consented to suit in the forum.  Our precedents have recognized, too, that “express or implied consent” can continue to ground personal jurisdiction − and consent may be manifested in various ways by word or deed.

Mallory, slip op. at 15 (citations omitted).  The categories of “general” and “specific” jurisdiction are merely descriptive, since International Shoe “eschewed any ‘mechanical or quantitative’ test.”  Id. (citation and quotation marks omitted).  According to the plurality, “International Shoe simply provided a ‘novel‘ way to secure broader personal jurisdiction that did nothing to displace other ‘traditional ones.‘”  Id. at 16 (citation omitted).  International Shoe’s approach to personal jurisdiction would now only “govern[] where a defendant has not consented to exercise of jurisdiction.”  Id. at 23 n. 11,

Having rammed Pennsylvania Fire’s territorially-based approach into the post-International Shoe landscape, the Mallory plurality declares that this 1917 decision escapes the blanket overruling of all “prior decisions . . . inconsistent with” International Shoe that the Court decreed in Shaffer v. v. Heitner, 433 U. S. 186, 212 n.39 (1977).  Mallory, slip op. at 16-17.  The plurality then relied on “fairness,” concluding similarly to Ford Motor Co. v. Montana Eighth Judicial Dist. Court, 141 S.Ct. 1017 (2021), that where a corporation takes “full advantage of its opportunity to do business” in the forum state, Mallory, slip op. at 20, litigation tourism doesn’t really matter very much.

Given all this [presence in Pennsylvania], on what plausible account could International Shoe’s concerns with “fair play and substantial justice” require a Pennsylvania court to turn aside [this plaintiff’s] suit?

Id.  Answering one rhetorical question with another − How about that the subject matter of the suit had nothing whatever to do with any of those activities in Pennsylvania?  Ford Motor may have come with the limitation “[t]hat does not mean anything goes,” 141 S. Ct. at 1026, but the Mallory plurality leaves even that plaintive warning by the wayside.  To the plurality, size matters uber alles.

Ironically, despite the Mallory being written by Justice Gorsuch and joined by Justice Thomas, it also trashes federalism:

Some of our personal jurisdiction cases have discussed the federalism implications of one State’s assertion of jurisdiction over the corporate residents of another.  But . . . [t]o date, our personal jurisdiction cases have never found a Due Process Clause problem sounding in federalism when an out-of-state defendant submits to suit in the forum State.

Mallory, slip op. at 21.

Finally, the plurality rejects a straw-man argument it ascribes to the appellant that corporate registration should be ignored as a “meaningless formality.”  Id. at 21-22.  But the majority relies (id. at 23) primarily on Insurance Corp. of Ireland v. Compagnie des Bauxites de Guinee, 456 U. S. 694 (1982), a case that omits general jurisdiction by consent altogether from its list of consent-related “formalities” that can support personal jurisdiction.  456 U.S. at 703-04.

The four-justice dissent in Mallory makes many of the arguments we have discussed in our prior posts on this sort of personal jurisdiction.

  • The Due Process Clause “guards a defendant’s right to resist the judicial authority of a sovereign to which it has an insufficient tie.”  Mallory, dissenting slip op. at 2.
  • “Our precedent divides personal jurisdiction into two categories: specific and general.”  Id.
  • “[S]imply doing business is insufficient” to support general personal jurisdiction.  Id. at 4 (emphasis original).
  • “What [appellee] calls ‘consent’ is what the Pennsylvania Supreme Court called ‘compelled submission to general jurisdiction by legislative command.’”  Id. at 5.
  • “[I]nvoking the label ‘consent’ rather than ‘general jurisdiction’ does not render Pennsylvania’s long-arm statute constitutional.”  Id. at 6 (citation and quotation marks omitted).
  • “[T]here is nothing reasonable about a State extracting consent in cases where it has no connection whatsoever.” Id. (citation and quotation marks omitted).
  • “Pennsylvania’s effort to assert general jurisdiction over every company doing business within its borders infringes on the sovereignty of its sister States in a way no less “exorbitant” and “grasping” than attempts we have previously rejected.”  Id. at 7 (quoting Daimler 571 U.S. at 121-22, 138-39).
  • General jurisdiction by consent is not a “continuing tradition[] of our legal system” since “Pennsylvania is the only state with a statute treating registration as sufficient for general jurisdiction.”  Id. at 9-10 (emphasis original).
  • “The plurality’s rationale seems . . . that if a person is subject to general jurisdiction anywhere she is present, then a corporation should be subject to general jurisdiction anywhere it does business . . . is not only a non sequitur − it is contrary to the historical rationale of International ShoeId. at 13 (citation and quotation marks omitted).
  • “[E]xtensions of ‘consent and presence were purely fictional’ and can no longer stand after International Shoe.”  Id. at 14 (citation and quotation marks omitted).
  • “[T]his kind of legally implied consent is one of the very fictions that our decision in International Shoe swept away.”  Id.
  • Pennsylvania Fire . . . was decided before this Court’s transformative decision on personal jurisdiction in International Shoe,” and was overruled in Shaffer.  Id. at 15 (citation and quotation marks omitted).
  • “[W]e have repeatedly reminded litigants not to put much stock in our pre-International Shoe decisions.”  Id. at 16 (citations omitted).
  • “The established test [for general personal jurisdiction] − which the plurality barely acknowledges − is whether the corporation is ‘at home’ in the State.”  Id. at 18.
  • “If States take up the Court’s invitation to manipulate registration, Daimler and Goodyear will be obsolete, and, at least for corporations, specific jurisdiction will be superfluous.  Id. at 18 (citations and quotation marks omitted).

As mentioned, everything in Mallory, except its application of Pennsylvania Fire to the facts of this case, is non-precedential – a 4-4 split.  The tie-breaker is Justice Alito’s partial concurrence, which frames the question, and his response, thusly:

The sole question before us is whether the Due Process Clause of the Fourteenth Amendment is violated when a large out-of-state corporation with substantial operations in a State complies with a registration requirement that conditions the right to do business in that State on the registrant’s submission to personal jurisdiction in any suits that are brought there.  I agree with the Court that the answer to this question is no.  Assuming that the Constitution allows a State to impose such a registration requirement, I see no reason to conclude that such suits violate the corporation’s right to “fair play and substantial justice.”

Mallory, Alito partial concurrence at 1 (citation omitted) (emphasis original).

But Justice Alito finds that to be a rather fraught “assumption.”  “A State’s assertion of jurisdiction over lawsuits with no real connection to the State may violate fundamental principles that are protected by one or more constitutional provisions or by the very structure of the federal system that the Constitution created.”  Id.  However, Justice Alito considers such overbroad assertions of jurisdiction to be more of a dormant Commerce Clause issue than a Due Process issue – to be addressed on remand.  Id. at 1-2.  He was “not persuaded that Pennsylvania Fire has been overruled, Mallory, Alito partial concurrence at 4, or that, on the record in Mallory, it should be:

Pennsylvania Fire’s holding does not strike me as egregiously wrong in its application here.  Requiring [appellant] to defend against [appellee’s] suit in Pennsylvania, as opposed to in Virginia, is not so deeply unfair that it violates the railroad’s constitutional right to due process.

Id.  “[W]e have never held that the Due Process Clause protects against forum shopping” because “no party has suggested that we go so far.”  Id. at 5.

Regardless of constitutional niceties, however, Justice Alito is not well disposed to litigation tourism because “the Constitution restricts a State’s power to reach out and regulate conduct that has little if any connection with the State’s legitimate interests.”  Id.  In particular, “our due process decisions regarding personal jurisdiction have often invoked respect for federalism.”  Id. at 6.  But Due Process is a poor mechanism to enforce federalism where there is “consent.  Id. at 8.

Thus, Justice Alito believes the “dormant Commerce Clause” is the applicable remedy for litigation tourism.  That concept “vindicates a fundamental aim of the Constitution: fostering the creation of a national economy and avoiding the every-State-for-itself practices.”  Id. at 9. Moreover:

In my view, there is a good prospect that Pennsylvania’s assertion of jurisdiction here − over an out-of-state company in a suit brought by an out-of-state plaintiff on claims wholly unrelated to Pennsylvania − violates the Commerce Clause. . . .  [A]t the very least, [Pennsylvania’s] law imposes a significant burden on interstate commerce by requiring a foreign corporation to defend itself with reference to all transactions, including those with no forum connection.

Id. at 11-13 (citations and quotation marks omitted).  Tolerating widespread litigation tourism “would externalize the costs of their plaintiff-friendly regimes.”  Id. at 14 (citation and quotation marks omitted).

Justice Alito was “hard-pressed to identify any legitimate local interest that is advanced by requiring an out-of-state company to defend a suit brought by an out-of-state plaintiff on claims wholly unconnected to the forum State.”  Id. at 14.

[A] State generally does not have a legitimate local interest in vindicating the rights of non-residents harmed by out-of-state actors through conduct outside the State.  With no legitimate local interest served, there is nothing to be weighed to sustain the law.  And even if some legitimate local interest could be identified, I am skeptical that any local benefits of the State’s assertion of jurisdiction in these circumstances could overcome the serious burdens on inter-state commerce that it imposes.

Id. (citations and quotation marks omitted).

With no Commerce Clause challenge having been made, and without a factual basis to overturn Pennsylvania Fire, Justice Alito joined in vacating the Pennsylvania Supreme Court’s decision and remanding for further proceedings.  Id. at 15.

So what now?

Currently, as discussed more fully in our 50-state survey on general jurisdiction by consent, Pennsylvania (by the express terms of the statute discussed in Mallory) and Georgia, Minnesota, and Puerto Rico (by high-court statutory construction) are the only states in the country that arguably allow general jurisdiction by “consent” based solely on foreign corporate registration.  On less solid ground, federal courts in Iowa and Kansas have construed those states’ laws to support general jurisdiction by consent, but neither state (unlike Pennsylvania) has a statute that expressly so provides.

However, to the extent that Mallory removes Due Process as a constitutional constraint on other states following in Pennsylvania’s statutory footsteps, any state could enact a similar statute – and the states that are most likely to attract litigation tourists are also those most likely to see such attempts at statutory creation of general jurisdiction by consent.  On the other hand, the Georgia legislature may be willing to move in the other direction, if it takes up the Georgia Supreme Court’s plea to fix the drafting problem with its existing Long Arm Statute.

As for Mallory itself, the only thing that is certain is that Due Process will not rescue big companies with a history of compliance with Pennsylvania’s unique statute.  Mallory, slip op. at 12 (“It is enough to acknowledge that the state law and facts before us fall squarely within Pennsylvania Fire’s rule.”); Alito partial concurrence at 5 (Due Process allows a “company [with] extensive operations in” a forum state that “had clear notice that [the forum] considered its registration as consent to general jurisdiction” to be subject to general jurisdiction).

Beyond that, there is no majority in Mallory – not even as to whether Pennsylvania Fire deserves to be overruled or limited to its facts.  The standard for ascertaining the precedential value of non-majority United States Supreme Court decisions is stated in Marks v. United States, 430 U.S. 188 (1977):

When a fragmented Court decides a case and no single rationale explaining the result enjoys the assent of five Justices, the holding of the Court may be viewed as that position taken by those Members who concurred in the judgments on the narrowest grounds.

Id. at 193 (citation and quotation marks omitted).

Applying that approach to Mallory, the “narrowest” ground for affirmance is Justice Alito’s concurrence which, as discussed above, strongly suggests that, regardless of Due Process, general jurisdiction by consent, when applied to litigation tourists bringing clams with no nexus to the forum state, is an unconstitutional violation of the dormant Commerce Clause.  So defendants still have good constitutional grounds – albeit not nearly as good as before Mallory – to argue against allowing litigation tourism. Nonetheless, it would take a confident Pennsylvania trial judge indeed, to hold that the Pennsylvania statute violates the dormant Commerce Clause, so we’re not holding our collective breaths.

Moreover, there are suggestions in the various Mallory decisions that companies that do not comply with state registration statutes are not subject to general jurisdiction by consent.  Mallory, Jackson concurrence at 3 (appellant not “compelled to register”; registration “required when corporations seek to conduct local business”) (emphasis original)); Mallory, Alito partial concurrence at 13 (“Some companies may forgo registration altogether, preferring to risk the consequences rather than expand their exposure to general jurisdiction.”); cf. Mallory, slip op. at 21 (appellant “appreciated the jurisdictional consequences attending these actions and proceeded anyway, presumably because it thought the benefits outweighed the costs.”).  Any corporation considering the route of “efficient breach of corporate registration laws,” Alito partial concurrence at 13, may wish to seek a declaratory judgment that enforcement of non-compliance penalties would be unconstitutional. Again, good luck, and be sure to have thorough consultation with counsel.

Finally, as all the Mallory opinions make clear, jurisdictional litigation in Mallory itself is not over.  The Pennsylvania Supreme Court’s interpretation of the Pennsylvania statute has not been challenged, and the litigation has been remanded for further proceedings – which will certainly include the dormant Commerce Clause issues raised in the Alito concurrence.