We closed our post on the terrible Supreme Court decision in Mallory v. Norfolk Southern Railway Co., 143 S. Ct. 2028 (2023), with this “stay tuned” message:
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.
Indeed, as soon as Mallory was remanded, the defendant/appellee did just that, filing its “Application to Set a Briefing Schedule on Remand from the U.S. Supreme Court or, Alternatively, to Exercise King’s Bench or Extraordinary Jurisdiction” on July 28, 2023.
The application recalled the Pennsylvania Supreme Court’s unanimous conclusion that “Pennsylvania has no legitimate interest in a controversy,” like Mallory, “with no connection to the Commonwealth that was filed by a non-resident against a foreign corporation that is not at home here,” Mallory v. Norfolk Southern Railway, 266 A.3d 542, 567 (Pa. 2021) (“Mallory I”), and sought to have the court apply that conclusion, on remand, to the dormant commerce clause (“DCC”) issue identified in Justice Alito’s partial concurrence in Mallory v. Norfolk Southern Railway, 143 S. Ct. 2028 (2023) (“Mallory II”). See our posts here, discussing Mallory I; and here, discussing Mallory II.
The Mallory defendant/appellee argues that the Pennsylvania Supreme Court should decide the issue on the current appeal – without further remand – either on the basis of its existing jurisdiction over the remanded appeal, or under a Pennsylvania peculiarity, the court’s “Kings Bench” power. Appellate jurisdiction already exists, the application argues, as an ordinary remand in the course of the appellate review of the constitutionality of the Pennsylvania long arm and corporate registration statutes. Application at 8-10 (relying on 42 Pa. C.S. §722(7)). Alternatively, because of the potential burden on the court system from a flood of litigation unrelated to anything that happened in Pennsylvania, the court should exercise its supervisory Kings Bench power and decide the DCC issue on that basis. Id. at 10-12 (“King’s Bench jurisdiction allows the Court to exercise power of general superintendency over inferior tribunals even when no matter is pending.”) (citation and quotation marks omitted). The importance of the issue is unmistakable:
That question is uniquely important to Pennsylvania, as only the Commonwealth has a long-arm statute that explicitly asserts general jurisdiction based solely on corporate registration. And Mallory II has significantly raised the profile of this issue − if the Commonwealth’s unique law flew somewhat under the radar before, it is now front-page news. As a result, potential litigants across the country and the world now have reason to think that, if they want to sue a national or multinational corporation that does business in Pennsylvania − or is just registered to do business here − they can file in the Court of Common Pleas. A deluge of litigation will likely result.
Application at 13 (citations omitted).
Beyond jurisdiction, defendant/appellee argues that, regardless of the Due Process status of its supposed “consent” by virtue of registering to do business in Pennsylvania, the DCC can preclude “assertions of jurisdiction over out-of-state companies in light of interstate commerce concerns.” Application at 6 (citing Mallory II, 143 S. Ct. at 2052). The Mallory application then discusses the DCC substantively, pointing out:
- The DCC is violated by litigation imposing an undue burden on interstate commerce.
- Suits with zero relation to the venue by definition create undue burdens on commerce under “Pike balancing” because no legitimate basis for exercising jurisdiction exists.
- The same burdens exist for international as well as interstate commerce.
- According the federal government’s amicus brief in Mallory II, Pennsylvania’s allowing registration-based jurisdiction “subverts interstate federalism” and “poses risks to international comity” while serving “no legitimate countervailing interest.”
- Several United States Supreme Court decisions support the preclusive exercise of the DCC to the relevant Pennsylvania statute.
- Pennsylvania’s imposition of registration-based jurisdiction discriminates against non-Pennsylvania companies and thus against interstate commerce.
Application at 15-21.
Finally the defendant/appellee’s Mallory application requested that the Pennsylvania Supreme Court order a new round of briefing and ultimately schedule oral argument on the DCC issue. Id. at 22
Only three days after the application was filed, plaintiff/appellant Mallory filed “Appellant’s Response to Norfolk Southern’s Application To Set a Briefing Schedule.” Much of the argument was misplaced, asserting that the defendant – who was the appellee – either didn’t preserve, or inadequately preserved the DCC issue. Response at 2-3 (referencing “fail[ure] to preserve”). Such waiver arguments betray a fundamental ignorance of appellate procedure because appellees, as opposed to appellants, cannot waive issues. Indeed, an appellate court can affirm for any reason, even one not raised by the appellee at all. Appellees simply “d[o] not bear the burden of issue preservation.” Heim v. Medical Care Availability & Reduction of Error Fund, 23 A.3d 506, 511 (Pa. 2011). “[A]n appellate court may affirm a valid judgment based on any reason appearing as of record, regardless of whether it is raised by the appellee.” Commonwealth v. Moore, 937 A.2d 1062, 1073 (Pa. 2007).
[T]his Court, in its discretion, may sustain a valid judgment for any reason appearing of as of record. This right-for-any-reason principle aligns with the recognition that it is the petitioner/appellant who has the greatest control over the framing of the issues presented in appeals, including discretionary ones. It is only fair, then, that an appellee should be permitted to present the Court with other reasons why a judgment should be sustained after the matter is accepted for review. Accordingly, Appellant’s contention that waiver considerations outside the four corners of an order allowing a discretionary appeal may not be considered is meritless.
Commonwealth v. Bishop, 217 A.3d 833, 839 (Pa. 2019) (citations omitted).
Otherwise, plaintiff/appellant Mallory’s response does not oppose rebriefing and reargument of the DCC issue. “The parties agree that this Court will have jurisdiction to address the Commerce Clause argument” and “further agree that the Court should set a briefing schedule and that the Court should order oral argument.” Response at 3. Mallory proposed, first, that the appellee file the first “supplemental” brief, as if it were the appellant; and, second, that the appellant file a responsive brief, as if it were the appellee. Id. at 3-4. That’s odd, but Mallory’s third proposal, that appellee be denied any right to file a reply brief because it supposedly “had an obligation to raise all arguments in favor of affirmance in its initial briefs,” Response at 4, is simply wrong because as just discussed appellees have no such “obligation.”
The Response further proposes: (1) successive thirty-day deadlines for briefing with the “usual leave” for extensions of time; (2) that both sides’ briefs be limited to 8,000 words; (3) that the participation of amicus curiae be allowed “consistent with Pa. R.A.P. 531 as if these supplemental briefs were the opening and responsive briefs on appeal”; and (4) that the Court schedule oral argument. Id. at 4.
Thus, unless the Pennsylvania Supreme Court in Mallory were to act contrary to the positions of both sides, the DCC issue will be decided promptly, on this appeal without any intervening remand. It remains to be seen how the Pennsylvania Supreme Court will respond to the Application in Mallory but it seems likely from the degree of procedural agreement between both sides, that the DCC issue will be briefed this fall, and oral argument probably scheduled before the end of 2023 (after the current one-justice vacancy on the court is filled by the November election).
Finally, while these developments appear to portend a relatively rapid process of deciding the Mallory DCC issue on remand from the United States Supreme Court – and a possible round two at the high court − there is always this caveat. If at any time the plaintiff/appellee feels that he is likely to lose the DCC issue in Mallory, plaintiff can torpedo the entire appeal simply by dismissing his case. Given the value of all the other litigation that turns on the registration-based jurisdictional question, the possibility of a third-party compensated dismissal in such circumstances always exists, since delay lets such litigation proceed. Therefore, defendants in other cases based on Pennsylvania registration-based jurisdiction should continue to preserve and pursue the DCC issue, and not assume that Mallory will necessarily be decisive.