Photo of Bexis

According to a recent decision, one Pennsylvania court thinks that the answer is “yes.” 

Simon v. First Savings Bank of Indiana, 2023 WL 5985282 (E.D. Pa. Sept. 14, 2023), isn’t a prescription medical product case, and doesn’t even involve torts, so we didn’t notice it until we recently had occasion to Shepardize (an anachronism because Shepard’s (thankfully) no longer exists except online) the infamous decision, Mallory v. Norfolk Southern Railway Co., 143 S. Ct. 2028 (2023) .  We took a look at Simon’s “refused to extend” reasoning.

In an employment action, the Simon plaintiff had worked exclusively from his Pennsylvania home, except for “regular” trips to Indiana, for the defendants – both Indiana corporations – until he was terminated.  2023 WL 5985282, at *1.  He sued, but we don’t care over what.  The defendants moved to dismiss for lack of personal jurisdiction.

The plaintiff argued that the defendants were subject to both general (all purpose) and specific (case-linked) personal jurisdiction.  Relying on Mallory, the plaintiff argued that general jurisdiction applied, even though the defendants “had not registered to do business or appointed an agent to accept process” in Pennsylvania, because they actually did do business in the Commonwealth.  Id. at *2.

Simon said “no.”

True, these “[d]efendants were certainly doing business in Pennsylvania as that term is used in common parlance,” but neither Mallory nor any other precedent decreed that “as a consequence the corporation is deemed to be subject to general jurisdiction.”  Id. at *3.  Doing business without registering does not trigger general jurisdiction under Mallory:

[Pennsylvania law] specifically allows [defendant] to defend an action.  The statute further provides that the failure to register does not impair the validity of a contract or any other act of that party.  Significantly, it says nothing about implied consent to general jurisdiction as a result of such a violation.

Id.  Thus, the defendant, while doing business in Pennsylvania without a license, was not subject to general jurisdiction under Mallory even though a properly registered corporation would be on the same facts:

[R]eliance on Mallory to establish that there is general jurisdiction is not persuasive. . . .  [P]laintiff has not shown that defendants are violating Pennsylvania law in not registering as foreign corporations.  Even if this court is incorrect, such a violation does not trigger “consent” to general jurisdiction over all claims against defendants, whatever other penalties may exist.  General jurisdiction would have to rest on the defendants’ continuous and systematic activity in Pennsylvania so as to render it at home here.  This argument fails.

Id. (citation omitted). 

The defendants in Simon still lost their jurisdictional motion, because the plaintiff’s causes of action concerned their alleged actions in Pennsylvania – their actual doing business in the Commonwealth – and thus created specific jurisdiction.  Id. at *4-5.  That may be right; it may be wrong.  We don’t care.  If the same defendants actually had registered, the plaintiffs could have sued them over anything that happened anywhere, with no Pennsylvania contacts at all, which is the primary vice of Mallory’s consent uber alles rationale.

That’s the lesson that Simon sez.  Even if corporations are doing business in Pennsylvania, from a jurisdictional standpoint they are better off not registering.  That makes no sense to us, but that’s Mallory.