In a landmark case that could open the door to personal jurisdiction so corporations can be sued wherever they do business, the Supreme Court heard oral arguments Tuesday. In the Mallory v. Norfolk Southern Railway Co., the Court must decide whether Pennsylvania can require companies to submit to general personal jurisdiction as a condition of registration to do business in the state. The Pennsylvania Supreme Court said no — forced submission to general jurisdiction violates the Due Process Clause of the Fourteenth Amendment. After more than an hour of oral arguments, even the staunchest of Court watchers would be wary of making a prediction about how the case will be decided.
As a refresher: the due process clause limits the authority of courts to exercise personal jurisdiction over defendants. Personal jurisdiction comes in two flavors: specific and general. A court with specific jurisdiction over an out-of-state defendant may hear only claims arising specifically from the defendant’s contacts with the state. But a court of general jurisdiction may “hear any claim against” a defendant. Daimler AG v. Bauman, 134 S. Ct. 746, 751 (2014) (internal quotation marks and parentheses omitted). Traditionally, general jurisdiction requires that the defendant’s affiliations with the forum state “be so constant and pervasive as to make him essentially at home” there. Id. But Pennsylvania’s long-arm statute authorizes the exercise of “general personal jurisdiction” over “qualified” corporations.[ed] as a foreign corporation” under Pennsylvania law—in other words, those that are registered under state law to do business in the state. That was the sole basis for plaintiff’s general jurisdiction here. The plaintiff, a resident of Virginia, sued his former employer in Pennsylvania state court, alleging that he was exposed to harmful carcinogens during his employment. But his former employer, Norfolk Southern, is a freight railroad company with its principal place of business (at the time) in Norfolk, Virginia, not Pennsylvania.
In Supreme Court filings over the summer, the parties battled to properly resolve that question. Petitioner took a strongly historical approach, arguing that the original public meaning of the Due Process Clause permitted Pennsylvania’s jurisdictional consent scheme because similar statutes have long existed. According to petitioner, courts before and after the ratification of the Fourteenth Amendment upheld consent-by-record statutes, and Congress itself enacted one for the District of Columbia in 1867. Meanwhile, respondent focused more on modern general jurisdiction decisions, arguing that the principles outlined in decisions such as Good year and Daimler were irreconcilable with the petitioner’s position. A number of amici curiae also intervened on both sides. Most notably, the Attorney General’s Office, which represents the United States government at the Supreme Court, sided with the respondents. The attorney general argued that a state court could not exercise general jurisdiction based solely on registration to do business and urged the Court to limit its decision to the narrow context of general jurisdiction under the Fourteenth Amendment.
At the hearing, the justices grappled with how both sides’ arguments would affect the Court’s previous personal jurisdiction precedents. Justice Kagan pressed the petitioner’s counsel to explain why his position would not “overrule” or “overrule” the Court’s decisions in Daimler and Good year. Meanwhile, Judge Gorsuch asked the respondent’s attorney to harmonize his position with The Pennsylvania Fire, a 1917 case in which the Court upheld a similar statute in an opinion that was written by Justice Oliver Wendell Holmes and affirmed a decision by the legendary Learned Hand. On the other hand, Chief Justice Roberts asked counsel for the petitioner why the cases preceding the Court’s 1945 decision International shoes it should not be “relegated to the dustbin of history”.
The judges also questioned the lawyers closely about the historical record. If only a few state laws were similar to Pennsylvania’s, Justice Thomas asked, how would the Court know if it had enough support to rule in favor of the petitioner? Judge Barrett expressed some skepticism that the historical service of process statutes upon which petitioner relied were indeed comparable to Pennsylvania’s consent scheme.
One issue that seemed to interest the justices was the precise nature of the constitutional right that the respondent asserts. Was it the right of an out-of-state corporation not to be sued where it did not have its principal place of business, its right of unfettered access to the Pennsylvania market under the latent commerce clause, or a combination of the two?
Further complicating the issue was the issue of consent. Why could the defendant not waive his constitutional rights by registering to do business, just as criminal defendants frequently waive their constitutional rights in court, Justice Jackson wanted to know. And several of the justices presented hypotheticals to lawyers exploring the potentially coercive nature of jurisdictional statutes — could Pennsylvania have made market access conditional on a $100,000 payment, Chief Justice Roberts asked.
The judges have lawyers on both sides, including a lawyer representing the Attorney General’s office. In that questioning, some fault lines began to emerge—Justice Kagan and Chief Justice Roberts seemed quite skeptical of the petitioner’s position, while Justices Sotomayor, Gorsuch, and Jackson leaned more heavily on the defendant’s and government’s counsel. But there was no clear indication of how the Court would ultimately come out. So we will have to wait. The Supreme Court will issue a decision by July 2023 at the latest.