ALF Amicus Briefs Urge Supreme Court To Revisit State Consent-By-Registration Statutes

Under Pennsylvania and Minnesota laws, companies that register to do business in those states are deemed to have consented to the state’s general (“all purpose”) jurisdiction. This means that an out-of-state corporation can be sued by an out-of-state plaintiff for a cause of action that has no connection to Pennsylvania or Minnesota. All states have business registration statutes, and some embody  consent-by-registration schemes.

In Mallory v. Norfolk Southern Railway Co., 600 U.S. 122 (2023), the Supreme Court held 5 to 4 that Pennsylvania’s consent-by-registration statute does not violate the Fourteenth Amendment’s Due Process Clause.

The question that the Court addressed in Mallory was circumscribed by the facts of the case. Justice Alito, who cast the deciding vote, described that question as follows: “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.” Id. at 150 (emphasis added) (Alito, J., concurring in part and concurring in the judgment). The Court did not address the question of whether the consent-by-registration statute violates due process if an out-of-state corporation registers to do business in Pennsylvania but does not have substantial business operations there.

Nor did the Court address the question of whether a consent-by-registration statute violates the “dormant Commerce Clause” regardless of whether a corporation has substantial operations in the state. Justice Alito explained at length in his separate opinion that “there is a good prospect” that it does where a state asserts general jurisdiction “over an out-of-state company in a suit brought by an out-of-state plaintiff on claims wholly unrelated” to the state. Id. at 160. The dormant Commerce Clause is a well-established constitutional interpretation that prohibits a state from unduly restricting interstate commerce.

ALF has filed amicus briefs supporting two pending certiorari petitions that raise the dormant Commerce Clause issue. The  petition in Norfolk Southern Railway Co. v. Mallory (25-1208 arises from the same Mallory case and Pennsylvania consent-by-registration statute that the Supreme Court addressed in 2023. The petition in BNSF Railway Co. v. Lynn (25-1046) arises from the Minnesota consent-by-registration statute.

Case:

BNSF Railway Co. v. Lynn (25-1046) & Norfolk Southern Railway Co. v. Mallory (25-1208)

Question(s) Presented:

Whether state statutes that require an out-of-state corporation to accede to a state’s general jurisdiction in order to register to do business in the state violate the dormant Commerce Clause.

Additional Background:

While a Virginia resident, the plaintiff in Norfolk Southern v. Mallory  sued that company for exposure to carcinogens that he alleges occurred while working for the railroad in Ohio and Virginia. BNSF is a Virginia corporation that was headquartered in Virginia when the suit was filed. On remand from the Supreme Court’s 2023 due-process decision, the notoriously plaintiff-friendly Philadelphia Court of Common Pleas  rejected the dormant Commerce Clause argument, and the Pennsylvania appellate courts denied review of that ruling.

The plaintiff in BNSF v. Lynn, an Iowa resident, sued that company in Minnesota state court for an injury he sustained while working for the railroad in South Dakota. BNSF was a Delaware corporation with its principal place of business in Texas. The certiorari petition seeks review of a Minnesota Court of Appeals opinion rejecting the railroad’s dormant Commerce Clause argument.

ALF’s Amicus Brief:

ALF’s amicus briefs in Norfolk Southern and BNSF urge the Supreme Court to grant review to address the important dormant Commerce Clause question that Mallory left unanswered. The brief explains that until the Court does so, Mallory will continue to undermine the civil justice system by incentivizing forum shopping and eroding interstate federalism.

More specifically, Mallory has done nothing to constrain plaintiff-friendly states like Pennsylvania & Minnesota from using consent-by-registration as a hook for imposing general jurisdiction on national corporations that have no practical choice but to register to do business in all 50 States. The potential assertion of general jurisdiction by every state where a corporation registers to do business not only eviscerates the Court’s modern personal jurisdiction principles—such as limiting exercise of general jurisdiction to States where a corporation is “at home”—but also sharply skews the civil litigation playing field by significantly increasing forum-shopping opportunities for the plaintiffs’ bar.

The briefs explain that the issue of whether the dormant Commerce Clause precludes consent-by-registration regardless of whether a corporation has substantial operations in a state also needs to be addressed because it provokes serious federalism concerns. If consent-by-registration enables a state to open its courthouse doors to out-of-state plaintiffs who wish to sue out-of-state corporate defendants for causes of action that have no connection to the state, then state sovereignty becomes almost meaningless.

Contact:

Email ALF Executive Vice President & General Counsel Lawrence Ebner.