ALF Urges Supreme Court To Overrule Century-Old Precedent On General Personal Jurisdiction Over Corporate Defendants
In Mallory v. Norfolk Southern Railway Co., No. 21-1168, the Supreme Court will decide whether a corporate defendant’s registration to do business in a State where it is not “at home” can be deemed consent to, or otherwise a basis for, exercise of the State’s general (“all-purpose”) jurisdiction, without violating the constitutional right to due process.
In an amicus brief filed in January 2022, ALF urged the Supreme Court to review this issue in a different case, Cooper Tire & Rubber Co. v. McCall, No. 21-926 (see Cooper Tire case summary). The Court instead has granted certiorari in Mallory, an appeal from a Pennsylvania Supreme Court decision holding unconstitutional a Pennsylvania statute that arguably puts corporations on notice that registering to do business in Pennsylvania will be deemed consent to that State’s general jurisdiction. In the Cooper Tire appeal, which the Court apparently is holding in abeyance pending its decision in Mallory, the Georgia Supreme Court held that consent-by-registration is consistent with Pennsylvania Fire Insurance Co. of Philadelphia v. Gold Issue Mining & Milling Co., 243 U.S. 93 (1917), a case which the U.S. Supreme Court’s modern personal-jurisdiction jurisprudence implicitly abrogates, but does not explicitly overrule.
ALF has filed an amicus brief in Mallory urging the Court to explicitly overrule Pennsylvania Fire.
Whether due process allows a state to assert general personal jurisdiction over a foreign corporation simply because it registers to do business there, as required by state law.
Additional Background:
Imposing limits on the ability of state and federal courts to assert personal jurisdiction over out-of-state defendants is fundamental to due process—what the Supreme Court famously described in International Shoe Co. v. Washington, 326 U.S. 310, 316 (1945), as “fair play and substantial justice.” International Shoe and its progeny, particularly Daimler AG v. Bauman, 571 U.S. 117 (2014) and Goodyear Dunlop Tires Ops., S.A. v. Brown, 564 U.S. 915 (2011), have refined and narrowed the criteria governing the circumstances under which a State’s courts can assert “personal jurisdiction” over an out-of-state corporation.
Under these precedents, a court can assert “general” (“all-purpose”) jurisdiction over a corporation only in a State where the corporation is “at home”—typically where the corporation is incorporated and/or has its principal place of business. General jurisdiction (as distinct from “specific” or “case-linked” jurisdiction”) means that a corporation can be sued in that State for any and all claims no matter where the plaintiff’s cause of action arose.
The Supreme Court, however, never has explicitly overruled a century-old opinion, Pennsylvania Fire Insurance Co. of Philadelphia v. Gold Issue Mining and Milling Co., 243 U.S. 93 (1917), which held that a corporation’s appointment of an agent to accept service of process in a State in order to do business there is deemed consent to the State’s general jurisdiction. The Georgia Supreme Court’s September 2021 opinion in Cooper Tire & Rubber Co. , a case involving a Florida automobile accident allegedly caused by a defective tire, held that it was proper to hale into Georgia state court the tire’s out-of-state manufacturer merely because it is registered to do business in that State. But in Mallory v. Norfolk Southern, an asbestos-related case where “a Virginia resident filed an action in Pennsylvania against a Virginia corporation, alleging injuries in Virginia and Ohio,” the Pennsylvania Supreme Court held that the plaintiff’s reliance on Pennsylvania Fire is misplaced in light of International Shoe and its progeny. The state supreme court concluded that the Pennsylvania corporate registration scheme at issue “fails to comport with the guarantees of the Fourteenth Amendment; thus, it clearly, palpably, and plainly violates the Constitution.”
ALF’s Amicus Brief:
ALF’s amicus brief in Mallory urges the Court to explicitly overrule Pennsylvania Fire in order to dispel any doubt about whether courts are bound by it. The amicus brief discusses why Pennsylvania Fire easily satisfies the Court’s stare decisis criteria for overruling erroneous constitutional precedents: Pennsylvania Fire (i) is egregiously wrong; (ii) continues to have significant adverse jurisprudential and real-world consequences; and (iii) any reliance interests in preserving it are minimal. In addition, ALF’s amicus brief explains that explicitly overruling Pennsylvania Fire would deter forum shopping and preserve interstate federalism.
Status:
The Supreme Court, split 5 to 4, issued an unfavorable opinion on June 27, 2023.
Contact:
Lawrence S. Ebner, Executive Vice President & General Counsel, Atlantic Legal Foundation
