ALF Urges Supreme Court To Revisit Constitutionality of Pennsylvania’s Consent-By-Registration Statute
Under Pennsylvania law, companies that register to do business in that State are required to agree to appear in its courts on “any cause of action” filed against them. In other words, by registering to do business in Pennsylvania, a corporation is 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 plantiff for a cause of action that has no connection to Pennsylvania.
In Mallory v. Norfolk Southern Railway Co., 600 U.S. 122 (2023), the Supreme Court held 5 to 4 that this consent-by-registration scheme does not violate the Fourteenth Amendment’s Due Process Clause. But the question that the Court addressed 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 the consent-by-registration statute violates the 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.
Both of these questions are squarely raised by the pending certiorari petition in Syngenta Crop Protection, LLC v. Nemeth (24-1190), which is part of the paraquat mass tort litigation in Philadelphia’s Court of Common Pleas. ALF has filed an amicus brief urging the Court to review the case and address the important constitutional questions about consent-by-registration that the Supreme Court left unanswered in Mallory.
1. Whether the Commerce Clause permits a State to condition an out-of-state company’s right to do business in that State on the company’s submission to personal jurisdiction in any suits that are brought there.
2. Whether the Due Process Clause is violated where, as here, an out-of-state defendant without 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.
ALF’s Amicus Brief:
ALF’s amicus brief urges the Supreme Court to grant review to address the important Commerce Clause and Due Process Clause questions 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 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. This is particularly troubling in Pennsylvania, where Philadelphia’s Court of Common Pleas is notorious for awarding plaintiffs astronomical damages awards in mass tort litigation.
The brief explains that the lurking 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, state sovereignty becomes almost meaningless.
ALF’s brief also argues that if necessary, the Court should overrule, in whole or part, Pennsylvania Fire Insurance Co. of Philadelphia v. Gold Issue Mining & Milling Co., 243 U.S. 93 (1917), which apparently holds that a nonresident corporation’s appointment of an agent to accept service of process in a State can be deemed consent to the State’s general jurisdiction. Overruling Pennsylvania Fire insofar as it conflicts with the Court’s modern personal jurisdiction jurisprudence would comport with the Court’s stare decisis principles.
Status:
The certiorari petition is pending.
Contact:
Email ALF Executive Vice President & General Counsel Lawrence Ebner.
