Pennsylvania Supreme Court Protects Due Process Rights and Rejects “Jurisdiction by Consent”
On December 22, 2021, a unanimous Pennsylvania Supreme Court held in Robert Mallory v. Norfolk Southern Railway Company that a foreign corporation is not subject to personal jurisdiction in the Commonwealth of Pennsylvania solely because of its registration to do business there. The Mallory decision is an affirmation of the due process rights of non-Pennsylvania corporate defendants and significantly impacts who can permissibly be sued in the Commonwealth.
Mallory, a resident of the Commonwealth of Virginia, filed suit in Pennsylvania seeking damages under the Federal Employers’ Liability Act against his former employer, Norfolk Southern, a Virginia corporation, for injuries allegedly sustained in the course of the plaintiff’s work in Virginia and Ohio. The sole basis for the exercise of personal jurisdiction was Norfolk Southern’s registration to do business in the Commonwealth of Pennsylvania. Pennsylvania’s business registration statute is unique in that the statute conditions registration upon a corporation’s “consent” to personal jurisdiction in Pennsylvania courts. Before Mallory, Pennsylvania state courts and many of Pennsylvania’s federal courts generally permitted the exercise of personal jurisdiction over foreign corporations based solely on their registering to do business in Pennsylvania.
The appeal in Mallory required the Pennsylvania Supreme Court to consider whether Pennsylvania’s broad exercise of personal jurisdiction through its corporate registration statute comports with the demands of due process as applied by the United States Supreme Court in Goodyear Dunlop Tires Operations, S.A. v. Brown and Daimler AG v. Bauman. The court answered the question in the negative and held that the exercise of personal jurisdiction over out-of-state corporations based solely on a corporation’s registration to do business is not constitutionally sustainable, and that Pennsylvania’s “statutory scheme violates due process to the extent that it allows for general jurisdiction over foreign corporations, absent affiliations within the state that are so continuous and systematic as to render the foreign corporation essentially at home in Pennsylvania.” The court also held that “compliance with Pennsylvania’s mandatory registration requirement does not constitute voluntary consent to general personal jurisdiction.”
After Mallory, an out-of-state corporation’s registration to do business is no longer, by itself, sufficient to permit the exercise of personal jurisdiction. The Mallory decision aligns Pennsylvania law with United States Supreme Court precedent, upholds the principles of due process and fair play that govern the exercise of personal jurisdiction, and, most importantly, rejects the rule that a foreign corporation’s registration to do business is sufficient, on its own, to permit the exercise of personal jurisdiction over an out-of-state corporation.