What to Know About Personal Jurisdiction Post-Mallory

By Tarryn E. Walsh | Updated July 2023

Ever since the U.S. Supreme Court’s seminal International Shoe decision, both civil litigators and corporate entities have operated under the premise that the constitutional due process inquiry for personal jurisdiction necessitated a factual showing that would satisfy the ubiquitous “minimum contacts” prong for the exercise of either general or specific jurisdiction, such that mere registration to do business in a state was insufficient on its own. But now, an explicit consequence of business registration in the Commonwealth of Pennsylvania serves as the keystone for the new Supreme Court decision that puts a limited – but importantly, state-specific – wrinkle in that tenet, based on the principle of consent to jurisdiction.

On 27 June 2023, the Supreme Court issued its opinion in Mallory v. Norfolk Southern Railway Co., 600 U.S. 122, wherein the Court examined whether a particular Pennsylvania jurisdictional statute expressly linking business registration in a state to the existence of general personal jurisdiction of the courts within the Commonwealth offends the Due Process Clause. With respect to corporations, for example, the pertinent statute reads:  

General rule. The existence of any of the following relationships between a person and this Commonwealth shall constitute a sufficient basis of jurisdiction to enable the tribunals of this Commonwealth to exercise general personal jurisdiction over such person…:

…

(2) Corporations.—

(i) Incorporation under or qualification as a foreign corporation under the laws of this Commonwealth.

42 Pa. C.S.A. §5301(a) (italics and underlines added).[1] As for the scope of personal jurisdiction available, the statute further decrees that “[w]hen jurisdiction over a person is based upon this section any cause of action may be asserted against him, whether or not arising from acts enumerated in this section.” Id. at (b). In other words, the explicit text of the statute affords general, or all-purpose, jurisdiction over a foreign corporation simply by virtue of being qualified to do business in Pennsylvania.

While the Pennsylvania Supreme Court had held that the statute at issue offended the corporate defendant’s constitutional due process rights by dispensing with any “minimum contacts” analysis, a narrow majority of the Supreme Court reversed that holding, finding that the Court’s century-plus-old decision in Pennsylvania Fire Ins. Co. of Philadelphia v. Gold Issue Mining & Milling Co., 243 U.S. 93 (1917), controlled the case and permitted the Pennsylvania legislature to mandatorily link business registration with jurisdictional consent. Concisely stated, the Court characterized the Pennsylvania statute as a form of consent to personal jurisdiction, with Norfolk Southern having agreed to answer suits in Pennsylvania courts by virtue of its voluntary registration to do business there, in line with the explicit language enacted by the Pennsylvania legislature.

Of some note though, that is the extent of the majority holding. Though author Justice Gorsuch went on to reject Norfolk Southern’s request that the Court overrule Pennsylvania Fire in light of the Court’s development of personal jurisdiction jurisprudence in the intervening hundred years, including but not limited to International Shoe’s “minimum contacts” framework, just three other justices joined in that section of the opinion, forming only a plurality that felt “[t]he two precedents sit comfortably side by side.”

Indicative of the implications, the concurrences and dissents may serve as a preview for any future litigation on this topic. First one, Justice Jackson concurred to emphasize that personal jurisdiction is a waivable right, relying on the Court’s 1982 decision in Insurance Corp. of Ireland v. Compagnie des Bauxites de Guinee, 456 U.S. 694, and noting that there are multiple ways for a defendant to waive that right, which removes any due process question from the proverbial equation. Justice Alito also concurred in part, first agreeing fully with the outcome relating to the Pennsylvania statute itself, but also identifying potential problems with such statutes in the context of the Commerce Clause (and perhaps signifying a roadmap for challenges to any future such statutes). Lastly, with the backing of Justices Roberts, Kagan and Kavanaugh, Justice Barrett authored a spirited dissent that led off by characterizing the majority opinion as one that “flies in the face of our precedent” when it comes to the interplay between personal jurisdiction and due process. Suggesting that the majority opinion “might as well” “overrule [the Court’s] traditional contacts-based approach to jurisdiction,” Justice Barrett highlighted that the Pennsylvania statute separately covers consent as a jurisdictional basis and noted that registration paperwork itself does not cover the statutory link to general jurisdiction, effectively questioning whether true consent is given. To sum up the dissent, Justice Barrett views the majority opinion as giving states carte blanche to circumvent the Due Process Clause by enacting a statute that is expressly “at odds with” it by doing away with the necessity of requisite contacts, and she likewise chastised the majority opinion for ignoring principles of interstate federalism.

Ultimately, the practical question arises – where does this decision leave things, so to speak? While the Mallory decision does not invoke a sea change in the personal jurisdiction realm on the whole, since consent to jurisdiction has always been a possibility, Pennsylvania just became a much hotter ticket for lawsuits against companies that are qualified to do business in the Commonwealth. Such companies are likely, and justifiably, concerned about a potential influx of Keystone State-based litigation, and corporate structuring may well be pushed to the forefront in an effort to insulate from suits in that forum if it is not a home base of sorts. Importantly though, Pennsylvania seems to be the only state that has this particular type of express statute on its books, so the decision’s immediate reach is somewhat limited.

By and large, the weight of jurisprudence from state supreme courts across the country, especially post-Daimler and the “at home” standard, appears to maintain that the formality of registration to do business in a state does not on its own create a basis for the exercise of personal jurisdiction, absent express statutory language to the contrary. Thus, eyes may turn to state legislatures to watch for any legislative enactment of statutes like Pennsylvania’s, as well as the potential for challenges to any such statutes under the Commerce Clause, a la Justice Alito’s concurrence in part. The potential for detrimental business implications from such enactments to states has not gone unnoticed though – for example, a recent effort in New York to do enact one failed at the gubernatorial veto level due to the worry that businesses would balk at doing business in the Empire State if consent to general jurisdiction in the state flowed automatically from the formality of corporate registration.

In sum, and germane to the maritime world, it just became significantly easier for plaintiffs to initiate lawsuits in Pennsylvania against corporate defendants registered to do business there, such as in Pennsylvania ports or around Pennsylvania’s navigable waterways. But beyond that state-specific scenario, the Mallory decision does not appear to create much of a wake in the current personal jurisdiction landscape, with the traditional “minimum contacts” inquiries carrying the day elsewhere.

[1] The statute also addresses other forms of business entities, such as partnerships, unincorporated associations and similar entities, in subsection (a)(3).