Caseflicks

Supreme Court of the United States • 2023

Mallory v. Norfolk Southern R. Co

600 U.S. 122

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Takeaway

In short, this case preserves Pennsylvania Fire: a corporation that knowingly registers under a statute expressly making registration consent to general jurisdiction may be sued there on unrelated claims without violating due process, though a dormant Commerce Clause challenge remains open.

Background

Robert Mallory worked for Norfolk Southern as a freight-car mechanic for almost 20 years in Ohio and Virginia. After being diagnosed with cancer, he alleged that workplace exposure to asbestos and other carcinogens caused his illness. He sued Norfolk Southern in Pennsylvania state court under the Federal Employers’ Liability Act.

Norfolk Southern was incorporated and headquartered in Virginia when the suit began, and Mallory’s alleged exposures occurred in Ohio and Virginia. But Norfolk Southern also conducted extensive business in Pennsylvania, where it maintained thousands of miles of track, rail yards, repair shops, and thousands of employees. Since 1998, it had registered to do business in Pennsylvania.

Pennsylvania law requires a foreign corporation to register before doing business in the Commonwealth and expressly provides that registration permits Pennsylvania courts to exercise general personal jurisdiction over the corporation. Norfolk Southern argued that Pennsylvania could not constitutionally hear an unrelated claim by a Virginia plaintiff. The Pennsylvania Supreme Court agreed, holding that the registration-based jurisdiction statute violated due process because later personal-jurisdiction decisions had implicitly displaced Pennsylvania Fire Insurance Co. v. Gold Issue Mining & Milling Co. The Supreme Court vacated and remanded.

Issues

Issue #1

Whether Norfolk Southern’s registration to do business in Pennsylvania constituted consent to general personal jurisdiction in Pennsylvania courts.

Holding

Yes. Under Pennsylvania’s express statutory scheme and the facts of this case, Norfolk Southern consented to suit in Pennsylvania on any cause of action.

Reasoning

Pennsylvania required foreign corporations to register before conducting business in the Commonwealth. Its statute expressly stated that qualification as a foreign corporation was a sufficient basis for Pennsylvania courts to exercise general personal jurisdiction. Norfolk Southern registered, designated an in-state registered-office provider, and continued to maintain its registration for more than two decades.

Norfolk Southern did not dispute that it knew registration carried this jurisdictional consequence. It accepted the benefits of doing substantial business in Pennsylvania while subject to the statutory condition that it could be sued there. A controlling five-Justice position therefore treated the company’s registration as consent to personal jurisdiction, not merely as evidence that it had business contacts with Pennsylvania.

The Court emphasized that it was deciding only the scheme before it. It did not hold that every corporate-registration law, or every form of appointment of an agent for service, necessarily establishes consent to general jurisdiction. The conclusion rested on Pennsylvania’s unusually explicit statute and Norfolk Southern’s knowing compliance with it.

Issue #2

Whether Pennsylvania Fire remained controlling after International Shoe and its modern limits on general jurisdiction.

Holding

Yes. Pennsylvania Fire had not been overruled and controlled the due process question, so Pennsylvania’s exercise of jurisdiction over Norfolk Southern did not violate the Fourteenth Amendment’s Due Process Clause.

Reasoning

In Pennsylvania Fire, the Court upheld jurisdiction over a foreign insurance company that had agreed, as a condition of doing business in Missouri, to accept service in Missouri on any suit. The plaintiff and claim in that case had no relevant connection to Missouri. The Court held that the company’s consent satisfied due process.

The Court rejected the Pennsylvania Supreme Court’s conclusion that International Shoe had implicitly overruled Pennsylvania Fire. International Shoe addressed when a State may exercise jurisdiction over a corporation that has not consented to suit; it supplied an additional contacts-based route to jurisdiction. It did not eliminate traditional consent-based jurisdiction.

The Court also relied on the rule that lower courts must apply a directly controlling Supreme Court precedent unless the Supreme Court itself overrules it. Because Pennsylvania Fire directly applied, the Pennsylvania Supreme Court could not disregard it based on perceived tension with later cases such as International Shoe, Daimler, and BNSF.

A four-Justice plurality further explained that consent-based jurisdiction fit historical practice: transitory claims traditionally followed an individual wherever he could be found, and States long conditioned a foreign corporation’s access to local markets on its acceptance of suit. The controlling result, however, rested on the narrower point that Pennsylvania Fire remained binding and Norfolk Southern had consented under Pennsylvania law.

Issue #3

Whether Pennsylvania’s registration-based jurisdiction statute violates the dormant Commerce Clause.

Holding

The Court did not decide that question. It remained available for consideration on remand.

Reasoning

The Pennsylvania Supreme Court had not resolved Norfolk Southern’s dormant Commerce Clause argument, and the Supreme Court had not granted review on that issue. The Court therefore limited its decision to due process and returned the case for further proceedings.

Justice Alito stressed that the dormant Commerce Clause may be the more appropriate source of constitutional limits on a State’s attempt to require an out-of-state corporation to defend claims wholly unrelated to the forum. In his view, Pennsylvania’s rule may impose serious burdens on interstate commerce without advancing a legitimate local interest when both the plaintiff and the underlying events are outside Pennsylvania.

Concurrences

Justice Jackson

Reasoning

Justice Jackson viewed the case as straightforward not only under Pennsylvania Fire, but also under Insurance Corp. of Ireland. That decision establishes that personal jurisdiction is an individual due process right that a defendant may waive, expressly or implicitly.

Norfolk Southern voluntarily registered in Pennsylvania to obtain the benefits of conducting regular, systematic, and extensive local business. Because Pennsylvania law clearly informed registrants that registration entailed general personal jurisdiction, Norfolk Southern knowingly relinquished the jurisdictional protection it otherwise could invoke under modern general-jurisdiction doctrine.

Justice Jackson rejected the idea that general-jurisdiction cases such as Daimler controlled absent waiver. A State could not ordinarily exercise general jurisdiction over Norfolk Southern merely because of its business operations, but Norfolk Southern’s voluntary submission to Pennsylvania’s statutory condition made that counterfactual beside the point.

Justice Alito

Reasoning

Justice Alito agreed that Pennsylvania Fire controlled because its material facts closely matched this case. Both cases involved an out-of-state company conducting business under a statute understood to require consent to suit on all claims, an out-of-state plaintiff, and a claim arising outside the forum. International Shoe and its progeny, he explained, concern nonconsenting defendants and therefore did not implicitly overrule Pennsylvania Fire.

He also concluded that defending Mallory’s claim in Pennsylvania was not so fundamentally unfair as to violate due process. Norfolk Southern had extensive Pennsylvania operations, repeatedly used Pennsylvania courts itself, and had clear statutory notice that registration would be treated as consent to general jurisdiction.

Justice Alito did not join the broader portions of Justice Gorsuch’s opinion. He warned that a State’s assertion of jurisdiction over an unrelated suit may implicate federalism and interstate-commerce concerns even though a corporation’s consent defeats a personal due process objection.

In Justice Alito’s view, the dormant Commerce Clause is the likeliest constitutional constraint. Pennsylvania may be discriminating against or unduly burdening interstate commerce by making out-of-state companies accept universal litigation exposure as the price of access to its market, particularly where Pennsylvania has no meaningful local interest in an out-of-state dispute. Because that issue was not before the Court, he favored vacatur and remand.

Dissents

Justice Barrett

Reasoning

Justice Barrett argued that Pennsylvania’s law directly conflicts with the modern rule that a corporation is generally subject to suit on any claim only where it is “at home”—ordinarily, its State of incorporation and principal place of business. Norfolk Southern’s substantial operations in Pennsylvania could support specific jurisdiction for Pennsylvania-related claims, but could not support general jurisdiction over Mallory’s Ohio- and Virginia-based claim.

She rejected the majority’s characterization of registration as genuine consent. Registration is a compulsory condition of doing business, and Pennsylvania’s statute itself distinguishes registration-based jurisdiction from jurisdiction based on actual consent. Treating a company’s compliance with a State’s command as consent would let a State evade due process simply by declaring that doing business constitutes consent to general jurisdiction.

Justice Barrett also stressed the federalism component of personal jurisdiction. Pennsylvania’s assertion of power over a dispute involving a Virginia plaintiff, a Virginia corporation, and injuries allegedly sustained in Ohio and Virginia intruded on the authority of the States with genuine ties to the controversy. A defendant’s ability to waive a personal jurisdiction defense does not allow a State to demand a blanket waiver that undermines the constitutional allocation of state authority.

In her view, Pennsylvania Fire could not control after International Shoe. International Shoe rejected the older legal fictions of corporate presence and implied consent in favor of a contacts-based framework. Moreover, Pennsylvania Fire involved an express power of attorney accepting service, while Norfolk Southern’s registration papers contained no express submission to jurisdiction.

Justice Barrett distinguished Burnham’s approval of tag jurisdiction over an individual physically served in the forum. Tag jurisdiction was a deeply rooted and still widely accepted traditional practice; general jurisdiction by corporate registration was neither. By allowing States to make registration a basis for universal jurisdiction, the Court effectively undermined Daimler and Goodyear without formally overruling them. She would have affirmed the Pennsylvania Supreme Court.