Professor Alan Morrison of George Washington University Law School writes that the Supreme Court’s decision was a victory for plaintiffs’ ability to choose where they sue a company and for stare decisis, but the court left a pathway for businesses to challenge jurisdiction.
In Mallory v. Norfolk Southern Railway Co., the US Supreme Court, by a vote of 5-4, upheld the power of states to assert personal jurisdiction over a non-resident corporation that had registered to do business in the state, even for claims that have no connection with the state.
Much to the surprise of many observers (including this writer), the majority declined to overturn the century-old decision in Pa. Fire Ins. Co. of Phila. v. Gold Issue Mining & Milling Co., finding both that it was supported by prior cases and that it had not been undermined by more recent personal jurisdiction decisions of the court. In adhering to precedent absent extraordinary circumstances, known as stare decisis, the Mallory court did not follow its path in several recent cases, most prominently in its Dobbs abortion decision last June.
The majority even scolded the Pennsylvania Supreme Court for deciding whether Pa. Fire was still good law: A lower court should follow Supreme Court precedent even if it “thinks the precedent is in tension with ‘some other line of decisions.’”
Consent Enough
The majority opinion, written by Justice Neil Gorsuch, made clear that, at least in cases like this, where the defendant had a substantial presence in the state, signing a form agreeing to accept service in the state satisfied due process.
Gorsuch observed that the company had the choice of not doing business in the state, but it decided that the benefits outweighed the downsides, including consenting to be sued in the state for claims that would not otherwise satisfy specific jurisdiction.
The dissent, written by Justice Amy Coney Barrett and joined by Chief Justice John Roberts and Justices Elena Kagan and Brett Kavanaugh, saw the use of consent as a fiction that would enable states to create an easy end-run on the limits of general jurisdiction, even for cases where the claim is wholly unrelated to the forum state.
Focus on Fairness
One of the features of Gorsuch’s opinion, joined fully by Justices Clarence Thomas, Sonia Sotomayor, and Kentanji Brown Jackson, was his focus on fairness as an element of due process.
His discussion included the “tag” jurisdiction case of Burnham v. Superior Court. He argued that, if it was fair to require Burnham to defend against his wife’s divorce in California, where he had been only briefly when served, it was surely fair to require Norfolk Southern, with its major presence in Pennsylvania, where it regularly sues and is sued, to defend this claim there.
Hope for Businesses
The majority did not leave companies in this situation with no hope. In footnote three, the court declined to reach Norfolk’s alternative argument that asserting jurisdiction here would violate the dormant commerce clause, but recognized that the issue would be open on remand.
Justice Samuel Alito concurred with the decision to vacate the ruling below and also wrote almost 10 pages explaining why the dormant commerce clause was a more proper defense against unreasonable assertions of personal jurisdiction by the states.
Although the dissent made no mention of the dormant commerce clause, its concerns about expanding the reach of state courts may well lead some or perhaps all of the dissenters to fall back on that clause in cases like this.
And, for what it is worth, the amicus brief that I filed in this case argued at length that the dormant commerce clause, rather than due process, was the proper basis to protect businesses from states that permitted unreasonable forum shopping.
Unusual Vehicle
An unusual feature of Mallory is that there was no obvious forum shopping involved, which is a common feature in personal jurisdiction cases. The plaintiff claimed that he had contracted cancer while working for the railroad in Ohio and Virginia. Then he moved to Pennsylvania, while still with the railroad, but not in a job that exposed him to substances that may have caused his cancer.
The record is not entirely clear, but he seems to have had his cancer diagnosed in Pennsylvania. If that is correct, he may also have found a lawyer in Pennsylvania to represent him there. The case was filed in a Pennsylvania state court because Pennsylvania is where the lawyer practices, even though by then, Mallory had moved back to Virginia.
There is no indication that Pennsylvania was chosen to gain any advantage for the plaintiff or that Mallory’s lawyer thought that consent jurisdiction was legally problematic, but suing in Pennsylvania was worth the risk. And surely Mallory’s lawyer never thought that the case would reach the US Supreme Court because the Pennsylvania Supreme Court took it on its own to conclude that a 1917 US Supreme Court decision had been implicitly overruled.
Despite its unexpected path to the high court, the case strengthens plaintiffs’ ability to sue companies in the forum of their choice, and provides a surprise boost to the beleaguered doctrine of stare decisis.
The case is Mallory v. Norfolk S. Railway Co., U.S., No. 21-1168, opinion.
This article does not necessarily reflect the opinion of Bloomberg Industry Group, Inc., the publisher of Bloomberg Law and Bloomberg Tax, or its owners.
Author Information
Alan B. Morrison is an associate dean at George Washington University Law School, where he teaches civil procedure and constitutional law.
He was counsel for four law professors (including himself), who filed an amicus brief in Mallory that formally supported neither side, but made arguments that would generally be favorable to plaintiffs.
Write for Us: Author Guidelines
Learn more about Bloomberg Law or Log In to keep reading:
Learn About Bloomberg Law
AI-powered legal analytics, workflow tools and premium legal & business news.
Already a subscriber?
Log in to keep reading or access research tools.