Supreme Court Upholds Pennsylvania Statute, Expanding Personal Jurisdiction over Corporations

In a significant personal jurisdiction ruling, the Supreme Court narrowly upheld a Pennsylvania statute that grants the state courts the authority to sue any company conducting business within its borders, even if the company is not physically located there and the alleged wrongdoing occurred elsewhere. This decision has far-reaching implications, as other states may follow suit and enact similar laws, enabling corporations to be sued for various claims in multiple or all states where they operate.

The majority opinion, written by Justices Clarence Thomas, Samuel Alito, Sonia Sotomayor, and Ketanji Brown Jackson and joined by Neil Gorsuch, upheld the Pennsylvania statute. The dissenting opinion was written by Chief Justice John Roberts, joined by Justices Elena Kagan, Brett Kavanaugh, and Amy Coney Barrett.

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The case originated from a complaint filed by Robert Mallory, a Virginian employee of Norfolk Southern, who alleged harm from asbestos exposure. Mallory sued Norfolk Southern in Pennsylvania, despite the company not being headquartered there, relying on the fact that Norfolk Southern had registered with the state to conduct business. This registration granted Pennsylvania courts extensive jurisdiction over the company, according to state statute.

Southern argued that the Pennsylvania statute violated the due process clause of the 14th Amendment as it subjected out-of-state businesses to the jurisdiction of the state courts in all cases. The company requested that the court dismiss Mallory's complaint. However, the Supreme Court, in its ruling, overruled the lower courts and upheld the constitutionality of the Pennsylvania statute.

The majority opinion drew upon a precedent from 1917, Pennsylvania Fire Insurance Co. of Philadelphia v. Gold Issue Mining & Milling Co., which affirmed similar Missouri legislation. The majority argued that the 1945 case International Shoe Co. v. Washington, which Norfolk Southern claimed undermined Pennsylvania Fire, actually provided an additional basis for personal jurisdiction.

Furthermore, Justice Gorsuch, writing for the majority, stated that both precedents could coexist, with Pennsylvania Fire establishing jurisdiction when a corporation consents to in-state suits by doing business in the forum, while International Shoe extended jurisdiction based on the corporation's activities and presence in the forum state.

Justice Jackson, in a concurring opinion, highlighted the 1982 case Insurance Corp. of Ireland v. Compagnie des Bauxites de Guinee, which established the possibility of waiving personal jurisdiction. She argued that Norfolk Southern had waived its right to challenge jurisdiction by registering as a foreign corporation in Pennsylvania, thereby concluding that the state legislation did not violate due process.

Justice Alito, concurring with Gorsuch, agreed that the Pennsylvania registration requirement did not violate due process. He further suggested that it might raise concerns under other constitutional provisions, such as the dormant commerce clause, which prohibits states from discriminating against interstate commerce. Alito agreed to send the case back to the state courts, solely focusing on the due process issue.

In a dissenting opinion, Justice Barrett expressed strong disagreement with the majority's decision, arguing that it contradicted 75 years of established law regarding the due process clause and personal jurisdiction. Barrett contended that the majority's ruling allowed states to bypass the traditional approach to jurisdiction by imposing registration requirements, effectively granting broad jurisdiction over corporations regardless of their ties to the state.

While this ruling raises concerns among dissenting justices, it sets a precedent that may pave the way for other states to enact similar laws, potentially subjecting corporations to litigation in numerous jurisdictions.