When International Shoe Doesn't Fit: Personal Jurisdiction After Mallory v. Norfolk Southern

4 min

Every first-year law student learns two ways that a court can have jurisdiction over a corporate defendant. If the defendant has "minimum contacts" with a state, and the plaintiff's injuries arise out of those contacts, then that state's courts can assert specific jurisdiction. On the other hand, a court can assert general jurisdiction in any state where a corporation is incorporated or headquartered, regardless of where the plaintiff's injury occurs.

At least, that's what first-year law students used to learn.

In Mallory v. Norfolk Southern Railway Co., the Supreme Court made it easier for corporations to be hauled into court in states with no connection to the plaintiff or the injury. In a fractured decision, the Court reaffirmed the result in Pennsylvania Fire Insurance Co. of Philadelphia v. Gold Issue Mining & Milling Co., upholding a statute that subjected out-of-state companies registered to conduct business in Pennsylvania to general personal jurisdiction.

Mallory complained that his former employer, Norfolk Southern, exposed him to harmful chemicals. When he filed the suit, Mallory did not live in Pennsylvania. Nor did the company ever employ him in Pennsylvania. And while Norfolk Southern had extensive operations in Pennsylvania, it was not incorporated or headquartered there.

Even though the usual grounds for specific and general jurisdiction were absent, Mallory said that Norfolk Southern had consented to suits in Pennsylvania when it registered to do business there. And Pennsylvania's statute did require out-of-state companies to consent to Pennsylvania's jurisdiction for "any cause of action." But Norfolk Southern argued that, under the Supreme Court's 1945 decision in International Shoe v. Washington, the Pennsylvania statute's consent requirement infringed the company's constitutional right to due process. As Norfolk Southern saw it, International Shoe allowed for specific or general jurisdiction, not statutorily imposed consent.

The Supreme Court disagreed. Rather than relying on International Shoe, as a first-year law student might be taught, the Court turned to its earlier decision in Pennsylvania Fire. There, the Court explained, it had upheld a Missouri statute similar to Pennsylvania's. That holding was enough to establish that a company can accept a state's jurisdiction when it registers to do business, waiving its right to object under the Constitution. So even if a plaintiff who doesn't live in Pennsylvania sues a company for an injury not suffered in Pennsylvania, the Pennsylvania courts can still hear the case.

The Court's decision in Mallory leaves the landscape of personal jurisdiction uncertain. But there are a few key issues to watch going forward:

More states adopting similar registration statutes

Pennsylvania is now the only state with a statute that expressly requires out-of-state corporations to consent to general personal jurisdiction when registering to do business. Georgia's judicial precedent creates a similar regime. Could Mallory encourage more states to adopt Pennsylvania's scheme, which may allow states to exert more regulatory authority? If so, would adopting these Pennsylvania-style rules lead to some businesses leaving? Eight states filed an amicus brief arguing that Pennsylvania's law was unconstitutional, which suggests that those states would welcome any businesses that want to relocate.

The dormant Commerce Clause

While Justice Alito voted with the majority in Mallory, his concurrence hints that the decision's impact may be short-lived. In Justice Alito's view, the Pennsylvania statute might run afoul of the dormant Commerce Clause by placing an undue burden on interstate commerce and creating too much unpredictability for businesses. But since the dormant Commerce Clause was not raised in Mallory, the question is still open.

Future of minimum contacts

The majority in Mallory did not overrule International Shoe's approach to specific jurisdiction. But Justice Barrett's dissent argued that its reasoning would allow states to avoid specific jurisdiction requirements. If so, plaintiffs might start to ignore specific jurisdiction, meaning that more suits could be brought away from the place where the injury occurred.

In the uncertain post-Mallory world, Venable's team of experienced litigators can offer advice about corporate registration statutes, minimum contacts under the traditional personal jurisdiction analysis, and the dormant Commerce Clause.