Here’s a question that a law school student might find on a final exam: When can a State exercise “general personal jurisdiction” over a corporate defendant? Until this week, the answer seemed clear: only in a State where a company is incorporated or its principal place of business is located. But a new 5 to 4 Supreme Court decision, Mallory v. Norfolk Southern Railway Co., has muddled the answer, and in a way that many companies will find both baffling and troubling.
According to Justice Alito’s majority opinion in Mallory, a corporate defendant can be sued in any State that requires out-of-state corporations to consent to the State’s personal jurisdiction in order to register to do business in that State. This means that in any such State, Pennsylvania for example, an out-of-state plaintiff can sue an out-of-state company for personal injuries that occurred out-of-state.
In recent years the Supreme Court has issued a series of opinions clarifying the circumstances under which a State can exercise either “general personal jurisdiction” or “case-specific personal jurisdiction” over a corporate defendant. According to Justice Gorsuch, these precedents and Mallory (which reaffirms a century-old opinion) “sit comfortably side by side.” Justice Barrett’s dissenting opinion disagrees, describing Mallory as a “sea change.”
In a separate opinion, Justice Alito concurred with the majority but expressed the view that state “consent by registration” statutes are vulnerable to constitutional attack under the Commerce Clause.
What is clear is that Mallory will immediately, and significantly, increase “forum shopping” by the plaintiffs’ personal injury bar. These contingency-fee attorneys will gravitate to plaintiff-friendly “consent by registration” States. And more and more plaintiff-friendly States will take advantage of Mallory by enacting legislation specifying that a company consents to a State’s general personal jurisdiction as a condition for doing business in the State.
Consent by registration may become the norm, and as a practical matter, render the Court’s previous, finely tuned personal jurisdiction case law, to use Justice Barrett’s words, superfluous of obsolete.
Read more: Amicus Brief Urges Supreme Court To Overrule Century-Old Precedent On General Personal Jurisdiction Over Corporate Defendants