*Shanae T. Jones
I. Introduction
Imagine buying an air fryer in your home state of New York. One day, the air fryer explodes in your kitchen, causing significant damage. Remembering that the manufacturer operates a small factory in the neighboring state of New Jersey, you file suit against the corporation there. To your dismay, the court dismisses your suit for lack of personal jurisdiction because the corporation can only be sued in Delaware where it is incorporated,[1] in Texas where it is headquartered,[2] or in a state where there is a specific connection between the corporation’s activities within that state and your claim.[3] What recourse does the judicial system provide to you?
Precedent suggests that prosecution of this hypothetical case requires you to refile the claim in Delaware or Texas.[4] In the wake of the Supreme Court’s recent decision in Mallory v. Norfolk Southern Railway Co.,[5] however, the longstanding barrier described in the hypothetical may fade as corporations find themselves susceptible to litigation for any reason in any state where they are registered to do business. In Mallory, the Supreme Court upheld a Pennsylvania law that establishes personal jurisdiction over any out-of-state corporation registered to do business in that state.[6] By finding that consent-by-registration statutes do not offend due process,[7] the Supreme Court deviated from its corporation-centered jurisprudence in a way that could impact judicial economy and interstate commerce.
II. Personal Jurisdiction over Corporations Before Mallory
The Court’s earlier jurisprudence reveals two types of personal jurisdiction, both of which allow courts to bind an out-of-state corporation: general jurisdiction and specific jurisdiction.[8] The Court has sought to define each type of personal jurisdiction in a way that comports with the due process concerns.[9] General jurisdiction refers to a forum’s ability to decide any case or controversy involving a defendant regardless of the cause of action.[10] General jurisdiction exists when a corporation’s “affiliations with the State are so ‘continuous and systematic’ as to render them essentially at home in the forum State.”[11] Courts have found corporations “at home” for the purposes of establishing general jurisdiction in their state of incorporation and where they have their principal place of business—i.e. their headquarters.[12] Proponents of this approach note that bringing a claim in either location comports with due process because the corporation has sufficient notice that they could become subject to the jurisdiction of those states’ courts.[13] Opponents have called it a “massive gift to corporations” that limits jurisdiction to “just one or two states for most U.S. corporations.”[14] Attempts to establish general jurisdiction over an out-of-state corporation—meaning one that is neither incorporated nor headquartered in the forum state—have proven quite difficult.[15]
Alternatively, specific jurisdiction enables a court to exercise personal jurisdiction over an out-of-state corporation where the corporation has “certain minimum contacts with the state” and the dispute relates to or arises out of those contacts.[16] The development of the minimum contacts standard has afforded jurisdictional protections to out-of-state corporations by limiting where claims can be brought against them.[17]
III. Mallory Cements the Consent-Based Approach
Robert Mallory, a Virginia resident, sued Norfolk Southern, a corporation incorporated and headquartered in Virginia, in Pennsylvania state court for injuries sustained in Virginia and Ohio.[18] In response to Norfolk’s motion to dismiss for lack of personal jurisdiction, Pennsylvania’s courts ruled in favor of the corporation, finding jurisdiction improper because the consent-by-registration law did not comport with due process.[19] The Supreme Court disagreed, finding that due process is not offended where Norfolk Southern filed the registration paperwork and “appreciated the jurisdictional consequences attending its actions.”[20]
The plain language in Mallory reveals that suing a corporation “at home” is not the only way to establish general jurisdiction; rather, a corporation can consent to the general jurisdiction of the courts of other states.[21] Given the significant limitations on establishing personal jurisdiction over an out-of-state corporation in earlier jurisprudence,[22] one might consider the Court’s decision in Mallory a deviation from its practice of shielding corporate defendants. The Court, however, views the decision as more of a clarification of its personal jurisdiction jurisprudence than a broadening thereof.[23] The Mallory plurality cites Pennsylvania Fire Insurance Co. of Philadelphia v. Gold Issue Mining & Milling Co. to support the position that the consent-based approach is not new.[24] There, the Court found a consent-by-registration statute properly established personal jurisdiction over the out-of-state defendant.[25]
IV. Implications
Whether courts frame Mallory as the resurgence of a preexisting path to personal jurisdiction or the creation of a new path, the implications of states adopting consent-by-registration laws are clear. Notably, supplementing the at-home approach with the consent-based approach weakens the jurisdictional protections afforded to corporate defendants by the minimum contacts standard.[26] However, specific jurisdiction jurisprudence limits the forum choices available to a plaintiff against an out-of-state corporation in a way that creates inequities in access to the judiciary between corporations and individuals.[27] Consent-by-registration laws restore access to the courts for individuals.
Increased access to the judiciary directly affects judicial economy.[28] One foreseeable consequence of consent-by-registration laws is a rise in forum shopping amongst plaintiffs, as the increase in courts with general jurisdiction will increase choice-of-forum.[29] While courts in the United States largely disfavor forum shopping,[30] the process does not violate due process.[31] Corporations engage in forum shopping through tactics like moving their headquarters[32] and drafting forum selection clauses[33] to avoid availing themselves to litigation in unfavorable forums–a practice supported by courts.[34] In broadening choice-of-forum for individual plaintiffs, Mallory balances the scales that had previously been tilted in favor of protecting corporations.
A second foreseeable impact of Mallory on judicial economy is a spike in litigation tourism—the practice of suing an out-of-state defendant in a friendly venue without regard to connection with the forum state.[35] In Bristol-Myers Squibb Co. v. Superior Court of California, San Francisco County, the Court shot down an attempt at litigation tourism where the plaintiffs tried to sue in state court under specific jurisdiction for a matter unrelated to the defendant’s activities in that state.[36] Unlike Bristol, Mallory deals with general jurisdiction, which, by definition applies to any matter concerning the defendant without regard to connection with the forum state.[37] The plurality in Mallory found no due process concern with litigation tourism, instead stating that it has jurisprudential roots in the modern application “transitory action” or “tag jurisdiction” to individuals where “a suit could be maintained by anyone on any claim in any place the defendant could be found.”[38]
In a concurring opinion, Justice Alito raised a concern that consent-by-registration laws violate the Dormant Commerce Clause.[39] While the Court has struck down state legislation that unduly restricts interstate commerce,[40] Mallory left the question open for the Pennsylvania court to address on remand.[41]
V. Conclusions
For years, the Supreme Court’s approach to establishing personal jurisdiction over out-of-state corporations has afforded protections to corporations.[42] The Mallory decision’s resurrection of the consent-based approach paves the way for states to simultaneously increase access to the judiciary for individual plaintiffs and increase accountability for corporate defendants.[43]
*Shanae T. Jones is a third-year evening student at the University of Baltimore School of Law, where she is a Staff Editor for Law Review, a Distinguished Scholar of the Royal Graham Shannonhouse III Honor Society, and a Law Scholar for Professor Lynch’s Civil Procedure I class. In addition to being a law student, Shanae is a licensed social worker, employed in public child welfare. Shanae was a summer associate at Ballard Spahr during the summer of 2023 and looks forward to returning to the firm in the upcoming summer of 2024.
[1] See Stephen C. Yeazall et al., Civil Procedure 65 (11th ed. 2023).
[2] See id.
[3] See id. at 66.
[4] See, e.g., Daimler AG v. Bauman, 571 U.S. 117, 137 (2014).
[5] Mallory v. Norfolk S. Ry. Co., 600 U.S. 122 (2023).
[6] Mallory v. Norfolk S. Ry. Co., 600 U.S. 122 (2023).
[7] Id. at 134–36 (finding no valid due process issue).
[8] Bristol-Myers Squibb Co. v. Super. Ct. of Cal., S.F. Cnty., 582 U.S. 255, 262 (2017).
[9] Yeazall et al., supra note 1, at 5.
[10] Lea Brilmayer et al., A General Look at General Jurisdiction, 66 Tex. L. Rev. 721, 727 (1988).
[11] Goodyear Dunlop Tires Operations, S.A. v. Brown, 564 U.S. 915, 919 (2011) (quoting Int’l Shoe Co. v. State of Wash., Off. of Unemployment Comp. & Placement, 326 U.S. 310, 317 (1945)) (emphasis added).
[12] Brilmayer et al., supra note 8, at 733–34.
[13] See id.
[14] Elizabeth Pollman, The Supreme Court and the Pro-Business Paradox, 135 Harv. L. Rev. 220, 234–35 (2021).
[15] See, e.g., Goodyear Dunlop Tires Operations, 564 U.S. 915 (holding that a state may not exercise general personal jurisdiction over a foreign subsidiary of a U.S. parent corporation where the subsidiary itself lacks continuous and systematic business contacts with the state); Daimler AG v. Bauman, 571 U.S. 117 (2014) (finding no general jurisdiction where out-of-state corporation did $192 billion worth of business in the forum state).
[16] Int’l Shoe Co. v. State of Wash., Off. of Unemployment Comp. & Placement, 326 U.S. 310, 316 (1945); see also Helicopteros Nacionales de Colombia, S.A. v. Hall, 466 U.S. 408, 414 (1984).
[17] See, e.g., Bristol-Myers Squibb Co. v. Sup. Ct. of Cal., S.F. Cnty., 582 U.S. 255 (2017) (finding no specific jurisdiction where nonresident plaintiffs are harmed outside of the state); World-Wide Volkswagen Corp. v. Woodson, 444 U.S. 286 (1980) (holding that the “stream of commerce” standard does not satisfy minimum contacts for specific jurisdiction); J. McIntyre Machinery, Ltd. v. Nicastro, 564 U.S. 873 (2011) (declining to find specific jurisdiction over a foreign corporation that directed marketing at the U.S., but not at forum state); Shaffer v. Heitner, 433 U.S. 186 (1977) (stating that a state where property is located will usually have jurisdiction over claims where the property itself is the source of the underlying controversy, but having property in the state alone doesn’t satisfy minimum contacts for other claims).
[18] Mallory v. Norfolk S. Ry. Co., 600 U.S. 122, 126 (2023).
[19] Id. at 126–27.
[20] Id. at 144.
[21] Id. at 135–36, 138.
[22] See supra Part II.
[23] Mallory, 600 U.S. at 137.
[24] Id. at 131–32.
[25] Id. at 133.
[26] See id. at 147 (noting that without its consent, the defendant may be protected from the jurisdictional powers of the court).
[27] See Todd D. Peterson, Categorical Confusion in Personal Jurisdiction Law, 76 Wash. & Lee L. Rev. 655, 762 (2019).
[28] See David M. Axelrod, The Importance of Judicial Economy, Daily J. (May 7, 2021), https://www.dailyjournal.com/mcle/942-the-importance-of-judicial-economy (noting that judicial economy is more important as caseloads increase).
[29] See generally, Forum Shopping Reconsidered, Note, 103 Harv. L. Rev. 1677, 1677 (1990) (defining “forum shopping”).
[30] Id.
[31] See Mallory, 600 U.S. at 154 (Alito, J., concurring) (“[W]e have never held that the Due Process Clause protects against forum shopping.”).
[32] Patrick Mullinger, The Mall of Litigation: The Dangers and Benefits of Forum Shopping in American Jurisprudence, UCLA L. Rev. (Nov. 17, 2021), https://uclawreview.org/2021/11/17/the-mall-of-litigation-the-dangers-and-benefits-of-forum-shopping-in-american-jurisprudence/#_ftn23.
[33] See generally Symeon C. Symeonides, What Law Governs Forum Selection Clauses, 78 La. L. Rev. 1119, 1120 (2018) (defining “forum selection clause” as . . .).
[34] See David K. Duffee, et al., Keeping Current: U.S. Supreme Court Reaffirms that Forum-Selection Clauses Are Presumptively Enforceable, Am. Bar Assoc. https://www.americanbar.org/groups/business_law/resources/business-law-today/2014-january/keeping-current-u-s-supreme-court/.
[35] Mary A. Mellow, et al., Supreme Court Strikes Another Blow to Litigation Tourism in Bristol-Myers Squibb, Def. Counsel J. April 2018, at 1, 2.
[36] Bristol-Myers Squibb Co. v. Sup. Ct. of Cal., S.F. Cnty., 582 U.S. 255, 258 (2017).
[37] See supra note 10 and accompanying text.
[38] Mallory v. Norfolk S. Ry. Co., 600 U.S. 122, 128–29 (2023).
[39] Id. at 157–60 (Alito, J. concurring).
[40] See, e.g., City of Phila. v. New Jersey, 437 U.S. 617, 628 (1978).
[41] Id. at 150 (Alito, J. concurring).
[42] See supra Part II.
[43] See supra Part IV.
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