Our nomination for the most intriguing case of the last Supreme Court term is Mallory v. Norfolk Southern Railway Co. Though Mallory involved a question of interest mostly to civil procedure professors and possibly their students (whether a corporation may be sued in a state where it is not a citizen but has registered to do business when the underlying events giving rise to the suit occurred in another state), it generated the most interesting division of justices of any case in the 2022-23 term. By a 5-4 vote, the Court answered that question yes, because under Pennsylvania law the corporation had “consented” to being sued on any claim by registering to do business in the state.
(Obligatory confession of error: Before oral argument, we predicted that the Supreme Court would answer this question no.)
Even if you’re a student in our Civ Pro classes, you already may be nodding off. The collection of justices who voted to apply the Pennsylvania law nevertheless should get your attention. During a term in which close cases were decided by how Chief Justice John Roberts and Justice Brett Kavanaugh would vote (compare the voting rights case with the affirmative action case), two of Court’s most conservative justices, Neil Gorsuch and Clarence Thomas, joined its two most liberal justices, Sonia Sotomayor and Ketanji Brown Jackson, in upholding the Pennsylvania law against the claim that it violated the defendant corporation’s due process rights. They were joined by Justice Samuel Alito, the third member of the Court’s most conservative bloc, who rejected the due process claim but noted in a concurrence that the law could be unconstitutional on other grounds.
The other four justices—the less conservative trio of justices (Roberts, Kavanaugh, and Amy Coney Barrett), joined by Justice Elena Kagan—dissented, agreeing with the defendant corporation that it could not be sued in Pennsylvania even though it did substantial business in the state.
In this case of both ends against the middle, what gives? Justices Thomas and Gorsuch are the Court’s most ardent originalists. Writing for the Court, Justice Gorsuch invoked precedent—specifically a 1917 Supreme Court case—buttressed by the fact that “before and after the Fourteenth Amendment’s ratification [in 1868], . . . [states] adopted statutes requiring out-of-state corporations to consent to in-state suits in exchange for the rights to exploit the local market and to receive the full range of benefits enjoyed by in-state corporations.” For the originalists, what was lawful more than a century-and-a-half ago was not only relevant, but dispositive, today.
Furthermore, Justice Gorsuch noted, an individual can be sued in a forum state if she is served there, even if she is just visiting; why should a corporation that does business in a state enjoy more protection from suit than an individual? This argument hearkens back to a time when courts described a corporation’s amenability to suit as a product of its “presence” within the state, manifested by doing business there, and provides a symmetry regarding suit based on presence for both individual and corporate defendants.
This line of reasoning surely appealed to Justices Sotomayor and Jackson. Justice Sotomayor’s vote here was consistent with her dissent in a 2017 case involving suits filed by individuals from different states against Bristol-Myers Squibb (“BMS”) in California state court. She believed that case could be brought as a nationwide suit in California. Noting that a “core concern in this Court’s personal jurisdiction cases is fairness,” Justice Sotomayor insisted “there is nothing unfair about subjecting a massive corporation to suit in a State for a nationwide course of conduct that injures both forum residents and nonresidents alike.” The other eight justices disagreed, however, holding that only plaintiffs in California who ingested BMS’s drug in that state could sue there.
Justice Jackson’s concurrence in Mallory notes that parties, including corporations, may waive their rights in various contexts (as when a defendant in a criminal case accepts a plea bargain and foregoes the right to trial by jury); waiver in this context seems no more onerous. In her view, there was no unfairness to Norfolk Southern when it consented to being sued in Pennsylvania on any claim by registering there. After all, Norfolk Southern could have elected not to do business in Pennsylvania. The views of Justices Sotomayor and Jackson are pro-plaintiff in that they give individuals suing a corporation more flexibility in deciding where to bring suit. Mallory brought them together with two of the Court’s most conservative justices—strange bedfellows, indeed.
Justice Barrett, a former civil procedure professor, wrote the dissent in Mallory. She believed the question of whether Norfolk Southern could be sued in Pennsylvania was controlled by the 1945 case of International Shoe v. Washington, a staple in every civil procedure course. Under International Shoe and its progeny, a corporation may be sued on any claim where the corporation is “at home”—clarified in later cases as essentially its state(s) of incorporation and principal place of business—or where the events giving rise to the suit occurred.
On the facts of this case, Norfolk Southern could not be sued in Pennsylvania under either theory. In making this point, another intriguing alignment of justices emerges across generations: Justice William Brennan, the liberal lion of the Court in the final decades of the last century, argued that International Shoe superseded previous bases of personal jurisdiction and established a single, coherent constitutional standard controlling all cases. Interestingly, Justice Brennan had seen that as a way of opening, not closing, courts to litigants. Justice Barrett’s view in Mallory would have had the opposite effect.
So what does Mallory tell us about the current Court? Most importantly from a practical standpoint, Mallory may significantly alter the playing field regarding where plaintiffs may sue corporate defendants. Under Chief Justice Roberts, the Court has developed a pro-business reputation, generally limiting where corporations may be sued in cases involving personal jurisdiction issues and, more generally, limiting access to the Courts. Mallory gores Roberts’ ox in that regard and delivers a victory to trial lawyers who represent plaintiffs.
Mallory also implicates two aspects of constitutional law. First, it suggests that there may be limits to originalism as an interpretive approach, as all three members of the Court’s less conservative bloc dissented. The foundation of Justice Barrett’s dissent rests on International Shoe—a twentieth-century decision based on contemporary, generalized notions of “fair play and substantial justice”—and thereby veers away from examining earlier practices and understandings as defining the modern contours of due process in this context.
Second, Mallory puts in play, at least in the personal jurisdiction context. the relevance of federalism when interpreting the Due Process Clause. Justice Gorsuch and Justice Jackson insist that the former has nothing to do with the latter. Justice Barrett, by contrast, argues—consistent with a number of recent Supreme Court cases, including the BMS case noted earlier—that state boundaries matter when evaluating personal jurisdiction. That is, state sovereignty still has a role to play in personal jurisdiction, according to the dissent. (In this regard, Barrett is a worthy successor to Justice Ruth Bader Ginsburg, another civil procedure professor who viewed International Shoe as dispositive in this area.)
What now? In Mallory, the Court left open whether the dormant Commerce Clause, raised by Justice Alito in his concurrence, could invalidate or at least limit the reach of the Pennsylvania registration-as-consent law. According to Justice Alito, “We have long recognized that the Constitution restricts a State’s power to reach out and regulate conduct that has little if any connection with the State’s legitimate interests.” It’s hard to see Norfolk Southern, a large corporation that does substantial business in Pennsylvania, prevailing on such a claim. But, depending upon the facts, a nonresident smaller company that does not do much business in a state may have a valid objection to a Pennsylvania-like statute that requires the company to consent to being sued on any claim in the state.
Finally, it remains to be seen whether other states follow the example of Pennsylvania and revise their corporate registration statutes. In the forthcoming political battle between large corporations and trial lawyers, the only certain outcome is that substantial sums will be spent in attempting to persuade state legislators to retain or revise their laws.