The Supreme Court of Pennsylvania in Mallory v. Norfolk Southern Railway Co. (2021) modernized Pennsylvania's personal jurisdiction law when it declared unconstitutional the Commonwealth's statute requiring foreign corporations registering to do business in Pennsylvania to consent to general personal jurisdiction there.* The court held that, in light of the U.S. Supreme Court's Daimler and Goodyear line of cases, "a foreign corporation's registration to do business in the Commonwealth does not constitute voluntary consent to general [personal] jurisdiction but, rather, compelled submission to general jurisdiction by legislative command."
Plaintiffs' attorneys have long used this statute as a tool to drag defendants into Philadelphia's reputedly plaintiff-friendly trial courts, even for alleged actions having no connection to Pennsylvania. And they will not easily give up that tool. Already plaintiffs are looking for a loophole to keep a pipeline of cases flowing to Pennsylvania's courts. The difficulty that plaintiffs face is that Mallory is unequivocal and leaves them little room to maneuver.
As of this writing, there do not appear to be any major decisions interpreting Mallory. But recent reports state that plaintiffs' initial approach to limit Mallory is to assert that defendants who merely engage in interstate commerce and have registered to do business in Pennsylvania have therefore voluntarily consented to general jurisdiction because the statute does not require registration in such cases. This argument grows out of Mallory's analysis that the interstate exception did not apply in that case because the plaintiff conceded that Norfolk Southern conducted both intrastate and interstate business. Thus, the court held that the exception to registration applied to those registered foreign companies that conduct only interstate business.
This may be a Hail Mary for plaintiffs. Mallory makes clear that the statute requires a company doing any intrastate business to register. It is unlikely that a defendant would not conduct intrastate business and merely pass through Pennsylvania. Even primarily interstate businesses – such as airlines or railroads – would have some intrastate operations that require registration. Absent a showing of an extraordinary occurrence where a company registered in Pennsylvania only to conduct interstate business, it is unlikely that Pennsylvania's courts will carve out such an exception.
The plaintiff in Mallory has petitioned for certiorari in the U.S. Supreme Court. We will continue to monitor and report on plaintiff's cert petition and any post-Mallory decisions and interpretations.
* The Aviation Group previously reported on the Mallory decision in our December 24, 2021 client alert: "Pennsylvania Supreme Court Holds that Requiring Consent to Personal Jurisdiction in Order to Do Business in Pennsylvania Violates Due Process."
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