The Supreme Court decided the closely watched jurisdictional case, Mallory v. Norfolk S. Ry. Co., 600 U.S. 122, 143 S. Ct. 2028, 216 L. Ed. 2d 815 (2023). In a series of decisions, the Court has sought to clarify the issues of personal jurisdiction (where a defendant can be sued), and the concepts of both general and specific jurisdiction. In Goodyear Dunlop Tires Operations, S.A. v. Brown, 564 U.S. 915 (2011), the Supreme Court explained that a court may only assert general jurisdiction over foreign corporations where “their affiliations with the [forum] State are so ‘continuous and systematic’ as to render them essentially at home” there. Id. at 919. In Daimler AG v. Bauman, 571 U.S. 117, 139 (2014), the Court later clarified that the general jurisdiction inquiry concerns whether that corporation’s “affiliations with the State are so ‘continuous and systematic’ as to render [it] essentially at home
in the forum State.” After Goodyear and Daimler, it was recognized that general jurisdiction will usually not obtain in a “forum other than the place of incorporation or principal place of business.” E.g., Monkton Insurance Services., Ltd. v. Ritter, 768 F.3d 429, 432 (5th Cir. 2014).
Mallory appears to throw a monkey wrench into these notions, and seems like a step backwards on the Court’s effort to curtail blatant forum shopping. But the decision does not reverse the recent case law, and rather makes an end-around. Consenting to jurisdiction – voluntarily waiving one’s due process rights – is an independent basis for jurisdiction. See Brady v. United States, 397 U.S. 742, 748
(1970) (observing that waivers of constitutional rights must be voluntary, knowing, and intelligent). After the roadblocks of Daimler, plaintiffs increasingly argued that corporate defendants had consented to general jurisdiction based on their compliance with a state’s mandatory business registration statute. Virtually every state has some form of business registration law, often covering such things as fictitious names, service of process, and, often, consent to jurisdiction in the state’s courts. Generally, the argument goes, by registering or qualifying to do business in a state or appointing an agent for service of process, a company has expressly or impliedly consented to general jurisdiction. The contrary view is that it would violate the Due Process Clause to construe a foreign corporation’s compliance with a state’s mandatory registration statute as voluntary consent. In light of the Supreme Court’s repeated admonishment that due process prohibits a state from claiming general jurisdiction over every corporation doing business within its borders, it logically follows that the Due Process Clause also
prohibits a state from forcing every corporation doing business within its borders to consent to general jurisdiction. Only voluntary consent or affiliations within the state that are so continuous and systematic as to render the foreign corporation essentially at home in the state will suffice.
Four Justices agreed that this statute “clearly, palpably, and plainly violates the Constitution.” And they rejected the attempt to make the jurisdictional issue solely about consent rather than contacts, because a company could theoretically be forced to “consent” and still not have minimal contacts, a principal place of business, or be the place of incorporation in the state. In this way, said the dissent, Mallory’s theory would gut Daimler. And it made no sense to suggest the Court already decided this question in a pre-International Shoe precedent: Pennsylvania Fire Ins. Co. of Philadelphia v. Gold Issue Mining & Milling Co., 243 U.S. 93, 37 S.Ct. 344, 61 L.Ed. 610 (1917).
An unlikely majority of Justices Gorsuch, Thomas, Alito, Sotomayor and Jackson (on parts of the opinion), found the issue controlled by Pennsylvania Fire Ins. Co. of Philadelphia v. Gold Issue Mining & Milling Co., 243 U.S. 93, 37 S.Ct. 344, 61 L.Ed. 610. The Pennsylvania law at issue here provided that an out-of-state corporation “may not do business in this Commonwealth until it registers with” the Department of State. 15 Pa. Cons. Stat. § 411(a). Among other things, Pennsylvania law is explicit that “qualification as a foreign corporation” shall permit state courts to “exercise general personal jurisdiction” over a registered foreign corporation, just as they can over domestic corporations. 42 Pa. Cons. Stat. § 5301(a)(2). And, importantly, this did not violate due process.
Importantly, Justice Alito went on to observe that a state’s assertion of jurisdiction over lawsuits with no real connection to the state may violate fundamental principles that are protected by one or more constitutional provisions or by the very structure of the federal system that the Constitution created. At this point in the development of our constitutional case law, the most appropriate home for these principles is the so-called dormant Commerce Clause. Id. at 150.
While the notion that the Commerce Clause restrains States has been the subject of “thoughtful critiques,” the concept is “deeply rooted in our case law,” Tennessee Wine, 588 U. S., at ––––, 139 S.Ct., at 2460, and vindicates a fundamental aim of the Constitution: fostering the creation of a national economy and avoiding the every-State-for-itself practices that had weakened the country under the Articles of Confederation. See Hughes v. Oklahoma, 441 U.S. 322, 325–326, 99 S.Ct. 1727, 60 L.Ed.2d 250 (1979); Healy v. Beer Institute, 491 U.S. 324, 335–336, 109 S.Ct. 2491, 105 L.Ed.2d 275 (1989). The Framers “might have thought [that other provisions] would fill that role,” but “at this point in the Court’s history, no *158 provision other than the Commerce Clause could easily do the job.” Tennessee Wine, 588 U. S., at ––––, 139 S.Ct., at 2460. Justice Alito went on to say, in its negative aspects, the Commerce Clause serves to “mediate [the States’] **2052 competing claims of sovereign authority” to enact regulations that affect commerce among the States. National Pork Producers Councilv.Ross, 598 U. S. ––––, ––––, 143 S.Ct. 1142, 1156–1157, ––– L.Ed.2d –––– (2023). The doctrine recognizes that “one State’s power to impose burdens on … interstate market[s] … is not only subordinate to the federal power over interstate commerce, but is also constrained by the need to respect the interests of other States.” BMW of North America, Inc. v. Gore, 517 U.S. 559, 571, 116 S.Ct. 1589, 134 L.Ed.2d 809 (1996) (citing Gibbons v. Ogden, 9 Wheat. 1, 194–196, 6 L.Ed. 23 (1824)). It is especially appropriate to look to the dormant Commerce Clause in considering the constitutionality of the authority asserted by Pennsylvania’s registration scheme. Because the right of an out-of-state corporation to do business in another State is based on the dormant Commerce Clause, it stands to reason that this doctrine may also limit a State’s authority to condition that right. See Granholm v. Heald, 544 U.S. 460, 472, 125 S.Ct. 1885, 161 L.Ed.2d 796 (2005); H. P. Hood & Sons, Inc. v. Du Mond, 336 U.S. 525, 539, 69 S.Ct. 657, 93 L.Ed. 865 (1949).
Look for this issue to be the next hot battleground in the personal jurisdiction fight as plaintiffs try to forum shop.