In a split 5-4 decision the U.S. Supreme Court recently overturned a Pennsylvania Supreme Court ruling regarding the state’s “jurisdiction by consent” statute, in the process opening the flood gates for more out-of-state plaintiffs to bring suit in high-verdict jurisdictions.
By way of background, Pennsylvania’s “jurisdiction by consent” statute requires every company that registers to do business in the state to consent to the jurisdiction of Pennsylvania courts. In Mallory v Norfolk Southern, the plaintiff (Mallory) resided in Virginia and filed an injury suit against Norfolk Southern in Pennsylvania, despite the company being headquartered in Virginia. Pennsylvania had no connection with the case as the injury occurred elsewhere.
At the state level, the Pennsylvania Supreme Court correctly ruled that this statute was unconstitutional, and that Pennsylvania was not the correct jurisdiction for the case because it conflicted with several U.S. Supreme Court cases that require a company to be “at home” in a state for the state to have jurisdiction. The case ultimately went all the way up to the U.S. Supreme Court, where PCCJR filed an amicus brief in support of the Pennsylvania Supreme Court’s decision. Unfortunately, despite precedent set in several cases stating otherwise, the U.S. Supreme Court vacated the state court’s ruling on appeal. The four dissenting justices cautioned that the ruling paved the way for states to “enact a law making (corporate) registration sufficient for suit on any cause.” A deeper dive into the impact of the Supreme Court’s ruling can be found in this JD Supra article, this legal write-up, and this Federalist Society blog post.
The Mallory case is now remanded back to the state court.