Pennsylvania Supreme Court Rules Part of Jurisdictional Statute Unconstitutional, Taking Forum Shopping Tool Out of Plaintiffs’ Toolkit
Mallory v. Norfolk Southern Railway Co., 3 EAP 2021, Pa. Supreme Court, December 22, 2021.
Philadelphia County is well-known in legal circles as leaning strongly pro-plaintiff, routinely appearing on the American Tort Reform Foundation’s annual list of the worst “Judicial Hellholes” for defendants. Plaintiffs often flock to Philadelphia, aided by Pennsylvania’s liberal rules regarding venue and jurisdiction. In a decision issued on December 22, the Pennsylvania Supreme Court has ruled that a portion of the Pennsylvania jurisdictional statute is unconstitutional, taking a forum shopping tool out of the plaintiffs’ bar’s toolkit.
Though jurisdiction is typically proper against a corporate defendant in its home state and in the state where the cause of action arose, Pennsylvania’s statutory scheme allowed a much broader assertion of jurisdiction. Any corporate defendant who was registered to do business in Pennsylvania could be sued here, no matter where the company was located or where the cause of action arose, on the theory that registration to do business constituted “consent” to be sued here.
The Mallory decision provides a perfect example of the absurd results this statute generated. In Mallory, a Virginia resident sued a Virginia railway corporation, alleging he had been exposed to asbestos while working for the defendant in Ohio and Virginia. Suit was filed, of course, in Philadelphia, Pennsylvania, on the basis that the defendant railway company was registered to do business in Pennsylvania.
Defendants have long objected to this basis for jurisdiction as unconstitutional, and now the Supreme Court has agreed. In the Mallory decision, the Pennsylvania Supreme Court unanimously held that the “consent-by-registration” theory was unconstitutional and that mere registration to do business in Pennsylvania was insufficient to justify the assertion of personal jurisdiction over a defendant.
The Mallory court found that premising jurisdiction on registration to do business violated defendants’ due process rights. Further, any purported “consent” could not be voluntary, inasmuch as registration is mandatory before a company can do business within the Keystone State.
This decision brings Pennsylvania in line with most state courts to rule on the issue and with jurisdictional limitations imposed in recent decisions of the U.S. Supreme Court. From now on, plaintiffs will only be able to sue a corporate defendant in Pennsylvania if the defendant is at home here, or if it has relevant, case-specific connections to this state. While the Mallory decision will not put an end to every type of forum shopping, it will put an end to some of the worst of it.
*Michael Salvati is a shareholder in our Philadelphia, PA office. He can be reached at MASalvati@mdwcg.com or (215) 575-4552.
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