U.S. Supreme Court

Supreme Court OKs state's corporate consent-to-jurisdiction law, but door is ajar for future challenges

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shutterstock_Norfolk Southern train

A Norfolk Southern Railway Co. engine train in February 2017. Stephen Sachs, a professor at Harvard Law School, told the ABA Journal that a decision by the U.S. Supreme Court regarding a Pennsylvania law requiring companies to consent to personal jurisdiction in state courts if they do business there “is a very narrow decision.” Image from Shutterstock.

The U.S. Supreme Court on Tuesday upheld a Pennsylvania law that requires companies to consent to personal jurisdiction in state courts if they do business there.

The high court upheld the law in a 14th Amendment due process challenge by the the Norfolk Southern Railway Co. But a partial concurrence by Justice Samuel Alito indicates that the company may be able to challenge such laws on other grounds.

Stephen Sachs, a professor at Harvard Law School, summarized the decision in an email to the ABA Journal provided by a spokesperson.

“This is a very narrow decision, based heavily on precedent,” Sachs wrote. “On its face, it appears to recognize a broad ability of states to force out-of-state corporations into court, rejecting the Norfolk Southern railroad’s contrary argument under the due process clause. But in fact it, leaves the door wide open in future proceedings for the railroad to make a very similar challenge under the commerce clause, which Justice Alito—the key vote—indicated would be likely to succeed.”

Justice Neil Gorsuch wrote an opinion for the Supreme Court that was joined in full by Justices Clarence Thomas, Sonia Sotomayor and Ketanji Brown Jackson. Alito joined only some sections of Gorsuch’s opinion.

The Supreme Court ruled in the case of former railroad mechanic Robert Mallory, who wants to sue the Norfolk Southern Railway Co. in Pennsylvania state court for exposure to asbestos and chemicals in Ohio and Virginia that allegedly caused his cancer.

Mallory had lived in Pennsylvania for a time, but he now lives in Virginia. The Norfolk Southern Railway Co. is incorporated in Virginia and has its headquarters there.

Mallory contends that he can sue in Pennsylvania because it has track, rail yards and repair shops in the state. It also registered in Pennsylvania under the state law requiring registered companies that do business in the state to consent to personal jurisdiction in state courts.

In a section of the opinion getting the votes of five justices, Gorsuch said precedent requires a ruling for Mallory on the due process claim.

In his partial concurrence, Alito said the sole question before the Supreme Court is whether the due process clause is violated when an out-of-state corporation with substantial operations in a state complies with a registration requirement that requires consent to personal jurisdiction. He agrees with the majority that the answer is no.

Alito said he wasn’t convinced, however, that a state may assert jurisdiction over lawsuits that have no real connection to a state.

“At this point in the development of our constitutional caselaw,” Alito wrote, “the most appropriate home for these principles is the so-called dormant commerce clause.”

Alito said the Norfolk Southern Railway Co. appears to have made a commerce clause claim in the courts below, and, presumably, it can renew the claim on remand.

An attorney who spoke with Bloomberg Law agreed that Alito’s vote is key.

“It’s [a] 4-1-4 decision with Justice Alito in the middle,” said Kevin King, a partner in Covington & Burling’s appellate and Supreme Court litigation practice group. “Justice Alito, while ruling in Mallory’s favor in this case, holds out the possibility that Norfolk Southern could prevail on remand on a commerce clause theory that the other justices largely do not address.”

The case is Mallory v. Norfolk Southern Railway Co.

See also:

ABAJournal.com: “Chemerinsky: Expect momentous decisions from the Supreme Court as term ends”

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