Supreme Court Upholds Constitutionality of Consent-by-Registration Statutes

Court: Supreme Court of the United States

The U.S. Supreme Court issued a long-awaited decision June 27 on personal jurisdiction in the Robert Mallory case, holding that consent-by-registration statutes do not violate the Due Process Clause of the Fourteenth Amendment. The case arose out of a Pennsylvania state court asbestos case. 

The plaintiff Robert Mallory worked for the defendant Norfolk Southern for nearly 20 years in Ohio and Virginia. As a freight-car mechanic, he allegedly sprayed boxcar pipes with asbestos and handled other chemicals in the railroad paint shop. Mallory left the railroad and relocated to Pennsylvania prior to returning to Virginia. During this time, he was diagnosed with cancer and brought suit against Norfolk Southern in Pennsylvania state court under the Federal Employers’ Liability Act, which “creates a workers’ compensation scheme permitting railroad employees to recover damages for their employers’ negligence.”  See Mallory v. Norfolk Southern Ry., ___ US ___ (2023); Norfolk Southern R. Co. v. Sorrell, 549 U.S. 158, 165-66 (2007).  

The defendant, Norfolk Southern, contested the plaintiff’s suit on constitutional grounds. It pointed out he resided in Virginia and alleged exposure to carcinogens in Ohio and Virginia. Moreover, the company and its headquarters were both located in Virginia. Consequently, Norfolk Southern argued that any effort by a Pennsylvania state court to exercise personal jurisdiction over it would offend the Due Process Clause of the Fourteenth Amendment.  

The plaintiff countered that Norfolk Southern managed over 2,000 miles of track, operated 11 rail yards, and maintained three locomotive repair shops in Pennsylvania alone. Likewise, it was registered to do business in the state and has “regular, systematic, [and] extensive” operations there.  Mallory, ___ US at *7.  Critically, Pennsylvania law requires out-of-state companies that register to do business in the commonwealth to agree to appear in its courts on “any cause of action” against them (i.e. consent to general jurisdiction by virtue of registering to do business in the Commonwealth). See 42 Pa. Cons. Stat. § 5301(a)(2)(i), (b) (2019); see Mallory v. Norfolk S. Ry. Co., 266 A.3d 542, 564 (Pa 2021).   

The Pennsylvania Supreme Court agreed with Norfolk Southern and held the plaintiff could not invoke this law, less violate the Due Process Clause. In doing so, the Pennsylvania Supreme Court contradicted a recent Georgia Supreme Court decision to reject a similar defense argument. The U.S. Supreme Court granted certiorari to decide whether the Due Process Clause of the Fourteenth Amendment prohibits a state from requiring an out-of-state corporation to consent to personal jurisdictionin order to do business there. 

The Supreme Court relied heavily on its prior decision of Pennsylvania Fire Ins. Co. of Philadelphia v. Gold Issue Mining & Milling Co., 243 U.S. 93 (1917) (Holmes, J). In Pennsylvania Fire, the defendant insurance company sought review of a Missouri Supreme Court decision holding a similar state statute did not violate the Fourteenth Amendment. Here, the court held that suits such as these do not deny a defendant due process of law. It reasonedthat it made no difference that the plaintiff no longer lived in Pennsylvania, and that his cause of action did not accrue there. Rather, the court noted “[t]o decide the case, the Court need not speculate whether any other statutory scheme and set of facts would suffice to establish consent to suit. It is enough to acknowledge that the state law and facts fall squarely within Pennsylvania Fire’s rule.” Mallory, ___ US at *3. 

Consequently, the Supreme Court vacated and remanded the Pennsylvania Supreme Court decision and determined Norfolk Southern was subject to personal jurisdiction within the commonwealth. It held, “[i]f a precedent of this Court has direct application in a case, a lower court should follow the case which directly controls, leaving to the Supreme Court the prerogative of overruling its own decisions. This is true even if the lower court thinks the precedent is in tension with some other line of decisions.” Id. at *19; see Rodriguez de Quijas v. Shearson/American Express, Inc., 490 U.S. 477, 484 (1989). 

Read the full decision here