Do Corporate Registration Statutes Constitute Consent to State Court Personal Jurisdiction in Violation of Fourteenth Amendment Due Process?

Abstract

This article addresses the Supreme Court’s consideration of Robert Mallory v. Norfolk Southern Railway Co., to be argued on November 8, 2022.  This appeal from Pennsylvania Supreme Court addresses whether the Fourteenth Amendment Due Process Clause prohibits a state from requiring that non-resident corporations register to do business in the state, thereby subjecting the corporation to the state’s personal jurisdiction. The Court will address whether Pennsylvania’s corporate registration statute, coupled with its long arm statute, violates the Fourteenth Amendment Due Process Clause by automatically conferring personal jurisdiction over non-resident businesses sued in Pennsylvania. 

The Pennsylvania Supreme Court affirmed the trial court’s dismissal for lack of personal jurisdiction, holding that the railroad’s corporate registration was not a sufficient basis to confer personal jurisdiction. The court concluded that Pennsylvania’s foreign corporation registration requirement to do business in the state did not constitute voluntary submission to jurisdiction. Instead, Pennsylvania’s statutes compelled and coerced foreign corporations to submit to jurisdiction by legislative command. The Pennsylvania Supreme Court concluded that the Supreme Court’s recent decision in Daimler AG v. Bauman (2014) and Goodyear Dunlop Tires Operations S.A. v. Brown (2011) dramatically altered the concept of general jurisdiction; Norfolk Southern was not “at home” in Pennsylvania. Therefore, a Pennsylvania court could not subject a foreign corporation to general all-purpose jurisdiction based exclusively on the fact that it conducted business in the state.

Mallory’s appeal focuses the Court on whether in the post-International Shoe era, state corporate registration statutes can consistently with due process confer consent to personal jurisdiction by non-resident defendants who wish to conduct business in the state. Since the mid-nineteenth century, twenty states had enacted such statutes. Today, all fifty states and the District of Columbia have corporate registration statutes as a condition of doing business in the state. The Court has never reviewed whether state corporate registration statutes violate defendants’ Fourteenth Amendment due process protections by mandating consent because of registering to do business in the state. 

Mallory’s core argument relies on Burnham v. Superior Court (1990), contending that the long historical pedigree of consent-by-registration statutes supports the constitutionality of the Pennsylvania statute. In response, Norfolk Southern argues that the Court’s decision in International Shoe effected a sea change in personal jurisdiction jurisprudence that made registration-jurisdiction obsolete. The railroad contends that Mallory “ignores International Shoe, relies on the wrong framing, and misrepresents how the ratification-era laws applied.”