Plaintiffs Try To Find Loopholes In Landmark Mallory Decision – Trials & Appeals & Compensation


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The Supreme Court of Pennsylvania in Mallory v. Norfolk
Southern Railway Co.
(2021) modernized Pennsylvania’s
personal jurisdiction law when it declared unconstitutional the
Commonwealth’s statute requiring foreign corporations
registering to do business in Pennsylvania to consent to general
personal jurisdiction there.* The court held that, in light of the
U.S. Supreme Court’s Daimler and Goodyear
line of cases, “a foreign corporation’s registration to do
business in the Commonwealth does not constitute voluntary consent
to general [personal] jurisdiction but, rather, compelled
submission to general jurisdiction by legislative
command.”

Plaintiffs’ attorneys have long used this statute as a tool
to drag defendants into Philadelphia’s reputedly
plaintiff-friendly trial courts, even for alleged actions having no
connection to Pennsylvania. And they will not easily give up that
tool. Already plaintiffs are looking for a loophole to keep a
pipeline of cases flowing to Pennsylvania’s courts. The
difficulty that plaintiffs face is that Mallory is
unequivocal and leaves them little room to maneuver.

As of this writing, there do not appear to be any major
decisions interpreting Mallory. But recent reports state
that plaintiffs’ initial approach to limit Mallory is
to assert that defendants who merely engage in interstate commerce
and have registered to do business in Pennsylvania have therefore
voluntarily consented to general jurisdiction because the statute
does not require registration in such cases. This argument grows
out of Mallory‘s analysis that the interstate
exception did not apply in that case because the plaintiff conceded
that Norfolk Southern conducted both intrastate and interstate
business. Thus, the court held that the exception to registration
applied to those registered foreign companies that conduct only
interstate business.

This may be a Hail Mary for plaintiffs. Mallory makes
clear that the statute requires a company doing any
intrastate business to register. It is unlikely that a defendant
would not conduct intrastate business and merely pass through
Pennsylvania. Even primarily interstate businesses – such as
airlines or railroads – would have some intrastate operations
that require registration. Absent a showing of an extraordinary
occurrence where a company registered in Pennsylvania only to
conduct interstate business, it is unlikely that Pennsylvania’s
courts will carve out such an exception.

The plaintiff in Mallory has petitioned for certiorari
in the U.S. Supreme Court. We will continue to monitor and report
on plaintiff’s cert petition and any post-Mallory
decisions and interpretations.

* The Aviation Group previously reported on the Mallory
decision in our December 24, 2021 client alert: “Pennsylvania Supreme Court Holds that Requiring
Consent to Personal Jurisdiction in Order to Do Business in
Pennsylvania Violates Due Process
.”

The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.

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