On June 27, 2023, in a highly anticipated ruling in the case of Mallory v. Norfolk S. Railway Co. (case number 21-1168), the United States Supreme Court upheld a unique Pennsylvania state registration law that obligates out-of-state companies to appear in Pennsylvania courts to answer any cause of action against them when the company registers to conduct business within the state.
Virginia resident Robert Mallory filed a lawsuit in Pennsylvania against his former employer, Norfolk Southern Railway, under Federal Employers’ Liabilities Act (“FELA”). Under FELA, employees are permitted to recover damages for harms allegedly suffered as a result of their employer’s negligence. In this case, Mallory alleges Norfolk Southern, his employer for 20 years, negligently exposed him to carcinogens that caused his lung cancer.
Ultimately, the Pennsylvania trial court in this matter dismissed the case, holding that the court lacked personal jurisdiction over the matter because Mallory was not injured in Pennsylvania and neither of the parties are residents of Pennsylvania. Mallory ultimately appealed to the United States Supreme Court, arguing that Pennsylvania courts have the authority to hear the case because Norfolk Southern voluntarily consented to the general jurisdiction when it registered to conduct business in Pennsylvania.
By a margin of 5-4, the Supreme Court agreed with Mallory and reversed the holding of the lower court. In support of its decision, the Supreme Court explained that Pennsylvania law requires an out-of-state corporation to register with the Department of State before it can conduct business within the state and that the law further establishes that registration constitutes a sufficient basis for Pennsylvania courts to exercise general personal jurisdiction over that corporation.
Following this decision, there may be concerns that the Supreme Court has opened the door for other states to adopt similar registration laws in the future. However, Justice Alito noted in his concurrence that Norfolk Southern could still potentially prevail on remand based on the theory that the registration law is unconstitutional under the dormant commerce clause.
And so, although we know for now that the Pennsylvania registration law will survive to fight another day, if Justice Alito’s concurring opinion serves as any indication of what’s to come, we may also conclude that the fight is far from over.