In a fractured ruling that may invite a future constitutional challenge, the U.S. Supreme Court upheld by 5–4 a unique Pennsylvania law that requires companies to face litigants in its state courts when they register to do business in the state.
Pennsylvania is reportedly the only state with this kind of law.
The court vacated the judgment of the Supreme Court of Pennsylvania and remanded the case to that court, directing it to take a second look at a lawsuit a former Norfolk Southern Railway Co. employee brought against the company in a state where it isn’t based.
Robert Mallory worked for Norfolk Southern as a freight car mechanic for almost 20 years, first in Ohio, then in Virginia. During his time with the company, he was responsible for spraying boxcar pipes with asbestos and handling chemicals in the railroad’s paint shop, he said. He also demolished car interiors that, he claimed, contained carcinogens, according to a court summary.
After Mr. Mallory left the company, he moved to Pennsylvania for a time before returning to Virginia. Along the way, he was diagnosed with cancer, which he blamed the company for. He hired lawyers in Pennsylvania to sue his former employer in Pennsylvania state court under the Federal Employers’ Liability Act. The statute created a workers’ compensation system allowing railroad employees to recover damages for employers’ negligence.
Norfolk Southern resisted the lawsuit on constitutional grounds. By the time he filed his complaint, the company noted, Mr. Mallory lived in Virginia. His complaint alleged that he was exposed to carcinogens in Ohio and Virginia. Meanwhile, the company itself was incorporated in Virginia and had its headquarters there.
The company argued this meant that any effort by a Pennsylvania court to exercise personal jurisdiction over it would offend the due process clause of the 14th Amendment to the U.S. Constitution.
Consenting to be Sued?
Mr. Mallory countered that the company manages more than 2,000 miles of track, operates 11 railyards, and runs three locomotive repair shops in Pennsylvania and that the company registered to do business in Pennsylvania in light of its “regular, systematic, [and] extensive” operations there.This is important because Pennsylvania requires out-of-state companies that register to do business in the state to agree to appear in its courts on “any cause of action” against them. This meant that the company had consented to be sued in Pennsylvania on claims just like this one, Mr. Mallory argued.
Justices Clarence Thomas, Samuel Alito, Sonia Sotomayor, and Ketanji Brown Jackson joined Part I of Mr. Gorsuch’s opinion, which lays out the facts of the case; and Part III-B, which states that the 1917 precedent of Pennsylvania Fire Insurance Co. Philadelphia v. Gold Issue Mining and Milling Co. controls the case.
In the Pennsylvania Fire decision, the U.S. Supreme Court “unanimously held that laws such as Pennsylvania’s comport with the Due Process Clause.”
Mr. Thomas, Ms. Sotomayor, and Ms. Jackson joined Part II, Part III-A, and Part IV. Part II and Part III-A discuss the Pennsylvania Fire ruling and Part IV discusses why the Supreme Court of Pennsylvania couldn’t overrule that decision.
Ms. Jackson filed a separate concurring opinion.
Mr. Alito filed an opinion concurring in part and concurring in the judgment.
He wrote he agreed with the court that the due process clause isn’t violated “when a large out-of-state corporation with substantial operations in a State complies with a registration requirement that conditions the right to do business in that State on the registrant’s submission to personal jurisdiction in any suits that are brought there.”
“Assuming that the Constitution allows a State to impose such a registration requirement, I see no reason to conclude that such suits violate the corporation’s right to ‘fair play and substantial justice,’” he wrote, citing International Shoe Co. v. Washington (1945).
Future Challenge
He left the door open to a future constitutional challenge.“A State’s assertion of jurisdiction over lawsuits with no real connection to the State may violate fundamental principles that are protected by one or more constitutional provisions or by the very structure of the federal system that the Constitution created.”
Attorney Kevin King of Covington and Burling in Washington told Bloomberg Law that Mr. Alito was the swing voter in the case.
“It’s [a] 4-1-4 decision with Justice Alito in the middle,” Mr. King said.
“He gives the fifth vote to reverse, or more accurately vacate the Pennsylvania Supreme Court’s decision, so Mallory prevails at least for now. But 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.”
Justice Amy Coney Barrett wrote a dissenting opinion, which was joined by Chief Justice John Roberts, along with Justices Elena Kagan and Brett Kavanaugh.
“Permitting Pennsylvania to impose a blanket claim of authority over controversies with no connection to the Commonwealth intrudes on the prerogatives of other States—domestic and foreign—to adjudicate the rights of their citizens and enforce their own laws,” Ms. Barrett wrote.
Mr. Mallory’s attorney, Ashley Keller of Keller Postman in Chicago, hailed the court’s decision.
“I am grateful that Mr. Mallory trusted me to argue his important case at the Supreme Court.”
“And I am pleased that the court correctly held that Pennsylvania’s registration statute is entirely consistent with the 14th Amendment,” Mr. Keller told The Epoch Times by email.
The railway’s attorney, Carter Phillips of Sidley Austin in Washington, declined to comment.
