On December 22, 2021, the Pennsylvania Supreme Court issued a decision in Mallory v. Norfolk SRR Co., Civ. A. N ° 3 PAE 2021, Leaflet. Op. J-49-2021, 33, 44 (Pa. 22 December 2021) which will certainly become the pillar of the jurisdictional challenges in the future. The court unanimously ruled that general jurisdiction does not exist solely on the basis of registering a company to do business in Pennsylvania. In doing so, the highest court of the Commonwealth has eviscerated the opposing opinion of the plaintiffs, Webb-Benjamin LLC v International Rug Group, LLC, 192 A.3d 1133 (Pa. Super. 2018), and noted that the Pennsylvania Long Arm Act, 42 Pa. CS § 5301 (a) (2) (i), which provides that companies are registering to do business in the Commonwealth consent to general jurisdiction, “clearly, plainly and clearly violates the Constitution”. Mallory, To glide. Op. J-49-2021, at page 33. This welcome clarification aligns the jurisprudence of the general jurisdiction of Pennsylvania with the precedent of the Supreme Court of the United States and, hopefully, puts an end to the litigation that does not exist. not owned by Pennsylvania against defendants who simply registered to do business there. .
The Supreme Court of Pennsylvania in Mallory examined whether a corporate defendant which is not incorporated in Pennsylvania and whose principal place of business is outside the Commonwealth may, nevertheless, be subject to general jurisdiction solely on the basis of its registration to do business in the Commonwealth. The plaintiff, a resident of Virginia, filed an action in Pennsylvania against a Virginia company, alleging injuries sustained in Virginia and Ohio. Mallory, To glide. Op. J-49-2021, at 9. The court of first instance allowed the defendant’s preliminary objections and dismissed the complaint with prejudice on the grounds that it would violate due process of interpreting a foreign company‘s compliance with Pennsylvania’s mandatory business registration law as a voluntary consent to exercise Pennsylvania courts. of general personal competence. Mallory, To glide. Op. J-49-2021, at 13. The court of first instance further observed that, “[b]y Requiring foreign corporations to submit to general jurisdiction as a condition of doing business here, Pennsylvania’s statutory regime infringes on our sister state’s ability to adjudicate cases against their corporate citizens. Mallory, To glide. Op. J-49-2021, at 15.
On a direct appeal to the Pennsylvania Supreme Court, the plaintiff argued that the registration to do business in the Commonwealth establishes consent to general personal jurisdiction under the Pennsylvania Long Arm Act, 42 Pa. CS § 5301 (a) (2) (i), which expressly provides that the courts of Pennsylvania may exercise general personal jurisdiction over companies that are considered foreign companies under the law, when that qualification required the registration to do business in the state. For further support, the applicant cited at Webb-Benjamin LLC v International Rug Group, LLC, 2018 Pa. Super. 187 (2018), a Superior Court ruling that consent by registration was a valid basis of personal jurisdiction.
The highest court unanimously rejected this familiar air. Mallory, To glide. Op. J-49-2021, at page 38. In doing so, the Court clearly noted that the Pennsylvania legislative scheme, which “gives the courts of Pennsylvania general personal jurisdiction over foreign companies, that the foreign company is whether or not incorporated in the Commonwealth, has established its principal place of business here, or is otherwise “at home” in Pennsylvania. . . clearly, plainly and clearly violates the Constitution. Mallory, To glide. Op. J-49-2021, at 33, 35. The Court also noted that, “finding that registration as a foreign company invokes general jurisdiction for all purposes eviscerates the framework of general jurisdiction of the Supreme Court set out in Good year and Daimler and violates official federal procedure by failing to comply with International shoes traditional conception of fair play and substantial justice. Mallory, To glide. Op. J-49-2021, at 36.
Prior to Mallory¸ Several first instance courts have ruled that consent to general jurisdiction by registration violates the due process rights of the foreign defendant. See, for example, Hill v. Safety-Kleen Sys., Inc.., # 170301021 (CP Philadelphia Aug 3, 2018); Davis v. US Steel Corp., No. 170401879 (CP Philadelphia August 2, 2018); Walker v. Safety-Kleen Sys., Inc., No. 180100015 (CP Philadelphia 2 Aug 2018); Pennington v. US Steel Corp., No.160501092 (CP Philadelphia August 27, 2018); Asbestos material Prod. Liab. Alight. (n ° VI), 384 F. Supp. 3d 532, 545 (ED Pa. 2019). But the Mallory The opinion has provided much needed clarification on the part of the highest court in the Commonwealth and is sure to have far-reaching effects on both pending and future cases, as nothing in the opinion prevents the stop applying to pending cases.
After Mallory, foreign defendants acclaimed in Pennsylvania courts solely on the basis of their registration to do business in the Commonwealth should be able to avoid litigation in Pennsylvania based on a lack of general personal jurisdiction. Those whose preliminary objections were previously dismissed on this basis, or whose summary judgments were denied, should seek reconsideration in light of the recent change in the law. Note that emergency relief or stay requests may also be appropriate, depending on the procedural position of your dispute and the local rules of each county. If you are a foreign defendant sued in Pennsylvania solely on the basis of events outside the Commonwealth and your only connection to Pennsylvania is that you are registered to do business here, please contact our licensed attorneys in Pennsylvania to discuss your concerns. options depending on Mallory.
Jurisdiction by consent remains a very controversial issue. The Toxic Tort Monitor recently reported a contrary ruling in Cooper Tire & Rubber Co. v. Mccall where the Georgia Supreme Court ruled that registration to do business is sufficient for general jurisdiction. Check frequently for updates from other jurisdictions. https://www.toxictortmonitor.com/2021/11/georgia-supreme-court-reaffirms-consent-by-registration-theory-of-personal-jurisdiction/