Recently, a plurality of the United States Supreme Court issued a ruling that extends the reach of personal jurisdiction upon corporate defendants.
Based on the Court’s decision in Mallory v. Norfolk Southern Railway Co., 600 U.S. 122 (2023), business owners registered to do business in Pennsylvania as well as in other states should pay close attention to the consent statutes of each state and the language included in such. While language similar to that contained in the Pennsylvania statute, detailed below, does not appear to be predominant, businesses should be on the lookout post-Mallory for state legislatures to adopt similar language based off of the Court’s approval.
In Mallory, the Court held that a Pennsylvania trial court could exercise personal jurisdiction over a non-Pennsylvania company in a suit arising out of non-Pennsylvania conduct. However, pertinent to the Court’s analysis, was the language in Pennsylvania’s consent statute requiring out-of-state corporations to consent to personal jurisdiction in Pennsylvania courts as a condition of registering to do business in the Commonwealth. 15 Pa.C.S. § 411(a); 42 Pa.C.S. § 5301(a)(2)(i).
Pursuant to Section 411(a), an out-of-state corporation “may not do business in this Commonwealth until it registers with” the Pennsylvania Department of State. 15 Pa.C.S. § 411(a). Moreover, as part of the registration process, businesses are required to “continuously maintain” and “identify” an “office” situated in the Commonwealth. 15 Pa.C.S. § 411(f); see also 15 Pa.C.S. § 412(a)(5). Once registered, the corporation “shall enjoy the same rights and privileges as a domestic entity and shall be subject to the same liabilities, restrictions, duties, and penalties . . . imposed on domestic entities.” 15 Pa.C.S. § 402(d). Pennsylvania law also overtly states that “qualification as a foreign corporation” permits state courts to “exercise general personal jurisdiction” over the registered out-of-state corporation. 42 Pa.C.S. § 5301(a)(2)(i).
It should be noted that the Court in Mallory did not address the constitutionality of the statute as it relates to businesses with minimal contacts within a state, but that issue is likely to appear on the Court’s docket soon.
This post was written by Francesca Iovino
