Tuesday, June 27, 2023

Court Allows Suit Against Out-of-State Corporation that Registers and Agrees to "any cause of action"

The Supreme Court ruled today that a plaintiff can sue an out-of-state corporation in a state where the corporation registered as a foreign corporation and agreed to appear in the state courts on "any cause of action" against it.

The ruling reaffirms a longstanding caselaw on state courts' jurisdiction over foreign corporations.

The case, Mallory v. Norfolk Southern, arose when a former railroad worker sued the railroad under the Federal Employers' Liability Act in Pennsylvania state court. At the time, Mallory resided in Virginia; Norfolk Southern was incorporated and headquartered in Virginia; and Mallory suffered harms while an employee in Ohio and Virginia.

But under Pennsylvania law, a foreign corporation that seeks to do business in the state must register, and agree to appear in Pennsylvania courts on "any cause of action" against them.

The Court ruled today that the Pennsylvania law meant that Mallory's suit against Norfolk Southern in Pennsylvania's courts didn't violate due process. In so ruling, the Court applied Pennsylvania Fire Insurance v. Gold Issue Mining & Miling, a 1917 case that the Pennsylvania courts thought the Supreme Court had implicitly overruled. Not so, said the Court today, and it wasn't the Pennsylvania courts' job to say so, anyway.


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