Turns Out ‘No Thank You’ Might Not Be Enough To Escape Civil Liability Anymore

// While I do not know if International Shoe is Quentin Tarantino‘s favorite case, I do know that the staple for 1Ls learning Civil Procedure is still relevant. As you likely remember from Corporations, many businesses decide to register in Delaware for the benefit of not paying corporate sales tax. Incorporation is not entirely without consequence though, as corporations can be sued not just in their principle place of business, but also in the state that they’ve incorporated in. This isn’t an exhaustive list of ways to pin corporations down. Registration can also be grounds to hold a corporation liable under a state’s jurisdiction, but the reasoning upholding that option may not be as secure as plaintiffs would like it to be. From Law.com:

History and tradition, the key to recent U.S. Supreme Court decisions on abortion and guns, may not be enough to save a Pennsylvania law automatically subjecting nonresident corporations to the state’s personal jurisdiction simply by registering to do business in the state.

The justices on Tuesday heard arguments in Mallory v. Norfolk Southern Railway, a case in which Robert Mallory, a Virginia resident, sued the railroad in Pennsylvania, alleging he developed colon cancer from exposure to asbestos and other toxic substances while working for the railroad in Ohio and Virginia.

The justices’ decision could affect where plaintiffs can bring personal injury suits against corporations registered to do business.

Norfolk Southern registered to do business in Pennsylvania in 1998 as a foreign corporation. It owns more than 2,000 miles of track, and operates railyards and repair shops in that state. Mallory unsuccessfully argued in the state trial court that he could sue the railroad in Pennsylvania based on its corporate registration law coupled with the state’s long-arm statute.

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This is, as the French say, big. I don’t want to scare you with arguments about how you should be suspicious of corporations, even in moments of their apparent benevolence, because there’s actually a fickle profit motive undergirding their “charity,” but like… you should be suspicious of corporations because they will only act in ways that keep people’s health in mind if there is a profit motive. Without laws like Pennsylvania’s, corporations could avoid civil liability by just declining attempts to sue them. The Railroad’s counsel would agree — because that’s exactly the point.

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“The way I would articulate it is it is our right not to be coerced to appear before a court, except by lawful judicial power,” [Carter]Phillips said. “And this court has made clear that lawful judicial power in dealing with a corporation is to be—is to be haled into a court where it is at home. We are not ‘at home’ in Pennsylvania. And that’s the right we’ve been asked to give up, is—is the right not to be sued anywhere except where we are at home.”

…

“All we have here is a lawsuit by a nonresident of Pennsylvania against a corporation that is a nonresident of Pennsylvania on a cause of action that arose outside of Pennsylvania. The state of Pennsylvania didn’t defend the statute. No other state has adopted a statute like this one in modern memory. Is it alone? Yes. This is not worth the candle.”

I see where he’s coming from. But surely there should be some way of holding corporations accountable for acts committed outside of their principle place of business or state of incorporation when the thing they did was also separate from those locations. Mallory’s counsel argued that there used to be a general understanding that registration agreements conferred the right to sue companies doing business elsewhere. However, the Justices weren’t taking the bait.

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[H]istory and tradition move on,” Chief Justice John Roberts Jr. told Keller. Roberts suggested that the court’s 1945 decision in International Shoe v. Washington “relegated that body of cases” that Keller relied on “to the dustbin of history.” International Shoe announced a minimum contacts test for all assertions of personal jurisdiction.

Will Shoe be the case to rule them all? I, Mallory, and Quentin await with anticipation.

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Justices Poised to Nix State Law Requiring Companies to Consent to Being Sued [Law.com]

Chris Williams became a social media manager and assistant editor for Above the Law in June 2021. Prior to joining the staff, he moonlighted as a minor Memelord™ in the Facebook group Law School Memes for Edgy T14s.  He endured Missouri long enough to graduate from Washington University in St. Louis School of Law. He is a former boatbuilder who cannot swim, a published author on critical race theory, philosophy, and humor, and has a love for cycling that occasionally annoys his peers. You can reach him by email at [email protected] and by tweet at @WritesForRent.

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Courts, International Shoe, John Roberts, Mallory v. Norfolk Southern Railway, Pennsylvania, Personal Jurisdiction