In Mallory v. Norfolk Southern Railway Co., the Supreme Court of the United States (SCOTUS) overturned Pennsylvania’s Supreme Court, holding that a Pennsylvania law comports with the due process clause in requiring out-of-state companies that register to do business in the Commonwealth to agree to appear in Pennsylvania courts on “any cause of action” against them. Simply put, if you register your business entity in Pennsylvania, you accept personal jurisdiction in that state and can be sued there. This decision will reverberate across the country, as other states have similar laws or may enact similar laws in the future.

The SCOTUS opinion came down on June 27, 2023, causing quite a stir for in-house and outside counsels around the country. In a narrowly decided 5-4 opinion, Justice Neil Gorsuch compared the issue to a Norfolk Southern train’s derailment on February 3^rd, 2023, in East Palestine, Ohio, suggesting that Norfolk’s argument against the Court’s ultimate decision could, in theory, shield the company from some state-court lawsuits. Further, Justice Gorsuch reasoned, companies consent to the potential liability “in exchange for the rights to exploit the local market and to receive the full range of benefits enjoyed by in-state corporations.”

In an eighteen-page dissent, Justice Barrett wrote that the majority’s decision in Mallory v. Norfolk Southern Railway “flies in the face” of seventy-five-year old precedent holding that the due process clause bars states from asserting personal jurisdiction over out-of-state companies based solely on business activities in the state. Justice Barrett contends that this ruling, while not eviscerating the traditional approach to personal jurisdiction (which looks to the defendant’s contacts with the state it is sued in), allows states to force consent to personal jurisdiction.

The decision has the potential to sharply curtail forum shopping by corporations hoping to find a more favorable jurisdiction. As it stands, companies registered in Pennsylvania can be sued in Pennsylvania for an injury or financial harm that occurred anywhere.