U.S. Supreme Court building in Washington, D.C. Photo: Diego M. Radzinschi/ALM

Background

In 1917, the U.S. Supreme Court rejected a due process challenge to a Missouri statute that required corporations to consent to personal jurisdiction for all purposes as a condition of registering to do business in the state. That case, Pennsylvania Fire Insurance v. Gold Issue Mining & Milling, was never overruled. Many believed, however, that the "Court's transformative decision on personal jurisdiction in International Shoe" invalidated corporate registration as a basis for all purpose or "general" jurisdiction. The Supreme Court recently reinforced that belief in Daimler AG v. Bauman, holding that absent exceptional circumstances, corporations are only subject to general jurisdiction in two "paradigm" forum states—where they are incorporated and where they maintain their principal place of business.

But, last month, the Supreme Court held that general jurisdiction can extend further without offending due process. In Mallory v. Norfolk Southern Railway, the court upheld Pennsylvania's exercise of general jurisdiction over a corporation that consented to jurisdiction as a condition of registering to do business under a statute similar to the one at issue in Pennsylvania Fire. At first glance, Mallory appeared to significantly expand general jurisdiction and potentially undo the limits announced in Daimler. Its true impact, however, is far from clear. Unless additional states adopt statutes like Pennsylvania's, and unless those statutes survive another looming constitutional challenge under the dormant commerce clause, Mallory's apparent "sea change" may prove to be "much ado about nothing."

Historic Due Process Limitations on Personal Jurisdiction

The Supreme Court has long recognized that due process limits a state's ability to exercise jurisdiction over foreign corporations that have not consented to jurisdiction in that state. Originally, personal jurisdiction hinged on the defendant's "presence within the territorial jurisdiction of the court." But in International Shoe, the court held that exercising jurisdiction over a nonresident corporation satisfies due process if the company has "certain minimum contacts with [the forum state], such that the maintenance of the suit does not offend traditional notions of fair play and substantial justice."