Last year, the Pennsylvania Supreme Court entered the legal fray regarding the unsettled issue whether courts may (based upon statutory enactments) exercise general jurisdiction over a foreign (non-Pennsylvania) corporation, which registers to conduct business in the commonwealth and in fact carries-out substantial business here. In Mallory v. Norfolk Southern Railway, 266 A. 3d 542 (2021), the court ruled that courts cannot hear an out-of-state claim in Pennsylvania based upon the foreign corporation’s registration to do business because registration was coerced by statute rather than a voluntary agreement to subject itself to the general jurisdiction of our courts. The “coercive effect” of registering or not was that without registering a foreign company was not authorized to file suits in Pennsylvania—frankly, that statutory prohibition probably violates the commerce clause. In reaching this decision, the court found that century-old U.S. Supreme Court precedent (Pennsylvania Fire Insurance of Philadelphia v. Gold Issue Mining & Milling, 37 S. Ct. 344 (1917) had been implicitly overruled, and that the opposite conclusion reached by the Georgia Supreme Court just a month earlier was wrongly decided. See Cooper Tire & Rubber v. McCall, 863 S. E. 2d 81 (Ga. 2021). Mallory is now pending before the U.S. Supreme Court,, and it will be argued in the next term of the court.

As I wrote in an amicus brief filed in the U.S. Supreme Court, the decision in Mallory may finally allow the court to correct its parochial formula for general jurisdiction, merging principles of “due process” with modern business practices. If that occurs, then the decision of the Pennsylvania Supreme Court will be reversed and state courts will be opened to resolve claims against out-of-state companies who would otherwise unfairly avoid being haled into courts when they register to conduct business and then exercise that privilege, earning substantial profits for those business activities in the commonwealth.

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