Wednesday, December 29, 2021

Pennsylvania Supreme Court Limits the Reach of the Jurisdictional Long-Arm Statute Over Foreign Corporations

Pennsylvania State Capitol Building
Home of the Pennsylvania Supreme Court

In the case of Mallory v. Norfolk Southern Railway Co., No. 3 EAP 2021 (Pa. Dec. 22, 2021) (Maj. Op. by Baer, C.J.)(Conurring Op. by Mundy, J.), the Pennsylvania Supreme Court recognized that a recent decision by the United States Supreme Court precluded the exercise of general personal jurisdiction by a Pennsylvania court over a party solely on the basis of the fact that a foreign corporation had registered to do business in Pennsylvania. As such, that aspect of the Pennsylvania long-arm statute has been declared unconstitutional in this Mallory decision.

In this matter, a Virginia resident filed an action in Pennsylvania against a Virginia corporation, under an allegation of injuries sustained in Virginia and Ohio.

The Plaintiff asserted that the Pennsylvania courts have general personal jurisdiction over the case based exclusively upon the fact that the foreign corporation registered to do business in Pennsylvania. 

In this regard, the Plaintiff had relied upon 42 Pa. C.S.A. §5301(a)(2)(i). The Pennsylvania Supreme Court agreed with the trial court decision that the Pennsylvania statute, affording Pennsylvania court general personal jurisdiction over a foreign corporation that registers to do business in Pennsylvania regardless for the lack of continuous and symptomatic contacts within the state by that corporation, fails to comport with the due process clause of the Fourteenth Amendment of the United States Constitution.

In other words, the Court held that Pennsylvania's "statutory scheme is unconsitutional to the extent that it affords Pennsylvania courts general jurisdiction over foreign corporations that are not at home in the Commonwealth."  See Op. at p. 44.    

Anyone wishing to review a copy of the Majority Opinion of this decision may click this LINK.  The Concurring Opinion by Justice Mundy can be viewed HERE.

I send thanks to Attorney James M. Beck of the Reed Smith law firm in Philadelphia for bringing this case to my attention.


Source of image:  Photo by Andre Frueh on www.unsplash.com.

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