We previously blogged on the Pennsylvania Supreme Court’s decision in Mallory v. Norfolk S. R.R. Co., Civ. A. No. 3 EAP 2021, Slip. Op. J-49-2021 (Pa. Dec. 22, 2021), which put an end to general jurisdiction based solely on registration to do business in the Commonwealth. Since the issuance of this landscape-shifting decision, courts in the Commonwealth have seen a flurry of ”Mallory motions” coming in all shapes and sizes. So far, plaintiff’s response has been uniform – Mallory’s holding is limited and does not apply to defendants whose dealings are entirely “interstate” and who have no “footprint” in the Commonwealth. This attempt to minimize the impact of Mallory was recently rejected by the Philadelphia Court of Common Pleas in Emery v. U.S. Steel Corp. giving a glimpse of hope to foreign defendants haled to court in Pennsylvania.
In Emery v. U.S. Steel Corp., plaintiff alleged that he was exposed to benzene in Pennsylvania and sued a defendant corporation organized in Delaware with its principal place of business in Alabama. Emery v. U.S. Steel Corp., Civ. A. No. 210402850 (Ct. Com. Pl. Phila. Feb. 7, 2022) (Glynnis, J.). The defendant, whose only contact with Pennsylvania was its registration to do business in the Commonwealth, filed pre-Mallory preliminary objections seeking dismissal for lack of personal jurisdiction. The court overruled them without an opinion. Armed with Mallory, the defendant filed a motion for reconsideration citing to the Pennsylvania Supreme Court’s unanimous holding that Pennsylvania’s “statutory scheme is unconstitutional to the extent that it confers upon Pennsylvania courts general jurisdiction over foreign corporations that are not “at home” in Pennsylvania pursuant to Goodyear and Daimler.” Mallory, Slip. Op. at *38.
This holding left seemingly no hope to plaintiffs seeking to haul foreign defendants before Pennsylvania state courts. How did the Emery plaintiff attempt to evade it? By arguing that Mallory applies only to those corporate defendants that conduct at least some business in Pennsylvania, but it does not apply to defendants whose dealings are entirely “interstate” and who have no “footprint” in the Commonwealth. According to plaintiff’s far-fetched reading of Mallory, if a defendant conducts any intrastate commerce, then the defendant must register as a foreign entity doing business in the Commonwealth. Because the defendant has no choice but to register, such registration is insufficient to confer general jurisdiction. However, if the defendant conducts only interstate business, it does not have to register as a foreign entity doing business in Pennsylvania. If such defendant nevertheless chooses to register, the decision to register is voluntary and represents the corporation’s consent to general jurisdiction in Pennsylvania.
This creative reading of Mallory leads to an absurd result where general jurisdiction exists over a defendant whose business is entirely interstate, but it does not exist over a defendant who conducts at least some business within the Commonwealth. Plaintiffs’ argument that general jurisdiction based on registration where the defendant conducts only interstate activities also undermines the often accompanying argument that the very same defendant is, nevertheless, subject to specific jurisdiction based on its conduct in Pennsylvania!
Judge Glynnis Hill of the Philadelphia Court of Common Pleas saw right through it and granted defendant’s motion for reconsideration in Emery reversing the previous decision denying preliminary objections based on lack of personal jurisdiction. See Civ. A. No. 210402850 (Ct. Com. Pl. Phila. Feb. 7, 2022) (Glynnis, J.). And there is some hope that other judges will follow. See e.g. Stapelton v. U.S. Steel Corp., Civ. A. No. 200101462 (Ct. Com. Pl. Phila. Feb. 22, 2022) (Crumlich, J.) (denying motion for summary judgment on procedural grounds but directing defendant to file a motion for reconsideration based on Mallory). There are also some procedural lessons to be learned from the Mallory litigation to date as Philadelphia courts have indicated that the Mallory motions should not be filed as emergency motions but should, instead, follow the regular motions’ track.
The post-Mallory landscape is sure to continue developing so stay tuned for future updates.