Norfolk Southern Distinguishes But Does Not Derail Daimler

On June 27, 2023, the United States Supreme Court issued its opinion in Mallory v. Norfolk Southern Railway Co. The case pertains to general personal jurisdiction that courts have over the parties in a suit. In its holding, the Court found that courts in the Commonwealth of Pennsylvania had general jurisdiction over Norfolk Southern Railway Co. despite the fact that the company is neither headquartered nor incorporated there. While on its face, the holding may seem to be an abrogation of the Court’s 2014 ruling in Daimler AG v. Bauman, but upon closer inspection, it is clear that Mallory and Daimler can be read harmoniously.

Daimler AG v. Bauman changed the landscape pertaining to general jurisdiction and essentially gave International Shoe v. State of Wash., Off. Of Unemployment Comp. and Placement, 326 U.S. 310 (1945) the boot. While International Shoe was not entirely abandoned, its “minimum contacts” test for general jurisdiction was essentially replaced by a rather simple test to determine if a foreign corporation was “at home” in the chosen forum state. Under Daimler, a foreign corporation is considered “at home” and subject to the court’s general jurisdiction only in the states where the corporation is headquartered or where it is incorporated.

In Mallory, the defendant railroad was neither incorporated nor headquartered in Pennsylvania, but it was still sued there despite the fact that the acts complained of occurred in other states. The United States Supreme Court overruled the Pennsylvania Supreme Court and held that Pennsylvania had valid general personal jurisdiction over the defendant. This holding was possible because under Pennsylvania law, any out of state company that registers to do business in the Commonwealth agrees to appear in its courts on any cause of action against them. The Pennsylvania Supreme Court found that this provision in Pennsylvania law violated the Due Process Clause, but the United States Supreme Court disagreed and vacated the judgment and remanded the suit.

In short, Pennsylvania law side-stepped Daimler by requiring corporations that want to do business in the Commonwealth to waive their rights and acquiesce to the general jurisdiction of the courts. Daimler was not overruled by Mallory in any way.

Could a similar fate befall a corporation sued in Illinois under facts similar to Mallory? No, not under current Illinois law. Unlike the Commonwealth of Pennsylvania, Illinois does not require foreign corporations that register to do business to waive their rights and be subjected to the general jurisdiction of Illinois courts. In fact, in 2017, the Illinois Supreme Court issued an opinion in Aspen American Insurance Co. v. Interstate Warehousing, Inc. that found that even though the defendant may have had continuous and systematic general business contacts in the state, it was neither headquartered nor incorporated in Illinois. The Illinois Supreme Court overruled the lower courts that had denied the defendant’s motion to quash service and dismiss the case for lack of personal jurisdiction. If Illinois had similar statutory language as Pennsylvania, the ruling in Aspen American Insurance may have been different.

Daimler and Mallory are able to be read harmoniously. Daimler’s “at home” test for general jurisdiction is not affected by Mallory because Mallory found that general jurisdiction existed because of a Pennsylvania statute, not because of Daimler’s test.