Corporate Personal Jurisdiction, Mallory, and Forum-Shopping: What’s Next for Multistate or International Corporations?

A new federal court decision, Madsen v. Sidwell Air Freight1,  addresses the scope of general personal jurisdiction over corporations after the Supreme Court’s 2023 decision in Mallory v. Norfolk Southern Railway2.  Madsen suggests that many states’ laws stop short of asserting the kind of registration-based jurisdiction that Mallory approved. This decision highlights key arguments that in-house litigators should bear in mind if their companies do business in multiple states.

Corporate personal jurisdiction and Mallory

“General” or “all-purpose” personal jurisdiction means that state or federal courts in a given state can hear any and all claims against a defendant, even if the case has nothing to do with the state. (This is in contrast to “specific” or “case-linked” jurisdiction, which allows only suits that arise out of or relate to the defendant’s forum-state contacts.) Until recently, a corporation was typically subject to general jurisdiction only where it was “at home” — where it was incorporated or headquartered.3

But last year, a divided Supreme Court approved a different basis for all-purpose jurisdiction over corporate defendants: registration to do business in a state. In Mallory v. Norfolk Southern Railway, a five-Justice majority held that the Due Process Clause allows a state to hear any and all claims against a corporate defendant registered to do business there — at least if state law “is explicit” that registration is a basis for general jurisdiction and the company has a substantial in-state presence.4  On these facts, the majority said, the company has validly consented to suit for all purposes.

Because every U.S. state requires out-of-state or foreign corporations to register to do business, Mallory could expand the places where corporations can be sued for claims that have nothing to do with the forum — thus raising risks of forum-shopping. But the Mallory majority opinion is narrow. Only three Justices joined the key portion of Justice Neil Gorsuch’s lead opinion; the rest is a nonbinding plurality. And Mallory did not resolve at least four questions that will greatly affect its practical significance:

1. Which states assert general jurisdiction based on registration? Before any federal constitutional limits kick in, a state must actually assert registration-jurisdiction under state law — as a matter of both statutory interpretation and state constitutional law. Pennsylvania is currently the only state whose statutes do so expressly. Other states’ laws have been interpreted in various, shifting ways. As explained below, the new decision in Madsen sheds light on this question.

2. How explicitly must a state’s law assert general registration-jurisdiction to satisfy due process? The Mallory majority emphasized that “Pennsylvania law is explicit” that registering is a basis for general jurisdiction over foreign corporations.5  Justice Ketanji Brown Jackson, who joined the majority, likewise opined that “ ‘foreign corporations are given reasonable notice’ of the jurisdictional implications of registration.”6  And the majority declined to “speculate whether any other statutory scheme” would satisfy due process, including any fair-notice requirements.7

3. Does due process allow general registration-jurisdiction over a corporation with minimal in-state activity? The Mallory majority opinion also refused to speculate about whether due process would allow general registration-jurisdiction on “any other … set of facts.”8  In the plurality portions of his opinion, Justice Gorsuch emphasized the extent of the corporate defendant’s in-state activities there,9  and Justice Samuel Alito’s concurrence noted that the case involved “a large company … actively engaged in business” in Pennsylvania.10

4. Can general registration-jurisdiction violate other constitutional protections? Setting aside what due process allows, general registration-jurisdiction may well violate the Constitution’s Commerce Clause in at least some cases. Justice Alito, who provided the crucial fifth vote for the narrow Mallory majority, concurred in part to warn that a “State’s assertion of jurisdiction over lawsuits with no real connection to the State may violate fundamental principles” that are best protected by the dormant Commerce Clause.11  And the majority expressly preserved this question for future cases.

Madsen v. Sidwell Air Freight

In March 2024, Judge Jill Parrish of the District of Utah issued a comprehensive opinion on the first question noted above: When does a state’s law assert general registration-jurisdiction in the first place? After surveying pre- and post-Mallory cases — which revealed “a lack of uniformity” on this question — the Madsen opinion concluded that the “issue comes down to whether Utah has expressly required consent to general jurisdiction in its registration statutes.”12  And while Utah law requires foreign corporations to register and appoint an agent for service of process, it contains no such “express consent language.”13

In so holding, the court focused on two key statutory provisions, which many other states share:

  • One Utah statute says that a registered foreign corporation “has the same rights and privileges, but no greater rights or privileges” and “is subject to the same duties, restrictions, penalties, and liabilities” as “a domestic corporation of like character.”14  Many states have similar provisions — including Pennsylvania, as Mallory noted.15
  • But a different Utah law says that “appointment or maintenance in this state of a registered agent does not by itself create the basis for personal jurisdiction over the represented entity in this state.”16  As Madsen noted, 12 states have a version of this provision.17

Madsen concluded that “unlike the statute at issue in Mallory, none of these Utah statutes expressly inform a foreign corporation … that it will be subject to general jurisdiction if it registers to do business in Utah.”18  That was true even setting aside the language specifically disclaiming “personal jurisdiction” based on a registered agent’s presence, which merely “bolstered” the conclusion that registration-jurisdiction is improper. “To read Mallory more broadly,” the court concluded, would “subject every registered foreign corporation … to general personal jurisdiction in almost every single state,” and the court saw no basis in Mallory for “such a sweeping sea change.”

What’s next

Madsen illustrates that plaintiffs will rely on Mallory to sue corporations in states where no plaintiffs live and the claims did not arise, simply because the forum seems favorable to them or related litigation is pending there. Thus, in deciding whether to register to do business in a new state — especially Pennsylvania — corporations should take into account the risk of suit there on claims that arose in other states or even other countries.

But Madsen also shows that Mallory’s practical impact has yet to be determined. That impact will turn on the four open questions noted above: (1) Under state law, should the state’s long-arm or corporate-registration statutes be interpreted to assert general registration jurisdiction, and if so, does the state constitution allow that? (2) Do state laws less explicit than Pennsylvania’s provide sufficient notice to satisfy due process, including if their interpretation has changed since the company registered? (3) Does due process allow a state to assert general registration jurisdiction over a company with minimal (or zero) actual in-state operations? (4) Does general registration jurisdiction violate the Commerce Clause, at least where the plaintiff does not live in the forum state and the claims did not arise there? Corporate defendants should be prepared to preserve all these personal-jurisdiction objections at the earliest stage and to make the strongest possible arguments on each point — doctrinal, historical, and practical.

1 No. 1:23-cv-8, 2024 WL 1160204, at *5 (D. Utah Mar. 18, 2024).
2 600 U.S. 122 (2023).
3 Daimler AG v. Bauman, 571 U.S. 117, 127 (2014).
4 See Mallory, 600 U.S. at 134–136.
5 Id. at 134 (quoting 42 Pa. Cons. Stat. § 5301(a)(2)(i)) (cleaned up).
6 Id. at 148 (Jackson, J., concurring)
7 Id. at 135.
8 Id.

9 Id. at 142–43.
10 Id. at 152 (Alito, J., concurring in part).
11 Id. at 150 (Alito, J., concurring in part).
12 2024 WL 1160204, at *8–9.
13 2024 WL 1160204, at *15.
14 Id. at *9 (quoting Utah Code Ann. § 16-10A-1505(2)).
15 600 U.S. at 134.
16 2024 WL 1160204, at *5 (quoting Utah Code Ann § 16-17-401).
17 2024 WL 1160204, at *6 n.7 (listing Arkansas, Hawaii, Idaho, Indiana, Maine, Mississippi, Montana, Nevada, North Dakota, South Dakota, Utah, and Washington).
18 2024 WL 1160204, at *9

This post is as of the posting date stated above. Sidley Austin LLP assumes no duty to update this post or post about any subsequent developments having a bearing on this post.