DOJ, Business Groups Urge SCOTUS to Restrict Where Business Cases Can Be Filed

DOJ, Business Groups Urge SCOTUS to Restrict Where Business Cases Can Be Filed


A picture of the US Department of Justice building in Washington, December 15, 2020. REUTERS/Al Drago

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(Reuters) – In a flurry of memoranda of court filings late last week in a case that could dramatically expand the jurisdiction of lawsuits against companies, US Department of JusticeAnd the Eight state attorneys general And a host of business suites including American Chamber of Commerce The US Supreme Court has warned against letting go of recent precedents that limit the possibility for plaintiffs to sue companies.

Other than that, Department of Justice Solicitor General Elizabeth Prilugar – who also Request To make an oral argument when judges hear the case in November — federalism and even international courtesy will be undermined by states attempting to exercise universal jurisdiction over the companies once the companies register to do business in the state.

“Allowing states to require foreign corporations to submit to their general jurisdiction would improperly infringe on the sovereignty of sister states, and allow larger states to impose their will on smaller states,” Virginia Attorney General Jason Miyares wrote in the AGs memorandum. “Unrestricted public jurisdiction would also lead to widespread shopping and litigation tourism, undermining the ability of states to implement their own policies.”

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If nothing else, last week’s friend’s briefs demonstrated the affair’s potentially huge consequences, Mallory v. Norfolk Southern Rail Company. In July, the case was called a mere dormant in the Supreme Court. It is clear that the American business community has awakened.

The main question in the case is whether the due process clause of the Fourteenth Amendment prevents individual states from requiring a corporation to agree to personal jurisdiction as a condition of doing business within the state. These consent-by-registration laws were common among states, but nearly all of them were repealed or interpreted to conflict with a series of Supreme Court cases, beginning in 1945. International Shoe Company v. Washington StateThis judicial analysis focused on the company’s contacts with the state.

In Mallory’s case, Virginia-based longtime railroad worker Robert Mallory sued the Virginia-based company in Pennsylvania state court, alleging that he was exposed to asbestos while working on the Ohio and Virginia railroads. (Mallory’s Supreme Court attorney, Ashley Keeler of Keller Postman, told me that his client’s lawyers chose Pennsylvania because that’s where they reside.)

Mallory asserted that the railroad had approved of Pennsylvania’s jurisdiction when it was registered to do business in the state. But the Pennsylvania Supreme Court Rule Last December, jurisdiction law by registration was deemed coercive rather than voluntary, and thus a violation of railways’ constitutional due process rights.

Mallory Supreme Court Lawyers – Guided by Consent in 2021 Ford Motor Company vs. Montana As Justice Neil Gorsuch asked why “American corporations continue to receive special judicial protection in the name of the Constitution”—he told the Supreme Court in Opening Brief That neither the Fourteenth Amendment nor Supreme Court precedent prevents states from requiring corporations to submit to their jurisdiction as a condition of conducting business.

The history and long tradition of these state laws is reflected, according to Mallory, in a 1917 Supreme Court decision, Pennsylvania Fire Insurance Philadelphia v. Gold Issue Mining and Milling Co, whereby judges upheld Missouri’s exercise of jurisdiction over a corporation in Arizona that agreed upon its registration to do business in Missouri. Mallory argued that subsequent Supreme Court cases—including the two recent milestones in corporate jurisdiction, 2011 Goodyear Tires Operations S.A. v. Brown and 2014 Daimler AG vs. Bowman – He stressed the importance of establishing the company and its contacts with the country that claims to exercise jurisdiction. But, according to Mallory, neither Goodyear nor Daimler explicitly vetoed the Pennsylvania Fire, which centered on the company’s approval of the Missouri jurisdiction.

Supreme Court Rail Counsel, Carter Phillips of Sidley Austin, responds in Norfolk Southern 26 august brief That the judges effectively invalidated the Pennsylvania fire in their decision on the international boot and in subsequent cases.

“No aspect of the Pennsylvania Fire Logic has escaped the international boot,” the company said in its brief. “This includes not only the fantasies of tacit consent and existence, but also the idea that a company’s compulsory compliance with state law is ‘voluntary.’ In other words, compulsory registration cannot result in consent.”

The Railroad Brief insisted that the process service problems that originally prompted states to enact laws requiring companies to agree to jurisdiction are now outdated. Phillips argued that the system of jurisdiction by registration “is thus a relic of a bygone era”. “It is neither necessary nor doctrinally supported today.”

If the Supreme Court were to side Mallory, the railroad said, the impact would be dire: “If Pennsylvania could take jurisdiction over any lawsuit against a company doing business there, so could any other state,” the memo said. “States have no legitimate interest in seizing jurisdiction over claims that are unrelated to the forum, and allowing them to do so invites statesmanship, forum shopping, and injustice.”

The Department of Justice and the US Chamber detailed the railroad’s insistence that the history of the old state registration laws actually undermine Mallory’s arguments. In the Chamber’s Brief, in particular, University of Georgia Law School Dean Peter (Bow) Routledge presented a thesis on states’ jurisdiction over corporations, dating back to 1825, when states first began asserting jurisdiction in cases involving state corporations. operating within its borders.

On that day, the chamber said, a few states have enacted laws that can be read as granting broad jurisdiction over companies that are registered to do business within the state. But the breadth of these laws, according to the brief, was heavily litigated in the decades leading up to the adoption of the Fourteenth Amendment in 1868—and state courts almost always interpreted the laws narrowly.

In fact, the chamber’s brief said, Mallory failed to find a single case from that ancient era in which the court upheld its jurisdiction over an out-of-state company in lawsuits unrelated to the company’s in-state actions.

Keeler, Mallory’s senior adviser, said by email that he was eager to provide a summary of the response refuting these history-based arguments. “None of the Friends refutes the universal practice in and around 1868 to extract assent to jurisdiction as a condition of authorizing a corporation to do business within the territory of the State,” said Keeler. Attempts to restrict consent based on terms such as ‘specific jurisdiction’ are outdated.

Read more:

This dormant Supreme Court case could be a corporate nightmare

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