In order for a lawsuit to proceed, the court must have personal jurisdiction over the person being sued. Traditionally, this meant that a process server, or perhaps the sheriff, personally hands the defendant the summons. And the traditional requirement is that the defendant, when he or she is handed those papers, is within the borders of the state where the lawsuit is taking place. Our friend at Richard P. Clem Continuing Legal Education shares more on state jurisdiction changes below.
So if I live in New York, and somebody wants to sue me in a California court, they will probably be out of luck, because I’m not in California to be handed the papers. But if I go to California on vacation, even though my trip has nothing to do with the subject matter of the lawsuit, and the process server catches me there, then the California court probably has personal jurisdiction over me, and the lawsuit can proceed.
That system worked well in an earlier time. But it doesn’t work quite so well if I’m doing business across state lines. Let’s say that I am in New York, and I sell a defective product to a customer in California. Maybe I advertised the product in California, and the customer didn’t even know that I was really from New York. Under the traditional system, if the customer wanted to sue me in California, they had to wait for me to come back to California, catch me, and hand me the papers when I was in California. If I stayed out of California, the California courts couldn’t touch me.
To remedy this, all states eventually passed some kind of “long arm” statute. Under certain conditions, I could be sued in another state, because the long arm of that state’s law provided personal jurisdiction. Cases involving these statutes eventually made their way to the U.S. Supreme Court, which held that they were valid as long as the defendant had “sufficient minimum contacts” with the state asserting jurisdiction. This was memorialized in a 1945 Supreme Court case called International Shoe. And in the intervening years, lawyers and law students have devoted considerable energy to figuring out the meaning of International Shoe, and what exactly was a “sufficient minimum contact.”
Many years later, Robert Mallory worked for the Norfolk Southern Railway in Ohio and Virginia, and he claimed that he was exposed to cancer causing chemicals. After he left the company, he moved to Pennsylvania, and later back to Virginia. He was diagnosed with cancer, and sued the railroad. And, for whatever reason, he decided to bring the lawsuit in Pennsylvania.
The railroad moved to dismiss the case, and argued, probably correctly, that it didn’t have sufficient minimum contacts with Pennsylvania under the International Shoe case. After all, the case arose in either Ohio or Virginia, and Pennsylvania had nothing to do with it.
But Mallory’s lawyers argued that it didn’t matter. Even though Mallory’s injuries had nothing to do with Pennsylvania, the railroad had 2000 miles of track in the state, as well as rail yards and repair shops. And because the railroad was doing business in Pennsylvania, it was required to, and did, register to do business there. And as part of that registration, it agreed to appear in the Pennsylvania courts for “any cause of action.”
The railroad argued the case all the way to the Pennsylvania Supreme Court, which ruled that the agreement didn’t apply. According to the Pennsylvania court, that agreement was superseded by the Due Process Clause of the 14th Amendment. Therefore, it dismissed the case, ruling that Mr. Mallory would have to start over somewhere else.
In a similar case decided about the same time, the Georgia Supreme Court came to the opposite conclusion. In light of that split of authority, the U.S. Supreme Court agreed to hear the case, and the high court issued its decision on June 27, 2023. In a 5-4 decision, the Court sided with Georgia, and reversed the Pennsylvania high court. The court’s opinion was written by Justice Gorsuch, and four other justices agreed with all or part of the decision. The dissenting opinion was authored by Justice Barrett, with three other justices joining.
The majority based its decision on a 1917 case with very similar facts. The Pennsylvania Supreme Court had concluded that subsequent cases, such as International Shoe, had eroded the basis for the 1917 case, and it was effectively overruled. The U.S. Supreme Court, on the other hand, made clear that such a statute can still be a basis for jurisdiction, and there is nothing unfair about it. The high court noted that by registering to do business in Pennsylvania, it was granted both the benefits and the burdens. It was allowed to do business in Pennsylvania, just like a Pennsylvania corporation. But in exchange, just like a Pennsylvania corporation, it was potentially burdened by a lawsuit there.
There’s often more than one state where a case can be filed. And a good attorney knows that filing the case in one state might give the plaintiff an advantage. When you hire a lawyer, you want one that knows the jurisdictional ins and outs, so that you case can be brought in the state where it is most advantageous to you. Some attorneys provide other attorneys with Continuing Legal Education (CLE) programs to keep them up to date on the latest developments in law so that they can best serve their clients.