In December 2021, Attorneys David Damico, Daniel Donahoe, Ira Podheiser, and Jeffrey Jackson won before the Supreme Court of Pennsylvania for a railroad client. The Pennsylvania Supreme Court ruled that a corporation, incorporated outside of Pennsylvania, and with its principal place of business also located outside of Pennsylvania, is not subject to the general jurisdiction of the Pennsylvania courts if it registers to do business in Pennsylvania.
In the case decided by the Supreme Court of Pennsylvania, the Plaintiff, a resident of Virginia and an employee of the railroad client, sued the railroad pursuant to the Federal Employer’s Liability Act (“FELA”) in the Court of Common Pleas of Philadelphia County, for personal injuries allegedly caused by his railroad employment. Plaintiff alleged he was exposed to hazardous substances in the course of his railroad employment, causing him to develop colon cancer. He did not allege that any of his exposures that allegedly caused his injuries occurred in Pennsylvania. He based his arguments for personal jurisdiction in the Pennsylvania courts on the grounds that the out-of-state railroad defendant had registered to do business in Pennsylvania, pursuant to Pennsylvania’s mandatory registration requirement.
The Trial Court initially granted the railroad’s motion to dismiss, accepting Burns White’s argument that Pennsylvania’s mandatory foreign corporation registration scheme violated the Due Process Clause of the 14th Amendment to the United States Constitution. The Trial Court examined a long line of case authority from the Supreme Court of the United States and held that compliance with the mandatory statutory registration provision did not mean that the railroad had voluntarily “consented” to the general jurisdiction of the Pennsylvania courts. Plaintiff then appealed this ruling to the Pennsylvania Superior Court. Due to the constitutional issues involved, the Superior Court transferred the appeal to the Pennsylvania Supreme Court.
The Pennsylvania Supreme Court, in its December 2021 ruling, unanimously affirmed the Trial Court’s ruling and held that the mandatory registration provision violated the railroad’s due process rights. The Supreme Court concluded that it was unconstitutional for Pennsylvania courts to assert general jurisdiction over a foreign corporation that did not have systematic and continuous contacts with Pennsylvania. It further found that compliance with Pennsylvania’s scheme did not amount to a voluntary “consent” to be haled into Pennsylvania’s courts. This decision will serve to help foreign corporations avoid being sued in Pennsylvania in situations where there is no real connection between the underlying case and the Commonwealth.