Judges debate state laws opening courts to lawsuits against companies

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WASHINGTON — The Supreme Court struggled Tuesday to decide whether Pennsylvania can require companies to agree to be prosecuted in the courts — by anyone, for conduct anywhere — as a condition of doing business in the state.

Only Pennsylvania has such a law. But if the court ruled it constitutional, other states would most likely take similar measures, giving injured consumers, workers and others more choice about where to sue and subject companies to lawsuits they see as hostile to business. consider.

The case, Mallory v. Norfolk Southern Railway, No. 21-1168, was brought by Robert Mallory, a Virginia man who says he developed cancer from exposure to toxic chemicals while working for the Norfolk Southern Railway in Virginia and Ohio. Company. based and incorporated in Virginia. The question in the case is whether he can sue in a third state with no concrete connection to the lawsuit – Pennsylvania.

The Supreme Court has long said companies can be prosecuted where they are incorporated or where they are headquartered. And they can be prosecuted in certain cases if the claimant’s claims are related to the defendant’s contacts with the state.

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mr. Mallory relied on none of those legal bases. Instead, he pointed to a Pennsylvania law that requires companies doing business in the state to agree to be sued there.

Carter G. Phillips, a railroad attorney, said it was unconstitutional for his client to make that choice.

But Judge Neil M. Gorsuch said Norfolk Southern made a conscious decision. “There is no doubt that by submitting that piece of paper the railroad understood that it was subject to this law,” he said.

Justice Sonia Sotomayor said Norfolk Southern was particularly ill-placed to challenge the jurisdiction of the Pennsylvania courts.

“You had more miles of railroad tracks and more workers in Pennsylvania than any other state, even Virginia,” she told Mr. Phillips, citing information from a letter from a friend of the court.

Mr Phillips replied that “those facts are irrelevant to the proper outcome of this because that is not the theory on which the plaintiff brought the case.”

Justice Samuel A. Alito said the court’s ruling on Pennsylvania law would apply to all types of businesses.

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“Norfolk Southern is a big company, and such big companies can litigate anywhere in the country,” he said. “So the practical implications for them may not be that serious. But all companies are not large entities.”

Ashley C. Keller, an attorney for Mr. Mallory, said all companies must “make a choice: Are they willing to submit to the general jurisdiction of the Commonwealth courts or choose to exit the Pennsylvania market?”

The Biden administration filed a petition in support of the railroad, and Curtis E. Gannon, a federal government attorney, argued on her behalf. Judge Elena Kagan, who worked as a US Attorney General before joining the court, asked Mr Gannon why he was there.

“What’s with this suit that made you decide to join?” she asked.

“In other words, what interests of the United States or dangers to the United States do you see at stake in this lawsuit?”

Mr Gannon pointed to “international concerns” and said a primary reason was “to ensure that the court’s decision here would not imply the constitutionality of federal statutes.” For example, the government’s brief discussed a federal law that held that the Palestine Liberation Organization had consented to prosecution in the United States.

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Mr. Keller said Pennsylvania law was similar to the take-it-or-leave-it contracts many companies use to force consumers and employees to arbitrate or require them to sue far from home.

“We’re making flesh-and-blood people live up to their contracts and waive their rights to always exercise personal jurisdiction over major corporations like Norfolk Southern and Amazon and Apple,” he said.

Some judges seemed frustrated as the argument progressed and the lawyers struggled to define exactly what right the railroad should have waived.

“I’m just not very good at metaphysics,” Judge Clarence Thomas told Mr. Phillips.

The lawyer replied, “I’m not very good at physics either.”

Justice Thomas said that was a different matter. “I was good at physics,” he said. “It’s just the metaphysics that was a problem.”

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