An important first question for any defendant who is served with a new lawsuit is whether the court has personal jurisdiction. Essentially, personal jurisdiction gives a court the ability to exercise its authority over a defendant. For a court to have personal jurisdiction, there must be a sufficient connection between the case and the state where the lawsuit is pending. For example, a court will typically have personal jurisdiction if a defendant is an individual who is a resident of the state where the case is pending, if a defendant is a company who is either incorporated in, or headquartered in, the state where the case is pending, or if there are other substantial connections between the case and the state, such as if the plaintiff’s claims arise from an accident or injury that occurred in the state.

There are other scenarios that can allow a court to exercise personal jurisdiction, and some of these scenarios have led to forum shopping by plaintiffs who want to litigate their case in the most favorable forum possible. One such example is the small number of states who have statutes that courts have interpreted as requiring any defendant who registers to do business in the state to consent to personal jurisdiction as a condition of doing business there. The number of states that have found personal jurisdiction on this basis has decreased as courts have determined that such consent-by-registration statutes conflict with more recent decisions on personal jurisdiction by the United States Supreme Court. However, one state where the question of personal jurisdiction through a consent-by-registration statute remains at issue is Pennsylvania, which is home to the Philadelphia Court of Common Pleas.

The Philadelphia Court of Common Pleas makes regular appearances on the American Tort Reform Foundation’s annual list of “Judicial Hellholes,” which focuses on abuses of the civil litigation system. Most recently, the Philadelphia Court of Common Pleas took the #2 spot on the list due to its many plaintiff-friendly attributes, including nuclear verdicts and unreasonable awards of attorneys’ fees. However, there may be relief in sight for companies that are not incorporated or headquartered in Pennsylvania because the United States Supreme Court may soon put an end to the litigation tourism that has been permitted by the state’s consent-by-registration statute.

In its last term, the United States Supreme Court heard oral arguments in Mallory v. Norfolk Southern Railway, which involves personal injury claims arising from the plaintiff’s alleged exposure to carcinogens while working as a carman for the defendant. The plaintiff in Mallory is a Virginia resident, his claims arise from alleged exposure while on the job in Ohio and Virginia, and the defendant railway was incorporated and headquartered in Virginia when the lawsuit was filed. Although Virginia is the state with the most connections to the case—and the case does not have any connections to Pennsylvania—the plaintiff did not file the lawsuit in Virginia and instead filed it in the Philadelphia Court of Common Pleas. The defendant railway moved to dismiss the case for lack of personal jurisdiction on the grounds that Pennsylvania’s consent-by-registration statute violates the Due Process Clause of the Fourteenth Amendment to the U.S Constitution. The trial court agreed, and the Supreme Court of Pennsylvania affirmed that decision.

The United States Supreme Court is expected to issue its decision in Mallory during this term. Although it is never possible to know how the Supreme Court will rule based on oral arguments, many are cautiously optimistic that the Supreme Court will affirm the decisions of the Pennsylvania courts. A decision affirming the rulings in Mallory would put an end to litigation tourism in a notorious “Judicial Hellhole,” and businesses would be able to do business in Pennsylvania and other states without worrying about the prospect of having to defend against lawsuits that have no business being filed there simply because the company registered to do business in the state.

If you have any questions about this article, please contact Danielle Brim (dbrim@setlifflaw.com) at 804-377-1264, or Steve Setliff (ssetliff@setlifflaw.com) at 804-377-1261.