Supreme Court allows Pennsylvania unusual law on business lawsuits

The Supreme Court enforced a law in Pennsylvania on Tuesday requires companies to agree to be sued in their courts — by anyone, for conduct anywhere — as a condition of doing business in the state.

Only Pennsylvania has such a law. But the ruling could pave the way for other states to enact similar measures, giving aggrieved consumers, workers and others more choice about where to sue and companies being subject to lawsuits in courts they see as hostile to business. .

The Supreme Court was tied 5 to 4, with Judge Neil M. Gorsuch writing the majority. In a ruling against the company at the center of the case, Norfolk Southern, Judge Gorsuch rejected his argument that it was entitled “to a more favorable rule, one that protects it from lawsuits that even its employees must answer” under the Fourteenth Amendment.

Judge Amy Coney Barrett, along with Chief Justice John G. Roberts Jr. and Justices Elena Kagan and Brett M. Kavanaugh, disagreed, writing that Pennsylvania’s law unfairly harmed the rights of other states because it “imposed a blanket claim to authority over controversies with no connection to the Commonwealth. ”

The case was brought by Robert Mallory, who said he developed cancer after being exposed to toxic chemicals during his nearly two decades as a truck mechanic in Virginia and Ohio for Norfolk Southern Railway, which was founded and based in Virginia at the time.

Mr Mallory argued that his work involved spraying wagon pipes with asbestos and demolishing car interiors which he claims contained carcinogens. The question in the case was whether he could sue in a third state with no concrete connection to the lawsuit: Pennsylvania.

The decision came after the derailment of a train in southern Norfolk carrying toxic chemicals near the Pennsylvania state line, bolstering the stakes of the case. A fire ensued and sparked fears of an explosion, prompting authorities to set fire to some of the train’s hazardous cargo and raising concerns about damage to public health and the environment.

The derailment was over the verdict on Tuesday, with Judge Gorsuch addressing it right at the beginning of his opinion. Suppose an Ohio resident sues the train conductor for illness from the accident, he wrote. If the resident had served the lawsuit on the conductor just across the border in Pennsylvania, the judges would all agree that an in-state court could hear the case. But Norfolk Southern had argued it would be shielded from that very scenario, Judge Gorsuch wrote.

“Nothing in the due process clause requires such an incongruous result,” Judge Gorsuch added.

The Supreme Court has long said that companies can be sued where they are incorporated or where their headquarters are located. And they can be sued in certain cases if the plaintiff’s claims are related to the defendant’s dealings with the state.

Mr Mallory relied on none of those legal bases. He previously pointed to a law in Pennsylvania that requires companies doing business in the state to agree to be sued there.

In explaining the historical background of the case, Mallory v Norfolk Southern RailwayNo. 21-1168, Judge Gorsuch explained the ways companies have resisted where claims against them can be heard.

“Unsurprisingly, companies were not thrilled with the prospect of being sued for a claim wherever they did business,” he wrote.

Norfolk Southern has also promoted its operations in Pennsylvania, he wrote. In his opinion, Justice Gorsuch including fact sheet by the company, featuring a yellow map graphic of Pennsylvania outlining the “extensive network of tracks and terminals”.

In her dissenting opinion, Judge Barrett wrote that Pennsylvania’s claim to general jurisdiction over all companies legally doing business in the state “goes against our precedent.”

“Pennsylvania’s power grab violates more than just defendants’ rights — it distorts the states’ proper role in our federal system,” she added.