Courthouse Steps Decision: Mallory v. Norfolk Southern Railway Co.

[Music]

 

Sam Fendler:  Hello everyone, and welcome to this Federalist Society virtual event. My name is Sam Fendler, and I'm an Assistant Director of Practice Groups with The Federalist Society. Today, we're excited to host a Courthouse Steps Decision webinar on Mallory v. Norfolk Southern Railway.

We're joined today by Ashley Keller and John Masslon. If you'd like to learn more about today's speakers, their full bios can be viewed on our website, fedsoc.org. After our speakers give their opening remarks, we will turn to you, the audience, for questions.

If you have a question, please enter it into the Q&A function at the bottom of your Zoom window, and we'll do our best to answer as many questions as we can. Finally, I'll note that, as always, all expressions of opinion today are those of our guest speakers, not The Federalist Society.

Our moderator today is Professor Brian Fitzpatrick. Professor Fitzpatrick is the Milton R. Underwood Chair in Free Enterprise at Vanderbilt Law School. His research focuses on class actions, federal courts, judicial selection, and constitutional law. Professor Fitzpatrick is a former clerk to Supreme Court Justice Antonin Scalia and graduated first in his class from Harvard Law School.

Brian, thank you very much for joining us today, sir, and the floor is yours.

Prof. Brian T. Fitzpatrick:  Thank you, Sam. Delighted to be here about this very interesting decision, Mallory v. Norfolk Southern Railway. We are here with John Masslon and Ashley Keller.

John is a senior litigation counsel at the Washington Legal Foundation. He used to be the Assistant Solicitor General for West Virginia. He clerked on the U.S. District Court in the Western District of Pennsylvania. He has extensive experience addressing personal jurisdiction issues. And I believe, John, you filed an amicus brief—did you not—in the Mallory case, correct?

John Masslon:  Correct.

Prof. Brian T. Fitzpatrick:  Great. Also with us is Ashley Keller. Ashley is a partner at Keller Postman—his namesake firm. He is a plaintiff's lawyer now, and he was the counsel of record for the petitioner, Mallory, in the Mallory v. Norfolk Southern case. He was a law clerk to Justice Kennedy and to Judge Posner, and he graduated from the University of Chicago Law School.

Delighted to have both of you with us today to talk about the Mallory decision. I'm going to give a brief overview of the decision for our listeners. I'm going to then ask you both whether you want to add anything to my overview. And then I have a number of other questions that I'd like to ask you about the decision.

And then we're going to ask our listeners to present their questions in the Q&A feature, and I'll be watching that as we go along. So whenever you have a question, feel free to add it to the Q&A, and I'll try to interject it with our two panelists today.

So this is a big victory for Ashley. I guess this is Ashley's first Supreme Court argument, if I remember correctly. And so big, big victory, Ashley. Congratulations very much. The Supreme Court ruled in favor of Mallory with a very kind of odd fellows’ lineup.

The decision was 5-4 with strange bedfellows on each side. The opinion for the Court was written by Justice Gorsuch, and there was a very important—I think we’ll conclude—concurring opinion by Justice Alito, and the dissent was written by Justice Barrett. So we have conservatives and liberals on both sides of the V in this decision.

The decision is a personal jurisdiction decision, and it's about the Due Process Clause and whether a statute in Pennsylvania was consistent with the Due Process Clause. The statute in Pennsylvania required companies that did business in Pennsylvania and that wanted to get certain benefits from doing business in Pennsylvania required them to register with the state and, I believe, appoint an agent to receive process. You can correct me if I'm wrong about that.

And the statute in Pennsylvania said that when you register, you are subjecting yourself to general personal jurisdiction in the state of Pennsylvania. And what that means—general personal jurisdiction under the Supreme Court's current lingo—that means that you can be sued in Pennsylvania for any cause of action, even if it has no connection to the state of Pennsylvania. That's what the Pennsylvania statute says.

And that's exactly what happened here. Mallory was injured, and he is not from Pennsylvania. And he wanted to sue Norfolk Southern in Pennsylvania. We can ask Ashley why. I think there's probably some forum selection reasons for that. But he wanted to sue in Pennsylvania.

The incident took place either in Virginia or Ohio. I think you guys can correct me on that. But Norfolk Southern is from Virginia. They're a Virginia corporation. And so the accident didn't have anything to do with Pennsylvania. Mallory is not from Pennsylvania. Norfolk Southern is not a Pennsylvania corporation. But he sued in Pennsylvania anyway.

And the question is, is that consistent with due process, that you can have a state say, “If you want to do business, you've got to register. And if you register, you have to consent to jurisdiction for things that are completely unrelated to the state of Pennsylvania.” And the U.S. Supreme Court 5-4 said, “Yes, that's constitutional. That does not violate due process.”

And so let me leave it there as my summary of the decision and ask Ashley first and then John second, is there anything that you think I need to add in my little summary of the case?

Ashley Keller:  First of all, thanks, Brian, for moderating. And John, it's great to be on this panel with you. You should all give Brian a little bit of credit for the outcome in Mallory. He very graciously agreed with some of his colleagues to moot me ahead of it at Vanderbilt, and it helped me be well prepared for a lot of the tough questions I got at the podium. So thanks for that as well, Brian. And you can share the credit or the blame for what we have today.

Your overview is great. There's just one little correction that could be interesting for folks to talk about. Unlike a lot of these statutes historically and Pennsylvania's original version of these registration statutes, the current version of Pennsylvania statute—which was before the Supreme Court—did not require Norfolk Southern to appoint an agent to accept service of process.

So you just filed your registration paperwork. The law says that when you register, you're agreeing to, as you said, general jurisdiction. But that's a wrinkle that could have been historically significant. Maybe people think it is historically significant.

Most of these statutes that are still enforced do require an agent to be appointed, and you have to say where the agent is going to be and where you can serve them with papers. But Pennsylvania's version, which is a more modern version of registration statute, does not require that. Otherwise, I think your summary was great.

Prof. Brian T. Fitzpatrick:  Perfect. John, now, you filed an amicus brief for Norfolk Southern, correct, in support of Norfolk Southern?

John Masslon:  Correct.

Prof. Brian T. Fitzpatrick:  So you're on the other end of this one. And so is there anything that you want to add or modify about my summary of the decision?

John Masslon:  Well, first, thanks for moderating this, Brian. And congratulations to Ashley for the win. I thought your oral argument was absolutely fantastic, and you were definitely a driving force behind the victory.

I would just quibble with the end of your summary, Brian. I don't think that the Court said that this statute is constitutional. I think that the Court said that the statute does not violate the Due Process Clause and has left it up to the Supreme Court of Pennsylvania to determine whether it violates the Constitution in other respects.

Prof. Brian T. Fitzpatrick:  John, that is a terrific modification/correction because my very first question I wanted to ask you guys is, isn't this a really narrow decision? And I think it's potentially a very narrow decision for a number of reasons.

One reason is Pennsylvania is the only state that has a statute like this is my understanding. So this may not be a big deal if it's only about Pennsylvania. That's one question that I have for you guys.

But number two is Justice Alito wrote a concurring opinion where he said exactly what John said, that this is only about the Due Process Clause today. And there's an open question about whether a statute like Pennsylvania's violates the Dormant Commerce Clause.

And it looked to me—and I'm curious what you guys think—that Justice Alito basically said, “Yes, I think this does violate the Dormant Commerce Clause what Pennsylvania has done here.” Basically, he said they're reaching out to adjudicate disputes that have nothing to do with Pennsylvania.

And so my question is, isn't this a very narrow decision and maybe a very short lived decision, either because it's only about this idiosyncratic Pennsylvania statute or because Justice Alito has basically said, “Hey, when this case comes back under the Dormant Commerce Clause, I'm going to be the fifth vote for John's side of the case.” So what do we think about that? Ashley, let me go to you first on that.

Ashley Keller:  You'll be shocked to hear it, but I don't think that there's a Dormant Commerce Clause problem. So I'll take it in order. I agree with you. The holding is only that the Due Process Clause is not offended by Pennsylvania law.

So if you want to categorize that as a narrow opinion, it won't offend me. That's the holding of the Court. I think it's a pretty big deal and an important clarification about what the Due Process Clause does and doesn't permit sovereigns to do. But it admittedly does not address the Dormant Commerce Clause.

We expressly asked the Court not to address the Dormant Commerce Clause when it came up in some of the Green briefs in support of the other side or in support of neither side in the case of Professor Sachs. So we agree that it's an issue for remand that the Pennsylvania Supreme Court can take up.

Pennsylvania is the only state that has a statute that looks just like this. There are other states, though, that have these statutes that are still on their books. Some of them have been interpreted narrowly under the candidate of constitutional avoidance. And I think that now that we have clarification from the Supreme Court that there's no constitutional problem.

There's a decent chance that they could be given their original interpretation. Georgia, which is referenced in Justice Gorsuch's opinion as the Cooper Tire case, which is reaffirming an older Georgia Supreme Court case called Klein that says that their registration statute does confer general jurisdiction. So it's sort of a combination of statute and judicial interpretation.

So it's not just limited to Pennsylvania right now. But obviously, as Justice Gorsuch says, there was a lot of these statutes in a prior era, and the Due Process Clause and its meaning is not interpreted based on a poll of where the states currently are. The proper interpretation of due process goes back to what it meant in 1868.

And so now the democratic process can work. And to the extent that other states want to mirror what Pennsylvania has done for policy reasons, at least under the Due Process Clause, they have the flexibility to do so. So I think that's important, but we can quibble about how narrow or broad the significance of that is.

Let me not dodge the part of your question about the Dormant Commerce Clause. I obviously have immense respect for Justice Alito, and I'm very grateful that I scooped up his vote —however grudging it may have been. I'm not sure that he was quite so clear as you characterized it, Brian.

He says that there's a fair chance that there would be a Dormant Commerce Clause problem. So he's careful and leaves it open and then discusses some of the precedent, starting with Davis v. Farmers Co-op, which is a 19 teens case from the Supreme Court.

He doesn't talk about Turk, which is from 1932, or Eli Lilly, which is from 1961 from Justice Black, which are opinions from the Court that say states do have the power to require registration, particularly where they require it for businesses that do intrastate business, which is a provision of Pennsylvania law that the concurrence doesn't mention either.

So I think there are a lot of Dormant Commerce Clause issues that probably are going to cut our way on remand given the nature of Pennsylvania law and the way they drew it up and the way other states could draw it up if they chose to be cognizant of the Dormant Commerce Clause issues.

I do also want to say that, again, Justice Alito made his views at least partially known, but he is just one justice. We have the Pork Producer case from the Court this year—another fractured Dormant Commerce Clause opinion with a different lineup of Justices.

I would certainly preview the argument here that a lot of these statutes that require out-of-state corporations to consent to jurisdiction are doing it based on long standing moral principles, that courthouse doors should be open to everyone because that's a fundamental right of persons. And discriminating in favor of residents is not something that a lot of states want to do. And that's grounded in moral justifications.

And so you could have, if this ever does get back up at the Court, a different lineup of Justices maybe reaching the same result as Pork Producers once the due process question isn't on the table.

Prof. Brian T. Fitzpatrick:  Interesting. John, what do you think?

John Masslon:  First, on whether this decision is narrow, I think we're going to have to wait to see what the Court does with the petition in Cooper Tire to determine how narrow it is. I think if the Court denies the petition in Cooper Tire, the decision is much broader here because that would allow for judicial determination that a statute that requires registration to do business in a state also requires consent to general jurisdiction.

There's some foreshadowing in the opinions here that just because the statute here in Pennsylvania was so clear, that's the only reason it doesn't violate the Due Process Clause. But I could see the Court being interested in the argument about whether a judicial interpretation of a statute -- of a state statute, that it requires consent to general jurisdiction does violate the Due Process Clause.

And so I think the decision would be much narrower if the Court were to take up that issue. But if the Court does deny the petition in Cooper Tire, I think it opens the doors to more state courts interpreting their registration statutes to mean that you are consenting to general jurisdiction in the state.

And in that case, the decision here is going to be very broad because I think you will see a number of states that revisit their personal jurisdiction jurisprudence and hold that their consent statutes -- their registration statutes require consent to general jurisdiction in the state.

Now, on the Dormant Commerce Clause issue, I do think that Justice Alito was quite clear that under pike balancing, there is just no legitimate state interest for Pennsylvania to be interested in whether an Ohio resident is injured by a Virginia corporation for conduct that occurs in Utah. I think he's quite clear that he believes that there's a Dormant Commerce Clause issue.

The question is, can he get the other four justices that were in the dissent to come along with him or maybe even some that were in the majority? That's left to be decided. But I would disagree with what Ashley said about whether this is a moral issue. And I think that is a key part of the Pork Producers decision because the center of the Court in Pork Producers said, “We can't do this balancing because it balances moral things versus economic.”

And I think here, you just have economic versus economic. And I think to say that this is a moral issue would make everything moral and would make pike balancing a thing of the past. I don't think you could have pike balancing if you're saying that whether consenting to personal jurisdiction through a registration statute implicates morality at all.

So I think it will be a very interesting issue on remand. One thing to note is that right now, the Supreme Court of Pennsylvania only has six justices. And because this was a direct appeal from the Court of Common Pleas of Philadelphia County that was transferred by the Superior Court to the Supreme Court, there's no guarantee that the Pennsylvania Supreme Court is going to be able to reach a decision on the Dormant Commerce Clause issue.

And if the Court were to split 3-3 on the Dormant Commerce Clause issue, it'd be interesting to see whether they just issue a per curiam order that affirms the Court of Common Pleas decision sustaining the preliminary objections here or whether it would vacate that decision and remand for further consideration of the Dormant Commerce Clause issues.

[CROSSTALK]

Prof. Brian T. Fitzpatrick:  Very interesting, John. Let me ask you both two follow-up questions about the Dormant Commerce Clause issue, okay? Number one, on the pike balancing, there has to be some kind of local interest in favor of the burden on interstate commerce. And Justice Alito said, “I don't understand what local interest Pennsylvania has in a dispute that has nothing to do with Pennsylvania.”

And so I am wondering how is it possible for the Dormant Commerce Clause to come out any other way—at least insofar as we're doing the pike balancing test—with zero state interest on the side of burdening commerce?

Ashley Keller:  Go ahead.

John Masslon:  I don't think it's possible. I think it's interesting if you read Professor Sachs's blog post on the Volokh Conspiracy about this, he kind of agrees that under the pike balancing test, there's no way to say that there is sufficient local interest here that could sustain this kind of statute under the Dormant Commerce Clause.

Now, he goes back to what he believes is the original public meaning of the Dormant Commerce Clause and of the Fourteenth Amendment in arguing, “Well, maybe under the original public meaning that there is actually no Dormant Commerce Clause issue here.” But I think that even professor Sachs would say that under current pike balancing precedent that there is just no sufficient local interest that could sustain the statute.

Ashley Keller:  Yeah. So I'll take both of those pieces. This is super easy under the original public meaning of the Constitution because there is no Dormant Commerce Clause. And every good FedSoc conservative agrees with that.

So if we want to go back to the beginning, I win in a walk. But I can still win under modern doctrine as I sort of previewed for the Court. And I just disagree with the proposition that there's no state interest here.

The reason these statutes were enacted initially—and the very first one was enacted in 1827, and then there's just a long history of these statutes all the way through the International Shoe era—was to put foreign corporations that don't have a right to do business in the state on the same footing as domestic corporations. And you see this language in a lot of the old statutes.

We're going to grant you the right to do business here when you register, and you're going to take all of the same rights and privileges and duties of a domestic corporation. So it's an equality principle. If we're in Illinois and you're from Delaware, we're going to let you be just like an Illinois corporation subject to Illinois law with all of the privileges that come with that in terms of selling goods and services to our citizens but also taking on the responsibilities.

And one of the responsibilities you obviously take on if you're an Illinois company is you can be sued in Illinois's courts, and foreign businesses that want to do business in Illinois have to take on the same burdens. We don't have to do that as a matter of policy. We could say you only have to subject yourself to the jurisdiction of our domestic courts for certain types of disputes.

But to the extent Pennsylvania or Illinois or other states want to make domestic corporations and foreign corporations look exactly the same vis-a-vis the business that they're doing in the state, I think that's completely appropriate and has history and tradition behind it. So I think it would come out fine.

In pikes balancing, the other part of the balancing equation that we haven't discussed is whether this forecloses any interstate commerce. There's zero evidence, zero that this has foreclosed a single dollar of commerce in Pennsylvania. So while there's a lot of wailing and gnashing of teeth, you don't actually have corporations saying we're not going to do business in Pennsylvania anymore.

They might not like this. They might prefer that they could do business in Pennsylvania only living under the Daimler and Goodyear approach to jurisdiction. But they're not actually saying no to the Pennsylvania market. They're not actually depriving Pennsylvania consumers of their goods and services.

So I think pikes balancing is going to be on my side of the equation in the Pennsylvania Supreme Court. And if we ever come back upstairs, argument number one is going to be the original public meaning. And I'm pretty confident Steve Sachs will be on my side there as well.

Prof. Brian T. Fitzpatrick:  John, I want to get your reaction, John, to what Ashley said about equity with domestic corporations being the local interest in the pike balancing test, okay? But before I do, I want to ask Ashley about something else that he said.

And that something else is about whether the other side of the pike equation requires anyone to show that someone has left a market for it to be a burden on interstate commerce. I mean, don't we just have to show on that side that you've made doing business in Pennsylvania more expensive? That is what goes on the other side.

And certainly having to defend these lawsuits that are unrelated to your activities in Pennsylvania has made doing business in Pennsylvania more expensive, right, Ashley?

Ashley Keller:  Not right, but right that that is the question under pike's balancing. The reason I said that they wouldn't do business in Pennsylvania is it seems like an on/off switch. If you're really annoyed by these registration statutes, one choice that you could make as a business is say, “I'm not going to do business there. I just won't register.”

You're right, though, that you could register, and because of that registration, be subject to suits. And because of those suits, if you can prove that that is burdening interstate commerce, you could say that that goes into that side of the scale in the pikes balancing equation. But there's zero evidence of that as well.

This may be jumping ahead to the question about why Mr. Mallory sued where he did. Obviously, people care about where they file lawsuits, or defendants care about where they can transfer them because on the margin, they perceive there to be some little difference in terms of how the case is going to be resolved depending on the jury pool or the judges or the whatever.

But in the grand scheme of things, does having to litigate in Pennsylvania really impose a meaningful burden on interstate commerce compared to litigating in Cleveland or in the D.C. suburbs in Virginia? There's no evidence of that. Norfolk Southern certainly hasn't put any in the record. And you can be rest assured I'm going to make that clear to the Pennsylvania Supreme Court.

Prof. Brian T. Fitzpatrick:  John, sorry to keep you waiting.

John Masslon:  So on the equity issue, I think Justice Barrett does a good job of explaining why it's not equitable here. And that is because, for example, if a Virginia corporation wants to do business in Pennsylvania and Pennsylvania requires that corporation to consent to general jurisdiction there, that means that the Virginia corporation is subject to general jurisdiction in two different localities: both in Virginia and in Pennsylvania.

Well, if a Pennsylvania corporation registers to do business in Virginia, they're only subject to general jurisdiction in Pennsylvania. That is a huge inequity to require that you be subject to general jurisdiction in additional states just because you're registering to do business there. So I don't think that there's any type of equity there.

And as far as cost goes, I think that there is a large increase in cost for defending certain suits. For example, say this case wasn't filed in the Court Common Pleas of Philadelphia County but was filed in Alaska and you have to find local counsel, you have to fly your employees up to Alaska for trial, there's all these additional costs of getting people to the place where trial is going to happen and then trying the case there.

Even in Delaware, the cost would be substantially higher because of the local rules in Delaware with respect to local counsel, for example. There's going to be increased cost if you require that a corporation go throughout the country to defend itself for suits that happen and have no connection to a state.

Prof. Brian T. Fitzpatrick:  Let me ask you my second Dormant Commerce Clause question, which is, if this comes back to the Supreme Court on the Dormant Commerce Clause, does Justice Alito actually have to get five votes for his apparent position on the Dormant Commerce Clause in order to succeed?

Or won't these four Justices in dissent here, won't they just concur in the judgment on a Dormant Commerce Clause opinion and say, “We don't have to reach this Dormant Commerce Clause question because we've already decided this statute is unconstitutional under the Due Process Clause?

And so, I mean, won't that happen if this thing goes back to the Supreme Court—the four are just going to concur in the judgment on the due process issue and not even have to worry about the Dormant Commerce Clause issue. Will they?

John Masslon:  I think that a couple of them would be willing to do that, but I'm not sure if all four would be willing to do that. I don't know if you could get four people to go along with that.

I am afraid that you might have one or two of the dissenters that would say, “Hey, I was in dissent in the -- in Mallory, one, on the due process issue. But the majority holding there is clear. And so therefore, I'm going to go along with it.”

So I think he'd have to at least get a couple votes on the Dormant Commerce Clause issue, and he then might be able to pull along a few votes on the due process issue as well. But I think what confuses a lot of people here is why they just didn't do that here and have a plurality opinion that says that this violates the Due Process Clause, have an opinion by Justice Alito in the middle saying this violates the Dormant Commerce Clause, and then have a dissent that says, “Well, this doesn't violate the Due Process Clause, and we’re not going to -- we shouldn't address the Dormant Commerce Clause issue.”

And, I mean, this might be jumping ahead, but that might be the reason that there was such a delay here. And what appears to be an odd assignment of this case to Justice Gorsuch is that I could see that Justice Alito might have originally had the majority opinion in this case and had voted with the dissenters to affirm the Pennsylvania Supreme Court.

But then once opinions got circulated, he decided that he wasn't comfortable with affirming on this different ground of the Dormant Commerce Clause, switched his vote to affirming, and then you had the switch of the majority and the plurality opinion to Justice Gorsuch because my read at oral argument, at least, was Justice Alito was one of the justices that were most favorable to Norfolk Southern.

I thought this would be a 5-4 decision, as I said in the Courthouse Steps afterwards. But I thought he was solidly in Norfolk Southern’s corner and that it would be Justice Barrett that was going to be the swing vote here.

Prof. Brian T. Fitzpatrick:  Interesting. So let's just jump in on that real quick. So, as John notes, this was a strange assignment to give to Justice Gorsuch because Justice Gorsuch already wrote an opinion for the Court from the November sitting. And there are, I guess, now two Justices that did not write any opinions for the Court from the November sitting because we now have the affirmative action cases, and those were both written by Justice Roberts.

And so I believe we have two Justices that wrote nothing in November, and we have Justice Gorsuch writing twice in November. That's very unusual because they usually try to spread the opinions around so that everyone gets one before someone gets two.

And so this has led to a lot of speculation that someone else had the majority opinion or the opinion for the Court, and then something happened. And Justice Gorsuch ended up getting it because that person dropped out once they got into the opinion writing process.

And so, John, your theory there is Alito had the assignment first, and then he decided that he couldn't write it on the due process grounds anymore, and so he ended up just writing a concurring opinion on the Dormant Commerce Clause instead. Did I get that right?

John Masslon:  I think he had the majority. I don't know what his majority said. It might have been affirming on Dormant Commerce Clause grounds. Was unable to get five votes on that and then decided—kind of like he did in the SORNA case—that he wanted a majority and didn't want a completely splintered opinion and so decided instead to switch his vote and issue this concurring opinion that vacates the Pennsylvania Supreme Court's decision.

Prof. Brian T. Fitzpatrick:  Ashley, do you have a theory about this—who had this and what happened?

Ashley Keller:  I'm speculating right alongside both of you. I agree it's pretty unusual for Gorsuch to have two opinions from November. They're both 5-4s, by the way. And both Kavanaugh and Alito didn't get any majorities. So a busted majority theory makes sense.

It could have been that Alito was always voting the same way, but he tried to write the majority to put a heavy thumb on the scale in favor of the Dormant Commerce Clause, and the other four wouldn't go along with it. So it became a concurrence in part and a concurrence in judgment.

It could be that someone else switched around. There's a lot of different possibilities. I will confess I had the same sort of read after oral argument as John did when it looked like Alito had this opinion and the chief -- my speculation was the same as everyone else's, that he was going to keep affirmative action.

My heart sunk a little bit. I didn't think that Alito was necessarily in my corner, but it just sort of shows you can never be sure until the ink is dry on the judgment. I don't think it's that surprising that they didn't reach the Dormant Commerce Clause here. I think it would have been really tough for them to do so. It was not part of the QP.

Norfolk Southern made a very deliberate, I think, tactical choice to keep it out. It's not even clear that it was properly preserved in the Pennsylvania Supreme Court. If you look at the original objections in the trial court, the Dormant Commerce Clause doesn't appear, so there could have been a waiver issue.

So I think they took the case to resolve the due process question. It would have been a tall order to get five votes to say this was a Dormant Commerce Clause violation.

And to your earlier question, Brian, to my mind, if they're sufficiently formalist, if Mallory comes back up, the due process question has been resolved as law of the case. So they shouldn't be changing that view. And if it comes up in a separate case as opposed to Mallory too, obviously, this opinion is stare decisis.

They can overturn it if they think the stare decisis factors are met, but they otherwise ought to be sticking to the due process precedent and then resolving the Dormant Commerce Clause kind of on its own bottom.

Prof. Brian T. Fitzpatrick:  Well, you know the Justices don't do that, right?

Ashley Keller:  I said if they were sufficiently formalist. I caveated it.

Prof. Brian T. Fitzpatrick:  And I think I agree with you, Ashley, that I think it would have been very unusual for Alito to get an assignment to write a majority opinion based on the Dormant Commerce Clause here because that issue was just not really squarely before the court. And so I think that would have been a strange assignment.

And so if he got it, I think he probably got it on the Due Process Clause, and then something happened when he got into it, and he thought that this dog is not barking the way that he thought it was going to bark.

So, anyway, very interesting, we have a number of questions from our audience on -- in this genre of how narrow this decision is. So a couple of our audience members want to ask you about this case called BNSF v. Tyrrell. They are worried that this opinion is inconsistent with BNSF v. Tyrrell, and therefore, that this actually could be a much bigger deal than I have been letting on here.

And I'm curious if you guys have any reactions to that. Is this opinion inconsistent with the general jurisdiction precedents that the Supreme Court has been articulating over the last few years?

Ashley Keller:  Well, much to my chagrin, Justice Barrett thinks it is, but I don't think it is. And this really, to my mind, just goes back to the overarching framing of this case. Mr. Mallory's position was Daimler and Goodyear are good law. You don't have to overturn anything. Consent is just a separate category.

And if you consent—whether it's through a contract or through a registration statute—that can be a sufficient ground for jurisdiction. And the amount of jurisdiction just depends on the nature of your consent. If you consented just to general jurisdiction for residents, then that's what you consented to. If you consented to general jurisdiction for everybody, that's what you consented to.

And that case out of Montana—which is a different railroad case, I guess—didn't say anything about that. It was just sort of a traditional application of Daimler and Goodyear and whether contacts could be the thing that supply general jurisdiction. And the Court said no.

So my view would be this is not inconsistent with that case. But obviously, the dissenters took a different line and said, this is essentially putting Daimler and Goodyear halfway out the door. And there's a logic to that.

The legislatures of the states can put in place registration statutes that look like Pennsylvania's. And if corporations choose to register because they don't want to give up on the Montana market, for example, then they will be subject to general jurisdiction based on their consent. But it's not contacts that are doing the work. It's the consent that's doing the work.

Prof. Brian T. Fitzpatrick:  John, what do you think?

John Masslon:  I mean, no surprise. I agree with Justice Barrett that this decision is in tension with the Court's prior general jurisdiction precedent. It allows either state courts or state legislatures to do an Enron on the Due Process Clause and require any company that registers to do business to “consent to general jurisdiction in that state.”

I was a bit surprised by two things on the “consent issue” in the opinions in this case. The first is there was a lot of discussion at oral argument but absolutely none in any of the opinions about the fact that here, Norfolk Southern can't just pull out of Pennsylvania. Federal law requires it to operate within the Commonwealth of Pennsylvania.

So, unlike other businesses that can decide, “We're going to just pull out of Pennsylvania,” that's not the case for railroads—especially tier one railroads where there's federal law that requires them to operate in a jurisdiction. And the second, as Justice Barrett points out, it’s not really -- and the Pennsylvania Supreme Court said in the decision below, “It's not really consent here.”

What you're doing is you are forcing somebody to consent. “You are forcing somebody to accept general jurisdiction in a state as a condition for doing business in that state.” And there was a lot of discussion about unconstitutional conditions at oral argument. And again, you don't see much of that at all in Justice Gorsuch's opinion for the Court or in his plurality opinion about whether this was actual consent.

And I don't see how you can say that forcing any company that does business in a state to accept general jurisdiction is consent as we know it. It's just like if you sign a contract because somebody has a gun to your head, you're not consenting to that contract. You're just agreeing to it to save your life here. Companies are accepting general jurisdiction just because that is what the state is requiring to register to do business there.

Ashley Keller:  Well, yeah, I agree that that's sort of the issue. I guess I would still take issue with the idea that this is the same thing as pointing a gun to somebody's head. We just have a pretty different view. And I guess the majority and the dissent have a different view.

 

But Pennsylvania saying, “If you want to do business here and get access to our market and make profit off of our citizens, this is the price” is not the same thing as someone pointing a .357 at your head and saying, “Sign this contractor, or I'll pull the trigger.

And so you're essentially trying to write in, I think, to a constitutional provision contract of adhesion type principles—which normally your organization is not very favorable to, I might add. But you're essentially saying, “Oh, it's just too much pressure. The big $50 billion Fortune 500 company just couldn't possibly resist the Pennsylvania market, so they had no choice,” which a lot of consumers say when they sign arbitration clauses, “We just -- we had to get an iPhone. We had no choice.”

You can't live without a smartphone today, and you always shake your head and say freedom of contract to that. So I'm a little resistant. By the way, I agree with you as a matter of policy a lot of times. But I'm pretty resistant to the idea of writing those sorts of contract of adhesion principles into the Due Process Clause, especially when I have as much history and tradition on my side here that states did this routinely.

John Masslon:  Obviously, we have just a disagreement on the history, which I think is interesting. I know just something to address is what is the correct originalist approach here? Just because that is -- there was a chance that this could be a huge redo of personal jurisdiction in the original public meaning of the Due Process Clause here. And we didn't get that. We just got an opinion that affirmed on Pennsylvania Fire grounds.

And I think that the disagreement is like, where is that history. I think Justice Barrett does a really good job of citing the 1867 Massachusetts Supreme Judicial Court decision that said that these type of general consent by registration statutes violate due process. The first decision to actually accept one of these statutes wasn't until the 1890s—again, in Massachusetts—and the first actual statute and not judicial determination that was clear that there was consent by registration via a statute according to Justice Gorsuch's own opinion, was in, I think, 1892.

So it was in the 1890s, and everything before that wasn't really consent by registration. So I think there is just a disagreement about who the original public meaning -- which side the original public meaning is.

Ashley Keller:  Yeah, I love that.

 

[CROSSTALK]

Prof. Brian T. Fitzpatrick:  I want to address this, Ashley, in some detail, I think is, what is the right answer here as a matter of original understanding? John is right that scholars were very excited about this case because we thought it could be an originalist takeover of the personal jurisdiction space.

We could go back to Pennoyer v. Neff if we're going to be good originalists and all that jazz. And that really didn't happen. The Court basically said, “We decided this 100 years ago in Pennsylvania Fire, and it's not been overruled, and we're not going to overrule it today.”

And so we didn’t get -- I didn't think we got the full inquiry into what the original understanding was here. And let me ask you a pointed question, Ashley, and that is Justice Barrett says in footnote five of her dissent.

She says, “Mallory—that's you, Ashley—Mallory cannot find an example of an exercise of registration jurisdiction without a forum connection” because, remember, that's what we're dealing with here. So it has nothing to do with Pennsylvania. You could not find a single example of registration jurisdiction without a forum connection until 1882.

That is well after the due process clause was ratified. Should we be basing the original understanding of the Due Process Clause based on something that didn't happen until 15 years later?

Ashley Keller:  Yeah. So a couple of points about that. First of all, I'm right on the original understanding. Second of all, I do think originalism was important in this case. Let's remember, as you noted at the very outset, it was an interesting lineup to get to five. And I am highly confident that the original public meaning arguments that we made at least helped some justices say that Pennsylvania Fire wasn't egregiously wrong.

And so having that originalist history was helpful. And there are portions of Justice Gorsuch's opinion that talk about the original history. It wasn't the sort of magnum opus that maybe Steve Sachs and others were hoping for. But there's history in here, and originalism matters.

And as I like to tell my compatriots in the plaintiffs’ bar, “You ignore originalism to your peril” because even if you don't agree with it as a philosophy, as I firmly do, a lot of people do think it's really important. And they have robes and are on the bench and have been confirmed by the Senate and appointed by the President. So you ought to think about this and not just sort of give it the back of a hand.

Let me go back to your question, though, and let's get into it. So I cited a ton of statutes from before 1868 where the states enacted laws that very clearly by their text said that foreign-cubed situations are fine. I think Justice Barrett, with all due respect, is succumbing to the fallacy of judicial supremacy.

Just because I don't have a case that says, “This is okay” doesn't mean that the state legislatures—which are, after all, the ones who ratified the Fourteenth Amendment—didn't think that this was okay. And the laws that they had on their books contemporaneous with the ratification, I think, is a pretty powerful originalist source that says, “Yeah, these laws were okay.”

And I didn't bring this up at oral argument because it would have been a hot-button issue, and I wanted to appeal to everybody across the ideological spectrum. But let's talk about Dobbs. Justice Alito has that chart that goes through all of the statutes dealing with abortion. He doesn't then say, “Here are all the cases that said these statutes are fine.”

The statutes by themselves were really powerful originalist evidence about what the contours of the Due Process Clause meant. And after all, I'm actually trying to interpret the real Due Process Clause, not the substantive Due Process Clause. So I think pointing to statutes is a perfectly legitimate way to show that the originalist history goes my way.

And the other point I would make to Justice Barrett very respectfully is John just talked about an 1867 case that said that these statutes violate due process. There's no way that's true because there wasn't a Fourteenth Amendment in 1867 that would have applied to the states. It only came into effect in 1868.

There are some state courts that didn't give the statutory text their full sweep. They said, “We don't think the legislature really meant it.” That's not the due process clause doing the work. That's just proof that there used to be non-textualist judges in the 1800s, too, who didn't just say, “The text is the text is the text.” And that's fine.

They have a right as their state judiciary to say, “Wielding judicial power, we're not going to give the statutory text its full sweep.” But I don't think that's proof that there's a Due Process Clause problem. That's just proof that, as a matter of policy, some judges said, “We don't like giving the text its full sweep because it's kind of weird to hold somebody accountable even though there's no forum connection.”

There isn't a single case in the United States that finds one of these statutes unconstitutional under the Due Process Clause until 1971—the Fourth Circuit. So that also raises an interesting originalism question that we serious originalists have to grapple with. Who bears the burden of proof?

I think the rule ought to be, if you're going to snatch something away from the political process, if you're going to say that this is no longer going to be susceptible to ordinary democratic norms because we at an important moment in history came together and in an overwhelming consensus wrote something into our nation's foundational legal document—the Constitution—the burden is on you to snatch something away from the political process.

And so I don't think Justice Barrett's handful of cases that not on due process grounds, but on policy grounds, said, “Don't pay any attention to the plain statutory text.” I don't think that carries the burden.

So I think I've got the better argument. But I agree. It's not like reasonable originalists have to come out my way. It's ineluctable that the history is on my side. I think I had a stronger case by a healthy margin, but there's room for disagreement to be sure.

Prof. Brian T. Fitzpatrick:  John, any response there?

John Masslon:  Yeah. I think even if you as far as the statutes go, I thought this was interesting because at oral argument, I know that Ashley and Justice Barrett had a long colloquy about these statutes and about how to read the different statutes from the 1820s onwards. Even Justice Gorsuch's opinion—like at the top of page seven—as far as statutes that kind of allow these foreign-cubed decisions, the first state statute that he cites is an 1889 Nevada statute.

Everything else that he cites has some kind of exception that isn't truly consent by registration for all corporations. And so I think if you look back to what was the law in the 1860s, it was clear that no state really endorsed these consent by registration statutes.

You might have had the federal government that did adopt some type of consent by registration statute in, I think, 1867. But as far as states go, the first one that even Justice Gorsuch argues allowed that was in 1889 in Nevada. I just don't think that you can say just because there's a lack of cases striking these down until the Fourth Circuit in 1971, that that means that the states didn't find this problematic.

What you had was state courts and federal courts that were interpreting state laws very narrowly to avoid striking down the statute completely as violating due process and just construed the statutes in a narrow way so that as to avoid the constitutional issue that was presented.

And I think that you saw -- that's why it took so long for this case to get back up to the Court. And it wasn't until you had Cooper Tire and Mallory decided in such a short time frame that the Court finally agreed to resolve this dispute.

And I do agree with Ashley that it's not clear cut on who has the better side of it on the original public meaning. In my view, Justice Barrett and the dissenters in Norfolk Southern have the better argument there. But I do think that reasonable originalists can disagree about what the original public meaning of the Due Process Clause was.

Ashley Keller:  I want everybody to nerd out and go pull the appendix that Mallory attached that has all these statutes. Nevada in 1889 is not the first one. There are tons of states that have statutes like this earlier. A lot of them were industry specific. So they required general jurisdiction just for insurance companies or just for railroad companies.

But once you can do it for one type of company, you can obviously, as a constitutional matter, do it for every type of company. And there are 18 states that had at least some type of general jurisdiction consent requirement—foreign-cube requirement—for at least one company or a type of company prior to 1868.

Eighteen is more than half the Union since there were only 35 states in 1868. So you guys can pull the appendix and see who's right about this. But I, of course, think Mr. Mallory is right.

John Masslon:  Just to be clear, there was no Equal Protection Clause before 1868.

Ashley Keller:  Of course.

John Masslon:  So you couldn't make an equal protection challenge to a statute that treated one industry different from another industry.

Ashley Keller:  Agreed. There's also no equal protection clause in the Fifth Amendment, but we can talk about that later.

Prof. Brian T. Fitzpatrick:  You guys can correct me if I'm wrong, but I gather that Steve Sachs's view—which we've invoked here a couple of times already—is that there was something in what he calls the general law, which is basically, as I understand it, common law, that said states were not supposed to be interfering with each other.

And so if he's right that that was the original understanding of how these rules worked, there were basically comedy rules between the states in the same way there were comedy rules between nations. I mean, can we just say then that even if it's not in the Constitution, it's in the general law?

It's in the common law that states should not be reaching out and taking disputes that have nothing to do with them and bringing them back into their courts? So if we don't want to constitutionalize it, fine. But isn't the original understanding that states should keep their courts out of other states’ business, Ashley?

Ashley Keller:  It depends on what you mean by out of other states’ business. So I'm confident Steve Stacks would be on my side with this answer as well.

Back in the 1820s when corporations were first coming on the scene, it wasn't like today where you go to LegalZoom or whatever and pay $30, and you can have a corporation. Sometimes, you had to go to a state and ask the legislature, “Hey, can I form a corporation that gets limited liability with my five friends? We're going to contribute capital and start this thing that's going to sell widgets.”

So it was a big deal to take on the corporate form. And you were a pure creature of the state law that created you, and it was a matter of comedy that other states would choose to let you in. So just like you needed to go to the state legislature of Maryland to start your railroad company, you needed to go to the state legislature of Virginia and say, “Can I have permission to get a license and incorporate in Virginia to have my track go into your state?”

So once you're crossing state lines with this fictitious creature that corporate law has created—and there's now a whole artifice around it that's much more complicated—the state that you're going into has an absolute right to say, “Here are the conditions on you entering our state.”

We can have a separate dialogue about the Dormant Commerce Clause like we already have and whether -- I prefer the Wakeful Commerce Clause, as Justice Gorsuch said in Pork. But putting the Commerce Clause to one side—which was not a barrier in the 1820s—nobody thought of Article I Section 8 that way, not even Chief Justice Marshall, who first mused about the possibility of a dormant version of the Commerce Clause.

The state that you were going into had an absolute right to condition your privilege to operate in the state, and so it would not be considered as an original matter or of the general law interference with, for example, a Maryland railroad company coming into Virginia for Virginia to say, “Here are the things that we're going to demand of you if you want to incorporate here.”

John Masslon:  And I agree with Ashley. But I think that's what Steve Sachs would say. I mean, just look at his blog post again that he has on the Volokh Conspiracy going through the history of the corporate being and how the corporations can cross state lines.

But I do think that there is an issue of comedy here. You see in what the Court said in World-Wide Volkswagen and a bunch of other cases that Justice Barrett has a string site in her dissent that say, “You can't have a state that is trying to impose its views on other states.”

And that's what you're allowing if you allow, for example, Pennsylvania to accept general jurisdiction over a Virginia citizen suing a Virginia corporation for actions that occurred in Ohio. Well, maybe Virginia courts or Ohio courts have one view of how those kind of disputes should be resolved and Pennsylvania courts have a different view.

And you shouldn't allow Pennsylvania to impose its views on a dispute that it has no connection to. I think that’s the core of the comedy principles within the Constitution.

Ashley Keller:  I'll say super quickly. I think choice of law is fascinating, and that choice of law question is a big deal. And I don't even know what I think the right answer is, but I think it's hard and very interesting and not the same as jurisdiction.

Prof. Brian T. Fitzpatrick:  Let me ask you guys one more question before we call it an hour here, if you don't mind, and that is, I don't really understand why the consent theory here depends at all on corporate registration.

Why couldn't a state just write a statute that says, “If you do business in our state, then you have consented to general personal jurisdiction?” The corporation can read the statute. The corporation is sophisticated. We're not incorporating the anti-adhesion contract principles into the Due Process Clause.

So why wouldn't that be okay under the consent theory, Ashley? And if that is okay, then that does seem to be perhaps a very dramatic expansion of personal jurisdiction here.

Ashley Keller:  Thank you for your question, Justice Kagan, because she asked me exactly that. I'll start by giving you the same answer I gave to her because the precedent says so. That's the line that Pennsylvania Fire draws between deemed consent, which is sort of based on a waiver or constructive knowledge theory, and actual consent where you actually sign the piece of paper.

So I had to defend Pennsylvania Fire for obvious reasons. If you just put that to one side, do I think it would be unconstitutional for a state to do that under the original meaning of the Due Process Clause? I don’t know. I think it's a more interesting question.

None of the registration statutes that I pointed to historically did it that way. They required a more affirmative manifestation of consent. You have to file a piece of paper. You have to file the board resolution that appointed the agent to accept service of process. So typically the states required more formality than just actually doing business and having your consent deemed by conduct.

Do I think, though, that the Constitution says that what all those states were doing is the bare minimum and you couldn't do it through conduct? That's a tougher question that I admittedly wanted to dodge based on precedent because it would have been a very aggressive answer for me to say yes to her.

John Masslon:  I think there's no difference between deemed consent by just doing business in a state and consent by registration. I think under Pennsylvania Fire, there's just no line there. And you see that in Cooper Tire and in Georgia. Even though there was registration there, there was no thing that said either under the statute or the papers that were signed that there was consent to registration.

Instead, it was just a court decision that said, “Well, we think you consented to -- we deemed you to have consented because you're doing business in the state and have registered to do business here.” And again, that's why I go back to the answer I gave earlier about it will be interesting to see what the Court does with Cooper Tire during the cleanup conference.

Prof. Brian T. Fitzpatrick:  Very interesting. Both of you, thank you so much for your time today. I'm going to toss it back to you, Sam, to close us out.

Sam Fendler:  Thank you, sir. And on behalf of The Federalist Society, I want to thank Ashley and John for joining us today. Thank you to you, our moderator as well, Brian, for facilitating such a great conversation. We appreciate the three of you sharing your time and your expertise with us.

I want to also thank our audience for joining us. We greatly appreciate your participation. Please check out our website, fedsoc.org or follow us on all major social media platforms at FedSoc to stay up to date with announcements and upcoming webinars. Thank you all once more for tuning in, and we are adjourned.

 

[Music]