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07/26/2022

Stephen Sachs on Mallory v. Norfolk Southern
Michael Ramsey

Stephen E. Sachs (Harvard Law School) has posted his Brief as Amicus Curiae in Support of Neither Party, Mallory v. Norfolk Southern Railway Co. (42 pages) on SSRN.  Here is the abstract:

Mallory v. Norfolk Southern Railway Co. [pending at the Supreme Court next term] presents the question whether the Fourteenth Amendment’s Due Process Clause prohibits Pennsylvania from requiring corporations to consent to general jurisdiction in order to do business there. The answer to that question is no. Neither the Court’s precedent nor the original Fourteenth Amendment forbids Pennsylvania from requiring such consent, nor from exercising jurisdiction once consent is secured.

What may invalidate Pennsylvania’s requirement, however, is the Court’s modern doctrine on the “dormant” component of the Commerce Clause, which is currently thought to restrict state laws imposing serious burdens on out-of-state economic actors. The difference between due process and dormant commerce matters: substantive requirements of the Fourteenth Amendment may not be relieved by Congress or by treaty, while dormant commerce restrictions might be. The Court should not limit state jurisdiction under a mistaken due process theory that in passing also limits the authority of Congress (and of the President and Senate). Instead, the regulation of interstate corporate activity should be left up to the Interstate Commerce Clause, to be addressed by the state courts on remand.

And from the Summary of Argument, more on the original meaning of the due process clause:

1. Pennsylvania’s registration requirement and its exercise of jurisdiction do not violate due process. The governing precedent is clear on the matter, see Pa. Fire Ins. Co. of Phila. v. Gold Issue Mining &Milling Co., 243 U.S. 93 (1917), and this precedent should not be overruled. In particular, the modern case law on general jurisdiction, from International Shoe Co. v. Washington, 326 U.S. 310 (1945), through Daimler AG v. Bauman, 571 U.S. 117 (2014), down to the present day, is in no conflict with Pennsylvania Fire. These modern cases are explicitly limited to jurisdiction over unconsenting defendants. One may respect the force of these precedents without expanding them to cover defendants whose consent has been granted, albeit grudgingly—and without overruling other precedents along the way.

2. Stare decisis aside, Pennsylvania Fire should not be overruled for the simple reason that it appears to have been correct. The Fourteenth Amendment did not impose substantive rules of jurisdiction, hidden (as if by invisible ink) within the words “due process of law.” It required only that a state court have jurisdiction under applicable sources of law, including principles of general and international law, which have long recognized consent as an appropriate ground for the exercise of jurisdiction. Pennoyer v. Neff, 95 U.S. 714, 733, 735 (1878); see generally Sachs, Pennoyer Was Right, 95 Tex. L. Rev. 1249, 1297–1300 (2017); Sachs, The Unlimited Jurisdiction of the Federal Courts, 106 Va. L. Rev. 1703, 1723–26(2020).

3. These principles applied equally to corporations such as respondent Norfolk Southern Railway Co. American courts traditionally understood corporations as creatures of state law, lacking in their own right the privileges and immunities of citizens. Paul v. Virginia, 75 U.S. (8 Wall.) 168, 178–82 (1869), overruled on other grounds, United States v. Se. Underwriters Ass’n, 322 U.S. 533 (1944). States could deny corporate privileges to foreign corporations altogether, or they could extend these privileges by statute or by comity; they could also impose restrictions on the local exercise of these privileges, such as by requiring consent to suit via the appointment of agents for service of process. See Bank of Augusta v. Earle, 38 U.S. (13 Pet.) 519, 586–91 (1839); Lafayette Ins. Co. v. French, 59 U.S. (18 How.) 404, 407–09 (1856); Pennsylvania Fire, 243 U.S. at 95–96. Courts in this period ... did not disagree on what would happen if a corporation really did register, as Norfolk Southern has, under a statute making registration a ground for general jurisdiction. Such requirements were not regarded as unconstitutional conditions, but as lawful regulations of the corporate form.

Seems probably right to me (as to the due process issue).  Put another way, I'm not aware of any enactment-era or immediate post-enactment practice or commentary suggesting that states couldn't impose this requirement.  I have a lot more reservations about the dormant commerce clause issue, but then I have a lot more reservations about the dormant commerce clause generally.