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Supreme Court Allows Unusual Pennsylvania Law on Corporate Suits

Submitted by jhartgen@abi.org on

The Supreme Court upheld a Pennsylvania law on Tuesday that requires corporations to consent to being sued in its courts — by anyone, for conduct anywhere — as a condition for doing business in the state, the New York Times reported. Only Pennsylvania has such a law. But the ruling may pave the way for other states to enact similar ones, giving injured consumers, workers and others more choices of where to sue and subjecting corporations to suits in courts they may view as hostile to business. The Supreme Court was split 5 to 4, with Justice Neil M. Gorsuch writing for the majority. In ruling against the corporation at the center of the case, Norfolk Southern, Justice Gorsuch rejected its argument that it was entitled “to a more favorable rule, one shielding it from suits even its employees must answer” under the Fourteenth Amendment. In dissent, Justice Amy Coney Barrett, joined by Chief Justice John G. Roberts Jr. and Justices Elena Kagan and Brett M. Kavanaugh, wrote that Pennsylvania’s law unfairly harmed other states’ rights because it imposed “a blanket claim of 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 freight car mechanic in Virginia and Ohio for Norfolk Southern Railway, which was incorporated in Virginia and, at the time, was based there. Mallory contended that his job entailed spraying boxcar pipes with asbestos and demolishing car interiors that, he claims, contained carcinogens. The question in the case was whether he could sue in a third state with no concrete connection to the suit: Pennsylvania. The decision came after the derailment of a Norfolk Southern train carrying toxic chemicals near the Pennsylvania state line, which amplified the stakes of the case. A fire ensued and led to fears of an explosion, prompting the authorities to burn off some of the train’s hazardous cargo and raising worries about harms to public health and the environment.