Dormant Commerce and Corporate Jurisdiction

Since 1945, the Court has sought for substantive rules of personal jurisdiction in the depths of Fourteenth Amendment due process. Mallory v. Norfolk Southern Railway Co. returns “dormant commerce” doctrine to the field—a place it occupied for several decades in the twentieth century, before being swept away and largely forgotten after International Shoe.

This Article assesses the impact of dormant commerce’s return. Under today’s doctrines, plaintiffs like Robert Mallory may face an uphill battle; yet they also have some good arguments on their side. On original grounds, moreover, it’s far from clear that there is any dormant commerce doctrine, or that such a doctrine would have anything to say about the existence, powers, or internal affairs of state-created corporations in other states. At the Founding, states didn’t have to recognize the privileges of foreign corporations at all, so they could make consent to local jurisdiction a condition of those privileges’ local exercise.

By destroying the foundations of this earlier doctrine, the Supreme Court’s turn-of-the-century dormant commerce cases eventually led to the recentering of personal jurisdiction on due process instead—and on complex and contradictory jurisdictional rules, less concerned with enforcing the actual Fourteenth Amendment than with preserving the legacy of International Shoe. If our doctrines of personal jurisdiction aren’t going to make sense anyway, they may as well actually be law. Mallory doesn’t quite get us there, but at least it points us in the right direction.

The intuition here is a simple one: “states don’t have to have corporate law.” If six Pennsylvanians at the Founding wanted to incorporate their backyard wheatfields, buying supplies and holding property under a common name, they’d have needed a Pennsylvania charter to do it; a permission slip from Virginia’s legislature wouldn’t have helped. For Pennsylvania to refuse to recognize Virginia’s corporate charter wouldn’t be to prefer its own goods and services over Virginia’s (a potential dormant-commerce problem) or its own citizens over Virginia’s (a potential Privileges-and-Immunities problem); at most, it’d prefer its own law over Virginia’s for governing affairs inside its borders, something Pennsylvania has every right to do (and not a Full Faith and Credit problem). Nor would it treat these six citizens unfairly or arbitrarily (an equal protection problem); they could ask Pennsylvania to incorporate them on the same terms that anyone else can.