The Potential Application of Consent-by-Registration Statutes to Protected Expression
Maclain Conlin
The Due Process Clause of the Fourteenth Amendment grants corporations a substantive right to be free from civil claims in state court unless it is either incorporated in that state or the conduct at issue in the case occurred there. However, in Mallory v. Norfolk Southern Railway,[1] the Supreme Court held in a 5-4 decision last year that states can actually avoid this protection using a clever legal structure. In Mallory, Pennsylvania informed corporations which registered in its jurisdiction that, by receiving this registration, they were consenting to be sued in that state’s courts and forfeited their Fourteenth Amendment rights.[2] The Court found that because corporations consented to this requirement by maintaining their registration, they could not challenge the law, because it didn’t force them to give up their rights. It simply offered a benefit, and allowed them to waive their due process rights in order to receive it.
Although the Court did not address this concern in its opinion, Mallory may have a significant impact on how states regulate the First Amendment rights of corporations. Federal courts have often invalidated laws which impose direct legal penalties on private companies for protected speech.[3] However, under Mallory, if a state simply notified corporations that, by doing business in its jurisdiction, the company consented to its laws regulating corporate speech, those laws would theoretically not coerce corporations at all. Since they consented to the regulations and therefore forfeited their “legally protected interest,” they would lack standing to challenge the regulations. Given recent criticism from both sides of the aisle about the Court’s corporate speech precedents,[4] this argument is more timely than ever before. This essay explores the potential of such a claim by looking at the context and legal background of Mallory, comparing it with the Court’s corporate speech precedents, and finally offering a few predictions about how federal courts would likely rule on this claim if it came before them.
The Due Process Clause from Pennoyer to Mallory
First, in order to evaluate Mallory’s extent, we must examine the legal background which gave birth to it. To start at the very beginning, the Fourteenth Amendment was ratified in 1868 because states had not adequately protected certain rights which were seen as fundamental to “ordered liberty.”[5] One of these rights was the ancient English protection against being subjected to government authority without “due process of law.”
Due process of law, according to the Framers of the Fourteenth Amendment, meant at a bare minimum that any tribunal which presided over a citizen must be validly constituted-that is, the court must have jurisdiction over the case and be able to issue enforceable judgments.[6] At this point, due process also shifts into federalism concerns. The early nineteenth century had witnessed numerous disputes between states whenever they tried to extend their authority outside of their own jurisdiction, such as the Toledo War between Michigan and Ohio in the 1830s.[7] The Due Process Clause ensured that these overreaches by states would end, limiting the jurisdiction of state courts and executive officers to those who were actually present in the state or had minimal connections to it. In other words, if a state court in Georgia entered a judgment against someone who resided in Michigan for conduct that occurred in Pennsylvania, this would violate the Due Process Clause, because Georgia courts do not possess authority over such cases and would not, for the purposes of that judgment, be validly constituted. This principle was already ingrained in American law before 1868, but the Fourteenth Amendment made it a federal question, reviewable by the Supreme Court, to ensure uniformity.[8]
The Supreme Court, taking up this responsibility, has heard several key due process claims over the last century and a half relating to the territorial jurisdiction of state courts. In Pennoyer v. Neff,[9] the Court said state tribunals could not exercise jurisdiction over a person unless he was physically present in the state, and later on, in International Shoe Co. v. Washington,[10] the Court modified this standard slightly to say that a civil case must have minimum contacts with the forum such that a suit would not offend traditional notions of justice.
The case most relevant to the present question is Pennsylvania Fire Co. v. Gold Issue Mining Co. There, a suit was brought in a Missouri state court for a fact pattern that had nothing to do with the Show Me State. Nevertheless, the Court held that because the defendant, the Pennsylvania Fire Co., had done business in Missouri for ten years with the knowledge that the state allowed such suits, it had therefore consented to the court’s jurisdiction. Though it did not rely very much on history, Pennsylvania Fire Co. was also part of a larger tradition of allowing states to impose conditions on corporate registration[11] pursuant to their sovereign “power to exclude.”[12]
Pennsylvania Fire Co. was decided in 1917, but it remains good law, and was applied by the Court in Mallory last year to a very similar set of facts. Robert Mallory, an employee at Norfolk Southern Railway, alleged that he had been exposed to carcinogens while on the job between 1988 and 2005. Even though Mallory was a resident of Virginia, his alleged exposure had occurred in Ohio and Virginia, and Norfolk Southern Railway was headquartered in Virginia, Mallory brought suit against his former employer in Pennsylvania, presumably because that state’s courts are known for being friendly to civil plaintiffs.[13] Norfolk Southern Railway objected to the suit, arguing that Mallory’s choice of Pennsylvania as a forum violated its rights under the Due Process Clause of the Fourteenth Amendment, but the Court rejected this argument. In a 5-4 opinion (with portions that only represented a four-justice plurality) that scrambled normal ideological lines, Justice Gorsuch upheld Pennsylvania Fire Co. Pennsylvania law required, as a prerequisite for registration in the state, that companies consent to suits under general jurisdiction, which do not require any special connection to the state to be heard. By securing this registration with knowledge of its “consequences,”[14] Norfolk Southern Railway had “accept[ed] an in-state benefit with jurisdictional strings attached…”[15] Although states could not impose this kind of liability by force, Pennsylvania had not done so. It had used a carrot, not a stick.
Justice Jackson filed a four-page concurrence which helped to flesh out the deeper issues lying beneath the case. As she saw it, the right to be free from the sort of suit Norfolk Southern Railway was facing is an “individual, waivable constitutional right.”[16]
“In other areas of the law,” she continued, “we permit States to ask defendants to waive individual rights and safeguards….Moreover, when defendants do so, we respect that waiver decision and hold them to that choice, even though the government could not have otherwise bypassed the rules and procedures those rights protect.”[17]
To hold that Pennsylvania Fire Co. had a right to be free from suits even when it was not subject to legal coercion, wrote Justice Jackson, would place this particular due process right on a “pedestal.”[18]
In her dissent, however, Justice Barrett did not agree with this approach.
Pennsylvania’s law, she wrote, “circumvent[ed] constitutional limits”[19] on government power. Since permitting its execution would allow states to evade the spirit of the Due Process Clause by “manufactur[ing]”[20] consent, in her view the law “might as well”[21] have “overruled” constitutional text and therefore should be invalidated. Substance, not formality, was the stated concern of the dissenting Justices.
The Court’s Corporate Speech Precedents
When political figures discuss the free speech rights of corporations, they usually begin by either criticizing or praising the Supreme Court’s decision in Citizens United v. FEC, which invalidated portions of a federal campaign finance law. But Citizens United was simply an application of older precedents. While important, it is not the fulcrum of corporate speech rights any more than June Medical Services v. Russo[22] outranked Roe v. Wade[23] in the field of abortion law.
Rather, the Supreme Court’s decision in First Nat’l Bank of Boston v. Bellotti,[24] is the foundational case regarding corporations’ First Amendment rights. Bellotti dealt with a Massachusetts law that prohibited corporations from donating to ballot initiatives unless the company’s own business interests were directly affected. In a 5-4 decision delivered by Justice Powell, the Court held that speech cannot be prohibited on the basis of the speaker’s identity,[25] rendering the statute unconstitutional. In practice, this case established that corporations have the same free speech rights as individual citizens, and cannot be limited to addressing only those issues which the state views as pertinent to the company’s mission.
The expansive view of corporate free speech rights articulated in Bellotti has received both criticism and support from originalist scholars. In his dissent, Justice Rehnquist urged the Court to be cautious before making such sweeping claims given that the Founding generation thought free speech rights were limited to “natural persons,” not necessarily legally constructed entities like corporations. This argument has been echoed by more recent thinkers including Ryan Newman[26] and John Paul Stevens.[27] On the other hand, Justice Scalia, one of the intellectual founders of originalism, asserted that corporations possessed full free speech rights because they were composed of rights-bearing individuals.[28]
Tying these strands of law together
On March 3, 2024, the Eleventh Circuit struck down a Florida law which forbade companies from mandating employee training sessions that advocated for racial discrimination. Since the law directly penalized corporations for the content of their speech, Judge Grant reasoned in her opinion, it violated the First Amendment. But consider an alternative scenario. What if Florida, instead of unilaterally imposing this requirement on private companies, made consenting to it a precondition for corporations to register in Florida?
Suddenly, the calculus shifts.
In their inevitable challenge to such a requirement, corporations would likely make three points: first, that this law would render both the Eleventh Circuit’s opinion and the Supreme Court’s corporate speech decisions unenforceable; second, that due process and freedom of speech are in separate categories of rights that require distinct treatment; and third, that denying companies the legal status of registration substantially burdens their speech. I will take each of these objections in turn, Summa-style, examining their strengths and weaknesses.
While the first objection is undoubtedly strong, it also has serious flaws. Most importantly, Justice Barrett made precisely the same argument in Mallory, writing that consent-by-registration statutes enable states to effectively disregard constitutional rights. The majority rejected this concern. While it may seem odd that what looks like a technicality could potentially erode a substantive decision, it is not entirely without precedent. In Jackson v. Whole Woman’s Health, the Court allowed the enforcement of a pre-viability abortion ban prior to Dobbs because enjoining the law (which was enforced by private actors, not the state) would violate a higher constitutional principle. Moreover, on the substance of the claim itself, the state could make a plausible argument that such a law would not even evade the spirit of the Court’s decisions. Individuals can voluntarily barter away their constitutional rights in other cases to obtain a benefit, as when parents agree to limit their childrens’ free speech rights so that they may attend private school.
The second point has merit, as the Mallory majority constantly emphasized the importance of how consent fits into the unique “due process” framework. However, the freedom of speech is also a due process right,[29] and is a procedural protection.[30] It is hard to see why these two rights, both of which the Court has described as essential to justice and liberty, should have such different waiver requirements. Both flow from the exact same sentence in the Constitution, after all.[31] While it is true that the Court has often provided greater protection to social rights than economic rights,[32] it is unclear how this position can be reconciled with the plain text of the Due Process Clause, which makes no such distinction.
The final objection is formidable, and depending on the judicial philosophy of the assembled appellate panel, could result in the invalidation of any such law. In other contexts, such as the Free Exercise Clause, the denial of government benefits, including unemployment compensation, has been deemed sufficient to violate the Constitution as a “substantial burden” on religious liberty.[33] Denying a corporation access to a state’s markets would seem to go even further. The state would need to demonstrate why Mallory’s reasoning about the difference between coercion and the conditioning of special privileges would allow the imposition of speech requirements. One potential response could be to point to the Court’s precedents upholding the denial of certain government benefits out of concern for the messages those benefits will be used to support.[34]
Another way to alleviate the coercion concern would be to specify that the regulations only apply to corporations which obtain their registration after its enactment, rather than imposing new restrictions on companies that are already present.
How this legal question fits into contemporary politics
Since Citizens United was decided, there has been a major political realignment regarding the regulation of corporations. While conservatives once adhered to a rigid separation between market and state, they have recently become much more open to imposing legal requirements on large companies.[35] At a recent panel, Senator J.D. Vance of Ohio, one of the leaders of the Republican Party’s populist wing, made headlines when he remarked that “[t]here is no meaningful distinction between the public and the private sector in the United States of America.”[36] Even more traditional conservative thinkers, such as Senator Marco Rubio, have eschewed the free-market label in favor of “Common Good Capitalism.”[37]
Part of the reason for this shift is that large corporations, which were once seen by conservatives as citadels of traditional American values, have started to actively promote progressive social views in the past few decades.[38] Moreover, in using their economic clout to advocate for these positions, they have inevitably restricted opposing conservative views, especially on social media.[39] Many on the Right now believe that it is time to “limit”[40] the power of corporations to “upend” what they see as “the foundational moral and political norms of the American nation…”[41]
This transformation in theory has led to changes in policy. On this issue, Florida has taken the lead among conservative states, enacting numerous laws in the past three years designed to “counter the [political] influence of corporations,”[42] including statutes requiring viewpoint neutrality in social media platforms’ content moderation policies,[43] limiting what companies can say in mandatory employee training sessions (discussed at supra page 7),[44] and taking legal privileges away from corporations seen as having too much power in state politics.[45]
Unfortunately for Florida, these laws have not fared well in federal court.[46] Their provisions targeting social media platforms and employee training sessions have both been struck down by fairly conservative panels on the Eleventh Circuit, and while the dissolution of Disney’s Reedy Creek Improvement District has survived a trial court decision, that preliminary ruling will be appealed.
Although the Sunshine State might ultimately prevail on these issues before the Supreme Court, the odds are not in its favor. Under the Bellotti regime, corporations possess a broad right to influence public affairs even if they do not impact their business interests, and any legal constraints upon that right are disfavored. Thus, conservative states have a strong incentive to research the Court’s precedents regarding consent-by-registration statutes, and evaluate whether or not they represent a plausible way of limiting corporate power over social change without using coercion.
It is possible that progressives may also choose to pursue such policies for independent reasons. To begin with, the Left has never made its peace with Citizens United, and as its attempts to reverse it by constitutional amendment have repeatedly failed, it might seek to undermine the ruling’s effects at the state level through attaching limitations on campaign contributions to business registration. Moreover, social liberals have been very concerned by the Court’s holding in 303 Creative v. Elenis[47] that private business owners can decline to create curated items for same-sex weddings if doing so would express a message they disagree with. It is possible that progressive states will seek to find a way around this ruling by conditioning business registration on universal adherence to the state’s public accommodations laws.
Conclusion
When the Supreme Court took up Mallory v. Norfolk Southern Railway, its decision was not covered by front-page headlines or breaking news reports. The case’s following was probably limited to law professors and their reluctant students. But as with Chevron U.S.A., Inc. v. Natural Resources Defense Council, Inc.,[48] sometimes it is the decisions which are ignored by the public that will have the greatest impact on their daily lives. To be clear, I take no position on whether the kind of law described in this paper would actually be constitutional. But as the Mallory majority left this question open, it deserves serious investigation by legal scholars from across the ideological spectrum.
Works Cited
[1] 600 U.S. 122 (2023).[2] Mallory, Slip Opinion at 23, n. 11 (“Norfolk Southern consented to suit in Pennsylvania.”).
[3] See, e.g., Citizens United v. Federal Election Commission, 558 U.S. 310 (2010).
[4] See Josh Hawley, Hawley Introduces Bill to Keep Corporate America’s Dollars out of U.S. Politics, Hawley.Senate.Gov, October 31, 2023, https://www.hawley.senate.gov/hawley-introduces-bill-keep-corporate-americas-dollars-out-us-politics, accessed March 24, 2024; also Lauren Sforza, Democrats introduce constitutional amendment to reverse Citizens United campaign finance ruling, The Hill, January 19, 2023, https://thehill.com/homenews/house/3819814-democrats-introduce-constitutional-amendment-to-reverse-citizens-united-campaign-finance-ruling/, accessed March 24, 2024.
[5] See Palko v. Connecticut, 302 U.S. 319, 325 (1937).
[6] See Stephen Sachs, Pennoyer Was Right, 95 Tex. L. Rev. 1249, 1298 (2017) (“[The Fourteenth Amendment]…requires jurisdiction, full stop. Jurisdiction is what makes the process lawful, what gives the court legal power to take away property or liberty. A judgment without jurisdiction is void, a piece of ‘waste paper.’ And taking away someone’s property or liberty based on a piece of waste paper is, if anything is, a deprivation without due process of law.”).
[7] Id. at 1256.
[8] Id. at 1288.
[9] 95 U.S. 714 (1878).
[10] 326 U.S. 310 (1945).
[11] See generally Jack Fitzhenry, A Potential Rebirth of the Primary Role of Territorial Limitations on State Court Jurisdiction: Mallory v. Norfolk Southern Railway, 37 Notre Dame J.L. Ethics & Pub. Pol’y Blog 702 (2023).
[12] See Arizona v. United States, 567 U.S. 387, 417 (2012), Scalia, J., dissenting.
[13] Brief Amicus Curiae of Virginia, et al. in Mallory v. Norfolk Southern Railway, 600 U.S. 122 (2023), p. 4 (“Despite this dispute’s strong connection with Virginia, and lack of any connection to Pennsylvania, Mallory filed suit in the Philadelphia Court of Common Pleas, presumably because of that court’s reputation as a plaintiff-friendly forum.”).
[14] Mallory, Slip Opinion at 21.
[15] Id. at 23.
[16] Mallory, Jackson, J., concurring, Slip Opinion at 1.
[17] Id. at 3.
[18] Id.
[19] Mallory, Barrett, J., dissenting, Slip Opinion at 1.
[20] Id.
[21] Id.
[22] 591 U.S. _ (2020).
[23] 410 U.S. 113 (1973).
[24] 435 U.S. 765 (1978).
[25] Bellotti at 777 (the “inherent worth of…speech in terms of its capacity for informing the public does not depend upon the identity of its source, whether corporation, association, union, or individual.”).
[26] See Ryan Newman, Corporate Captains of the Woke Revolution, 27 Tex. Rev. L. & Pol. 663 (2023). Newman has taken a more centrist approach than Stevens did, agreeing that corporations have First Amendment rights but arguing that those rights are limited to the stated purposes in their articles of incorporation, as their freedom of speech derives solely from the rights of their shareholders.
[27] See Citizens United, Stevens, J., concurring in part and dissenting in part, at 394 (“In the context of election to public office, the distinction between corporate and human speakers is significant. Although they make enormous contributions to our society, corporations are not actually members of it.”).
[28] See Citizens United, Scalia, J., concurring, at 392 (“[T]he individual person’s right to speak includes the right to speak in association with other individual persons….The association of individuals in a business corporation is no different…”).
[29] See Gitlow v. New York, 268 U.S. 652 (1925) (holding that the freedom of speech is protected from infringement by the states under the Due Process Clause).
[30] See Counterman v. Colorado, 600 U.S. 66 (2023) (holding that the First Amendment requires a heightened burden of proof in true threat prosecutions).
[31] See Const. Amend. XIV (“[N]or shall any state deprive any person of life, liberty, or property, without due process of law.”).
[32] Compare Kelo v. City of New London, 545 U.S. 469 (2005), with Obergefell v. Hodges, 576 U.S. 644 (2015).
[33] See Sherbert v. Verner, 374 U.S. 398 (1963).
[34] See generally National Endowment for the Arts v. Finley, 524 U.S. 569 (1998), Scalia, J., concurring in the judgment.
[35] See Adrian Vermuele, Common Good Constitutionalism (2022) (a work by a leading conservative legal scholar advocating for state intervention in the economy).
[36] See Matthew Schmitz, J.D. Vance Is Right About Our Regime, Compact Magazine, May 18, 2023, https://www.compactmag.com/article/j-d-vance-is-right-about-our-regime/#:~:text=Speaking%20at%20the%20Catholic%20University%20of%20America%20this,States%20of%20America.%E2%80%9D%20His%20remark%20drew%20outraged%20responses, accessed March 25, 2024.
[37] See Marco Rubio, Common Good Capitalism and the Dignity of Work, Public Discourse, November 5, 2019, https://www.thepublicdiscourse.com/2019/11/58194/, accessed March 25, 2024.
[38] Newman at 673-681.
[39] See, e.g., Missouri v. Biden, No. 23-30445 (5th Cir. 2023) (finding that social media platforms engaged in “very real censorship” of conservative posts related to the COVID-19 pandemic).
[40] Newman at 681.
[41] Id. at 668.
[42] Id. at 697.
[43] See Staff of the Florida Governor, Governor Ron DeSantis Signs Bill to Stop the Censorship of Floridians by Big Tech, flgov.com, May 24, 2021, https://www.flgov.com/2021/05/24/governor-ron-desantis-signs-bill-to-stop-the-censorship-of-floridians-by-big-tech/, accessed March 25, 2024.
[44] See Staff of the Florida Governor, Governor Ron DeSantis Signs Legislation to Protect Floridians from Discrimination and Woke Indoctrination, flgov.com, April 22, 2022, https://www.flgov.com/2022/04/22/governor-ron-desantis-signs-legislation-to-protect-floridians-from-discrimination-and-woke-indoctrination/, accessed March 25, 2024.
[45] See Staff of the Florida Governor, Governor Ron DeSantis Signs Legislation Ending the Corporate Kingdom of Walt Disney World, flgov.com, February 27, 2023, https://www.flgov.com/2023/02/27/governor-ron-desantis-signs-legislation-ending-the-corporate-kingdom-of-walt-disney-world/, accessed March 25, 2024.
[46] See Josh Blackman, A Numbers Game: Who Would The Judicial Conference’s New Policy Help And Who Would It Hurt?, The Volokh Conspiracy, March 16, 2024, https://reason.com/volokh/2024/03/16/a-numbers-game-who-would-the-judicial-conferences-new-policy-help-and-who-would-it-hurt/, accessed March 25, 2024 (satirically mentioning a federal district court that “issues an injunction every time [Governor] Ron DeSantis sneezes.”).
[47] 600 U.S. 570 (2023).
[48] 467 U.S. 837 (1984).