Ever since the Supreme Court’s 2014 Daimler AG v. Bauman decision barred state courts from asserting “general” personal jurisdiction over nonresident corporations, plaintiffs’ lawyers have been searching for new jurisdictional theories that will permit them to continue to bring their tort suits before plaintiff-friendly courts. One theory—that a corporation consents to jurisdiction over any and all claims when it registers to do business in a State—has been accepted in only one State: Pennsylvania.

But now even Pennsylvania appears ready to reject consent jurisdiction. The Superior Court of Pennsylvania (the State’s intermediate appellate court) in December agreed to rehear the issue en banc after issuing several decisions in recent years that endorsed consent jurisdiction. And earlier this month, a federal district judge in Philadelphia broke ranks with his colleagues and held, in Sullivan v. A.W. Chesterton, Inc., that consent jurisdiction is inconsistent with the requirements of the Due Process Clause. While conceding that a 1991 U.S. Court of Appeals for the Third Circuit decision, Bane v. Netlink, Inc., endorsed consent jurisdiction over any nonresident business that registers to do business in Pennsylvania, Sullivan concluded that “Daimler effectively disassembled the legal scaffolding upon which Bane was based.”

Pennsylvania’s Registration Statute

Like many other States, Pennsylvania bars nonresident corporations from doing business in the State until they have registered with state officials. Registration includes selecting someone within the State authorized to accept service of process on behalf of the corporation in the event that the corporation is named as a party in a lawsuit. The statute imposes severe penalties on businesses that fail to register, including a prohibition against filing any lawsuits in the State.

The statute includes a provision not contained in many other States’ registration laws: it says explicitly that by registering, a nonresident corporation consents to the general jurisdiction of Pennsylvania courts over any and all claims filed against the corporation, even claims that bear no relation to Pennsylvania. 42 Pa.C.S. § 5301(a)(2)(i). That consent provision is in considerable tension with the Due Process Clause, which generally prohibits state courts from asserting personal jurisdiction over a nonresident unless the plaintiff’s claim “arises out of or relates to” the forum State.

What Does “Consent” Mean?

That due-process protection can be waived, however. A defendant can consent to the jurisdiction of a court even when it has a due-process right to resist being haled into court. And many courts hold that defendants consent to jurisdiction if they fail to object at the first available opportunity. The key question that arises in consent-jurisdiction cases is whether corporations truly “consent” to the general jurisdiction of a State’s courts when they register to do business there.

The Third Circuit (in Bane) and the many Pennsylvania courts that have adhered Bane answer that question, “Yes.” They reason that, by registering, nonresident corporations are granted the privilege of conducting a profitable business within Pennsylvania, and that they knowingly subject themselves to the general jurisdiction of Pennsylvania courts as the price of obtaining that privilege.

Sullivan: Consent Is Not Voluntary

Sullivan rejected that consensus and instead aligned itself with courts in other States that have ruled that consent jurisdiction is inconsistent with due process. The district court stated, “It is axiomatic … that consent is only valid if it is given both knowingly and voluntarily.” It concluded that the Pennsylvania registration statute “presents a foreign corporation with a Hobson’s choice”—i.e., no real choice at all. They are required to surrender a constitutional right in return for the privilege of conducting business in the State—something large companies must do to compete effectively and “a benefit generally available to others in the state.” Sullivan concluded that this requirement violates the Supreme Court’s “unconstitutional conditions” doctrine.

The court held, “Given the fundamental importance of the ability to engage in interstate commerce, this Court concludes that the mandatory nature of the statutory consent extracted by the Pa. Statutory Scheme is, in fact, functionally involuntary.” It explained that “the notion of consent implies that a party has alternatives—in particular the alternative not to consent” but that “the option of refraining from doing business in a state is not really a viable option for most corporations.”

Bane Is No Longer Good Law

Bane presented the biggest obstacle to the district court. Because it is located within the Third Circuit, the Sullivan court would normally be bound to follow Bane, even though that decision is out of step with decisions from other jurisdictions. But the court concluded that it need not adhere to Bane because that 1991 decision is inconsistent with the Supreme Court’s post-Daimler case law governing personal jurisdiction. It noted that Bane was premised on the now-discredited notion that general jurisdiction can be grounded on a nonresident defendant’s maintenance of “continuous and substantial business” within a State. It added that if Bane’s endorsement of consent jurisdiction were correct, then Daimler’s due-process restrictions on general jurisdiction would be largely nullified.

The next move is up to the Superior Court of Pennsylvania, which has agreed to re-hear the consent-jurisdiction issue en banc in Murray v. American LaFrance. If that court adheres to its previous decisions endorsing consent jurisdiction, the result will be a conflict between Pennsylvania state and federal courts on the amenability of nonresident corporations to suit in Pennsylvania. That would likely induce the U.S. Supreme Court to intercede to resolve the conflict.

Also published by Forbes.com on WLF’s contributor page.