Trial Magazine

At the end of last Term, the U.S. Supreme Court handed down a decision regarding personal jurisdiction that will impact trial lawyers representing injured railroad workers and their families. In BNSF Railway Co. v. Tyrrell, the Court resolved two consolidated cases involving claims under the Federal Employers’ Liability Act (FELA). The Court held that a FELA plaintiff must file suit in the state where he or she was injured, in the state where the railroad is incorporated, or in the state of the railroad’s principal place of business.¹

FELA affords railroad workers a negligence cause of action when they are injured on the job and states that suit may be brought in the district “in which the defendant shall be doing business.”² Brent Tyrrell died of kidney cancer due to exposure to toxic chemicals while employed by BNSF, and Robert Nelson sued to recover for knee injuries he sustained as a BNSF fuel truck driver. They both filed suit in Montana.

On appeal, the Montana Supreme Court determined that FELA conferred jurisdiction on the courts of any state where the railroad is doing business, relying not only on the statute’s legis­lative history but also on a line of U.S. Supreme Court decisions supporting that interpretation.³ It also noted that the U.S. Supreme Court’s precedents have liberally construed FELA in favor of injured ­railroad employees.⁴ The court rejected BNSF’s assertion that the exercise of jurisdiction by Montana courts would violate the railroad’s due process rights.⁵

The U.S. Supreme Court reversed, holding that FELA addresses venue in federal district courts. Justice Ruth Bader Ginsburg, writing for the majority, stated that the legislative history and the Court’s earlier decisions did not speak to personal jurisdiction.⁶ Instead, the Court looked to its 2014 decision in Daimler AG v. Bauman.⁷

The Court's decision in Tyrrell clearly will make representation of injured railroad workers more difficult.

In that opinion, the Court took a restrictive view of general jurisdiction, holding that the Fourteenth Amendment’s due process clause “does not permit a State to hale an out-of-state corporation before its courts when the corporation is not ‘at home’ in the State and the episode-in-suit occurred ­elsewhere.”⁸ The Court’s decision in Tyrrell clearly will make representation of injured railroad workers more difficult. Moreover, the Court’s clarification of several questions remaining after Daimler promises to make it generally more difficult to sue corporations in state courts for out-of-state injuries.

Questions Answered

First, Justice Ginsburg in Daimler suggested that the Court’s narrow view of general personal jurisdiction was driven by a reluctance to open state courts to disputes that belong in other countries.⁹ Tyrrell, however, applied Daimler’s “at-home” standard to a purely U.S. case, which is significant because defendants have been trying to use Daimler to limit jurisdiction over U.S. defendants.

Second, the Court cast aside the view expressed by the Montana Supreme Court that broader general jurisdiction was warranted here because of the ­longstanding principle that courts give FELA a “liberal construction” to accomplish its “humanitarian and remedial purposes.”¹⁰ The Court made clear that this principle does not supersede the due process issues raised in Daimler and that the Court’s restrictive view of general jurisdiction applies to all claims.¹¹

Finally, although the Court remarked that in an “exceptional case” a corporate defendant’s operations in a state “‘may be so substantial and of such a nature as to render the corporation at home in that State’” in addition to its principal place of business, the facts in Tyrrell indicate that such a case must be exceedingly rare.¹² BNSF owns more than 2,061 miles of track in Montana—only slightly less than the 2,586 miles of BNSF track in Texas, its principal place of business.¹³

The Court appears to suggest that there can be only one state in which substantial activity renders a corporation “at home.” The Court then ­underscored this point three weeks later in Bristol-Myers Squibb Co. v. Superior Court of California.¹⁴ As a practical matter, plaintiffs can only safely assert general jurisdiction in a state where the defendant not only engages in substantial activity but also, as in Tyrrell, locates its headquarters.

A Question Remains

Tyrrell sidestepped one issue raised by plaintiffs: Could Montana courts properly assert general jurisdiction based on BNSF’s registration to do business there and appointment of a resident agent for service of process?

Under Montana’s registration statute, BNSF was “subject to the same duties, restrictions, penalties, and liabilities” as a domestic corporation, including the ability “to sue and be sued” in Montana courts.¹⁵ Because the Montana Supreme Court did not address this argument, the U.S. Supreme Court did not reach it either.¹⁶

All states have registration laws, enacted specifically to allow suit against foreign corporations.¹⁷ The majority view is that state courts may assert general jurisdiction over foreign corporations based on such statutes because the corporations have consented.¹⁸ The Fifth Circuit, however, has held that general jurisdiction based solely on registration is unconstitutional.¹⁹

It is well-settled that lack of personal jurisdiction may be waived. If states may rely on registration and consent statutes as a basis for general jurisdiction, the Court’s recent restrictions on personal jurisdiction may be largely undone. However, resolution of that conflict must wait for another day.

Jeffrey White is AAJ's associate general counsel. He can be reached at jeffrey.white@justice.org.

Notes

1. 137 S. Ct. 1549 (2017).

2. 45 U.S.C. §§51, 56 (2017).

3. Tyrrell v. BNSF Ry. Co., 373 P.3d 1, 4–7 (Mont. 2016).

4. Id. at 4.

5. Id. at 8–9.

6. Tyrrell, 137 S. Ct. at 1555–57.

7. 134 S. Ct. 746 (2014).

8. Id. at 1554.

9. Daimler, 134 S. Ct. at 763.

10. 373 P.3d at 4.

11. Tyrrell, 137 S. Ct. at 1558–59.

12. Id. at 1558 (quoting Daimler, 134 S. Ct. at 761, n.19).

13. BNSF Railway Co., Class 1 Railroad Annual Report to the Surface Transportation Board for the Year Ending December 31, 2013, at 74.

14. 137 S. Ct. 1773 (2017). For more on Bristol-Myers, see Robert S. Peck, Constricting Personal Jurisdiction, Trial 26 (Nov. 2017); Erwin Chemerinsky, An Uphill Battle Over Jurisdiction, Trial 58 (Sept. 2017).

15. Mont. Code Ann. §§35-1-1030 (2), 35-1-115 (2017).

16. Tyrrell, 137 S. Ct. at 1559.

17. See Matthew Kipp, Inferring Express Consent: The Paradox of Permitting Registration Statutes to Confer General Jurisdiction, 9 Rev. Litig. 1, n.1, 9–10 (1990) (listing state statutes). 

18. Annot., Service of Process Upon Actual Agent of Foreign Corporation in Action Based on Transactions Out of State, 96 A.L.R. 366; see, e.g., Knowlton v. Allied Van Lines, Inc., 900 F.2d 1196, 1200 (8th Cir. 1990).

19. Wenche Siemer v. Learjet Acquisition Corp., 966 F.2d 179, 183–84 (5th Cir. 1992).