August 2, 2017

General Personal Jurisdiction And Railroads; BNSF Ry. v. Tyrrell

Category: Indiana Law Review | Author: | Share:

The question of whether a state has personal jurisdiction over a corporation has been evolving recently. For example, in Daimler AG v. Bauman, 571 U.S. ___ (2014), the Supreme Court held that a state only had general jurisdiction over a corporate defendant if that corporation was “essentially at home” in that state. The plaintiffs in this case tried arguing that this did not apply to railroads, but they were proven wrong.

This case is actually two cases which had been consolidated in Montana state court. Nelson brought an action against BNSF (a railroad) for injuries he sustained as a fuel-truck driver. Tyrrell also sued BNSF for wrongful death, arguing that the decedent developed a fatal kidney cancer from his exposure to carcinogenic chemicals while working for BNSF. Each of these cases was filed in Montana state court under the Federal Employers’ Liability Act (FELA), which makes railroads liable in money damages to their employees for on-the-job injuries.

Neither plaintiff was a Montana resident or worked in Montana. And BNSF is incorporated in Delaware and is headquartered in Texas. So BNSF moved to dismiss both suits for a lack of personal jurisdiction. Its motion was granted in Nelson’s case and denied in Tyrrell’s.

The Montana Supreme Court consolidated the two cases and held that Montana courts could exercise general jurisdiction over BNSF for two reasons: (1) § 56 of FELA said so, and (2) due process allowed it. The Court granted certiorari.

The Court first addressed whether FELA authorized personal jurisdiction. §56 states, in relevant part

Under this chapter an action may be brought in a district court of the United States, in the district of the residence of the defendant, or in which the cause of action arose, or in which the defendant shall be doing business at the time of commencing such action. The jurisdiction of the courts of the United States under this chapter shall be concurrent with that of the courts of the several States.

The Court called the first sentence the venue sentence, as it had previously found that this sentence described the proper venue for a FELA action.

Congress generally uses the expression, where suit “may be brought,” to indicate the federal districts in which venue is proper. In contrast, Congress’ typical mode of providing for the exercise of personal jurisdiction has been to authorize service of process. Congress uses this terminology because, absent consent, a basis for service of a summons on the defendant is prerequisite to the exercise of personal jurisdiction.

As the language in this section did not authorize service of process, the Court refused to interpret it to describe personal jurisdiction.

The Court then described the second sentence as dealing with subject-matter, not personal, jurisdiction.

We have understood §56’s second sentence to provide for the concurrent subject-matter jurisdiction of state and federal courts over actions under FELA. … As Justice McKinnon recognized in her dissent from the Montana Supreme Court’s decision in Nelson’s and Tyrrell’s cases, “[t]he phrase ‘concurrent jurisdiction’ is a well-known term of art long employed by Congress and courts to refer to subject-matter jurisdiction, not personal jurisdiction.”

Thus, the only question left was whether Montana’s exercise of general personal jurisdiction violated due process. The plaintiffs’ primary argument was that the Court’s recent jurisprudence on this issue should not apply to railroads. But the Court rejected this entirely.

The Fourteenth Amendment due process constraint described in Daimler, however, applies to all state-court assertions of general jurisdiction over nonresident defendants; the constraint does not vary with the type of claim asserted or business enterprise sued.

BNSF, we repeat, is not incorporated in Montana and does not maintain its principal place of business there. Nor is BNSF so heavily engaged in activity in Montana “as to render [it] essentially at home” in that State. In short, the business BNSF does in Montana is sufficient to subject the railroad to specific personal jurisdiction in that State on claims related to the business it does in Montana.

The Montana Supreme Court’s decision was reversed, and both claims against BNSF were to be dismissed.

Lessons:

  1. FELA does not contain a section dealing with general personal jurisdiction for corporations covered by the Act.
  2. The Court’s general personal jurisdiction framework described in Daimler applies regardless of the type of claim asserted or business enterprise sued.