With the United States Supreme Court hearing less than 100 cases every year, it is exceedingly rare for the Court to address a particular issue more than once. However, with state courts throughout the country failing to properly apply its 2014 decision in Daimler AG v. Bauman, 134 S.Ct. 746 (“Daimler”), the Supreme Court recently found it necessary to reaffirm that absent “exceptional” circumstances a foreign corporate defendant is subject to general personal jurisdiction only in its state of incorporation or principal place of business. Specifically, in BNSF Railway Co. v. Tyrrell, 581 U.S. __ (May 30, 2017) (“Tyrrell”), the Supreme Court held that Montana state courts could not exercise general personal jurisdiction over defendant BNSF, despite the fact that BNSF had fairly significant business ties to the state, because BNSF was neither incorporated in Montana nor had its principal place of business within the state. While Daimler and Tyrrell will not eliminate the practice of forum shopping by plaintiffs, they do place material limitations on a plaintiff’s ability to file litigation in any forum where the injury did not occur and plaintiff must therefore rely on general personal jurisdiction alone in establishing personal jurisdiction over a foreign corporate defendant.
Tyrrell involves two initially independent cases brought in Montana state courts by plaintiffs (Tyrrell and Nelson) under the Federal Employers’ Liability Act (“FELA”), 45 U.S.C. §51 et seq., which allows railroad employees to sue their employers for injuries sustained on the job. Both plaintiffs brought suit in Montana state courts, but neither case involved an injury that occurred in the state, and neither plaintiff resided in the state. While defendant BNSF is incorporated in Delaware with its headquarters in Texas, it does have significant business ties to Montana, where 5% of its work force is located and roughly 6% of its railroad track is contained. BNSF filed a motion to dismiss in each lawsuit, asserting that pursuant to Daimler it was not “at home” in Montana, and therefore not subject to general personal jurisdiction. Because the injuries giving rise to the causes of action did not occur in Montana, specific personal jurisdiction was not at issue. In Nelson’s case the motion was granted, but in Tyrrell’s case the motion was denied. The rulings were appealed, and on appeal the Montana Supreme Court consolidated the two matters.
The Montana Supreme Court found that the state courts had general personal jurisdiction over BNSF under FELA because BNSF was doing business in Montana at the time of the suit. In finding personal jurisdiction over BNSF, the Montana Supreme Court distinguished the Supreme Court’s holding in Daimler based on the application of FELA, concluding that because of the federal statute general personal jurisdiction could be conferred to the state courts even if the Daimler test was not satisfied. The Montana Supreme Court also found that Montana state law allows for the state courts to exercise personal jurisdiction over BNSF because BNSF conducts business in the state.
Continue Reading Supreme Court Reaffirms Limits on General Personal Jurisdiction For Foreign Corporate Defendants