June 08, 2017 Practice Points

SCOTUS Reigns in States’ Exercise of General Personal Jurisdiction

<i>BNSF Railway Co. v. Tyrrell</i> was related to a FELA case for injuries from on-the-job exposure to carcinogenic chemicals while employed by BNSF.

By Karen Aldridge Crawford – June 8, 2017

The U.S. Supreme Court decided BNSF Railway Co. v. Tyrrell, No. 16-405, on May 30, 2017. This case was appealed from a decision of the Supreme Court of Montana and related to a Federal Employers Liability Act (FELA) case for injuries from on-the-job exposure to carcinogenic chemicals while employed by BNSF. The alleged injuries did not occur in Montana. BNSF was not headquartered or incorporated in Montana and claimed only five percent of its work force and about six percent of its total track mileage was in Montana, resulting in less than ten percent of its revenues. BNSF moved to dismiss both suits based on lack of general personal jurisdiction.

The question before the Supreme Court was whether Montana state courts could exercise general personal jurisdiction over BNSF based on the facts that the company simply “did business” in the state and whether BNSF was “found within” the state under the corresponding state rules of civil procedure. Daimler AG v. Bauman, 571 U.S. __ (2014). After a complicated discussion of the differences between personal and general personal jurisdiction, made more complicated by the interpretation of the FELA statute, which has been held to express Congress’s intent to confine FELA litigation to federal courts, the Supreme held that, because neither injury occurred in Montana, Montana courts’ exercise of personal jurisdiction did not comport with the Fourteenth Amendment’s Due Process Clause. It then distinguished the cases relied on by the Montana Supreme Court related to general personal jurisdiction, holding that BNSF’s activity in Montana was not “so substantial and of such a nature as to render the corporation ‘at home’ in that state,” and reversed and remanded the case, relying on the decision in International Shoe Co. v. Washington, 326 U. S. 310 (1945), holding “certain minimum contacts with [the State] such that the maintenance of the suit does not offend ‘traditional notions of fair play and substantial justice.’”

All the justices joined in this opinion except Justice Sotomayor, who concurred in part and dissented in part, stating that while International Shoe controlled the case, the court’s language that “continuous corporate operations within a state [are] so substantial and of such a nature as to justify suit against it on causes of action arising from dealings entirely distinct from those activities” should be interpreted differently. Justice Sotomayor believed the language meant that the courts are supposed to ask whether the benefits that a defendant attained in the forum state warranted the burdens associated with general personal jurisdiction, claiming that the comparative analysis in Daimler was invented and that International Shoe requires only the analysis of the contacts within the state in question based on the quality and quantity of those contacts.

Karen Aldridge Crawford is a partner with Nelson Mullins Riley & Scarborough in Columbia, South Carolina, and Washington, D.C.

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