The decision is particularly notable because Norfolk Southern Railway’s contacts with Missouri were substantial. According to the court, Norfolk was registered in the state as a foreign corporation, owns or operates 400 miles of train track in Missouri, employs 590 people in the state, and generates $232 million in revenue in the state. In Norfolk’s favor, only about 2 percent of its business is conducted in Missouri. Notably, the court also expressly overturned prior precedent and held on a statutory basis that registration in Missouri as a foreign corporation does not create consent to general personal jurisdiction in the state.
Unfortunately, Missouri’s expansively interpreted venue and joinder rules were not addressed in Norfolk. Those venue and joinder rules are as much a part of the difficultly that defendants face in Missouri as the now-dead (or, more likely, dying) expansive interpretation of personal jurisdiction. Fortunately for defendants, the state legislature is currently working on revisions to the venue and joinder rules in the form of a trio of House bills (460, 461, and 462). On March 9, the Missouri House passed all three bills and referred them to the Senate. Both houses are expected to pass the bills this session, which is set to end May 30. Missouri Governor Eric Greitens specifically called for tort reform in his January 2017 State of the State address, and he is expected to sign the bills if they pass.
While Norfolk is a welcome and much needed decision, from a mass tort defense perspective, the goal of an out-of-state defendant sued in a multi-plaintiff case in Missouri state court probably does not change—yet. Norfolk is but one decision, and a large and wealthy industry of plaintiffs firms exists in Missouri. It will not be stripped of the legal underpinnings of its economic success without a significant battle.
For now, the strategy in multi-plaintiff cases remains remove the case, seek to dismiss or sever, remand those without diversity (if any exist after dismissal), and transfer the rest to multidistrict litigation (MDL). Details on this process, along with some thoughts on execution, are below.
The Filing Strategy
1. File a notice of removal arguing
- fraudulent misjoinder of the diversity-defeating plaintiffs;
- fraudulent joinder of the diversity-defeating plaintiffs; and
- mass action removal under the Class Action Fairness Act (CAFA), if you can make the record and the timing works.
2. Simultaneously file a motion to dismiss or sever arguing
- the out-of-state plaintiffs (including diversity-defeating plaintiffs) should be dismissed for lack of personal jurisdiction;
- in the alternative, the cases should be severed and each plaintiff should be dealt with individually for purposes of removal; and
- the court should address the motion to dismiss or sever before the notice of removal.
3. Consider simultaneously filing a motion to stay pending transfer to an MDL. The judges in the Eastern District of Missouri are split on how to handle the removal and motions outlined above. Your best bet may be with your MDL judge, who is likely to be much less accustomed to (and accommodating of) the types of multi-plaintiff cases filed in Missouri state court. A motion to stay helps get you there even after the inevitable opposition to transfer at the Judicial Panel on Multidistrict Litigation.
Some (hopefully) helpful tactics for implementing this strategy follow.
1. Stick with federal court (for now). Given the complexity of the motions above, the court’s discretion in determining which motion to decide first, and the uncertainties that come with random judicial selection in the Eastern District of Missouri, it may be tempting to go straight to a motion to dismiss in state court and remove once the diversity-defeating, out-of-state defendants have been dismissed. But this may not be the safest option. Such a move may end up tangled in appellate courts for more than the one-year time limit on removal. Indeed, Norfolk is likely only the first case to work its way through Missouri’s appellate courts on this issue. Some have predicted (tip ’o the hat to Jim Beck) that plaintiffs will attempt to argue pendent party jurisdiction in the state court cases, which may slow down the implementation of Norfolk.
2. Keep an eye on the legislature. Hopefully, over time, this article will be rendered largely irrelevant by passage of Missouri House Bills 460, 461, and 462, but the same guidance regarding sticking with federal courts, above, applies until the case law surrounding these changes is more developed.
3. Emphasize how easy it is to rule on personal jurisdiction. Your federal judge decides whether to rule on the plaintiff’s inevitable motion to remand first or your motion to dismiss or sever first. Which motion is ruled on first can determine the outcome of your removal. This is where Norfolk may be most helpful. Norfolk makes the personal jurisdiction decision easier for the court and more legally compelling. Make sure the judge knows that.
4. Build your CAFA case. Most plaintiffs’ counsel are well aware of the 100-plaintiff threshold in CAFA and will not file a case with more than 99 plaintiffs. They will, however, file many multi-plaintiff cases in one court. Consider using consolidation of those matters (and the hearings regarding state court consolidation) to build a record that more than one multi-plaintiff action should be considered in determining whether the 100-plaintiff threshold has been met under CAFA. Alternatively, consider using Missouri Rule of Civil Procedure 66.01(d) to force loss-of-consortium plaintiffs into the case.
5. Consider pre-removal discovery. Given Norfolk, it is possible that plaintiffs’ counsel will attempt to obfuscate the facts necessary to determine the specific jurisdiction for each plaintiff’s claim. Consider early, targeted discovery regarding facts relevant to specific jurisdiction. The need for such discovery may actually be helpful. It may give you the time you need to develop your CAFA case while you await the “other paper” that confirms your ability to file a diversity removal.
6. Remember the CAFA restrictions on mass action transfer to MDLs. While a mass action under CAFA will get you out of state court, it will not get you to an MDL. 28 U.S.C. § 1332(d)(11)(C). For this reason, removal based on diversity is likely your first priority. You should consider structuring your briefing to lead the court in that direction. Note though, that the Judicial Panel on Multidistrict Litigation will transfer cases to an MDL with a motion to remand pending so long as removal is based on both diversity and CAFA. In re Darvocet, Darvon & Propoxyphene Prods. Liab. Litig., 939 F. Supp. 2d 1376, 1381 (J.P.M.L. 2013).
The end of multi-plaintiff mass tort cases in Missouri is likely still a few years away. However, Norfolk, and hopefully House Bills 460, 461, and 462, allow us to envision a day in the future where that is possible. The best way to keep multi-plaintiff cases out of Missouri is to keep winning removal battles, and, at a minimum, Norfolk is a step in the right direction.
Keywords: litigation, mass torts, Missouri, personal jurisdiction, venue, joinder, diversity, in multi-plaintiff case