BNSF Railway Co. v. Tyrrell

Brief Fact Summary.

Two separate plaintiffs brought two separate lawsuits against Defendant under Federal Employers’ Liability Act (FELA) in Montana. Defendant moved to dismiss both suits, arguing that it was not “at home” in Montana as required for general jurisdiction under Daimler AG v. Bauman. Its motion was granted in one case and denied in the other. After consolidating the cases, the Montana Supreme Court held that Montana courts could exercise general jurisdiction over Defendant because the railroad both “did business” in the State within the meaning of 45 U.S.C. §56 and was “found within” the State within the compass of Mont. R. Civ. Proc. 4(b)(1). The Montana Supreme Court  also held that the due process limits articulated in Daimler did not control because Daimler did not involve a FELA claim or a railroad defendant. Defendant sought review.

Synopsis of Rule of Law.

A state court may not exercise general jurisdiction over a railroad based solely on the railroad’s track and employees in the forum, if the railroad’s in-state activities are not so continuous and systematic as to render it at home in the state.

Facts.

Plaintiff Nelson brought a Federal Employers’ Liability Act (FELA) suit against Defendant in a Montana state court, alleging that he had sustained injuries while working for Defendant. FELA made railroads liable in money damages to their employees for on-the-job injuries. Plaintiff Tyrrell also sued Defendant under FELA in a Montana state court, alleging that her deceased husband had developed a fatal cancer from his exposure to carcinogenic chemicals while working for Defendant. In both cases, the injury did not occur in Montana. Defendant neither incorporated nor headquartered there. Additionally, it only maintained less than five percent of its work force and about six percent of its total track mileage in the State. Defendant moved to dismiss both suits, arguing that it was not “at home” in Montana as required for general jurisdiction under Daimler AG v. Bauman. Its motion was granted in Nelson’s case and denied in Tyrell’s case. After consolidating the cases, the Montana Supreme Court held that Montana courts could exercise general jurisdiction over Defendant because the railroad both “did business” in the State within the meaning of 45 U.S.C. §56 and was “found within” the State within the compass of Mont. R. Civ. Proc. 4(b)(1). The Montana Supreme Court  also held that the due process limits articulated in Daimler did not control because Daimler did not involve a FELA claim or a railroad defendant. Defendant sought review.

Issue.

May a state court exercise general jurisdiction over a railroad based solely on the railroad’s track and employees in the forum, if the railroad’s in-state activities are not so continuous and systematic as to render it at home in the state?

Held.

No. The court reversed the Montana Supreme Court’s decision, holding that the relevant language in FELA only addressed venue and subject-matter jurisdiction, not personal jurisdiction.

Dissent.

Justice Sotomayor

The Justice concurred in part and dissented in part. Justice Sotomayor agreed with the majority that FELA did not address state courts’ personal jurisdiction over railroads. However, the majority’s reliance on the at-home standard for general jurisdiction makes it nearly impossible for a large multistate or multinational corporation to be subject to general jurisdiction anywhere other than its place of incorporation or principal place of business. This would harm plaintiffs and depart significantly from the jurisdictional analysis set forth in International Shoe Co. v. Washington, which required courts to determine whether the benefits a defendant received in the forum state justify the burden of subjecting the defendant to general jurisdiction. Furthermore, the majority inappropriately focused on the percentage of BNSF’s contacts in Montana as compared to other jurisdictions. The analysis should have focused on the type and amount of the defendant’s contacts in the forum jurisdiction.

Discussion.

A state court may not exercise general jurisdiction over a railroad based solely on the railroad’s track and employees in the forum, if the railroad’s in-state activities are not so continuous and systematic as to render it at home in the state. § 56 of FELA does not address personal jurisdiction over railroads. Although the first sentence of § 56 provides that a FELA action may be brought in federal district court in a district in which the railroad is “doing business,” this is a statement of proper venue and not of personal jurisdiction. Additionally, although the second sentence of § 56 provides that the federal courts’ jurisdiction is concurrent with state courts’ jurisdiction, this sentence concerns subject-matter jurisdiction and not personal jurisdiction. Because FELA does not address personal jurisdiction, the appropriate question is whether the state court’s exercise of general jurisdiction is consistent with the Due Process Clause of the Fourteenth Amendment. General jurisdiction may be exercised over a corporate defendant if the corporation’s connection to the state is so continuous and systematic that it renders the corporation essentially at home in the state. Jurisdiction is appropriate in the corporation’s place of incorporation and principal place of business, as well as, in exceptional circumstances, any other state in which the corporation engages in substantial activities of such a nature to consider the corporation at home. Here, Defendant was incorporated in Delaware and had its principal place of business in Texas. Although it maintained a small percentage of its nationwide track mileage and workforce in Montana, Defendant’s activities in the state were not substantial or significant enough to render Defendant at home there. Accordingly, Defendant was not subject to general jurisdiction in Montana. The judgment is reversed.