Limiting General Jurisdiction
June 15, 2017
By: Carson K. Glass
The Journal Record
Last month, the U.S. Supreme Court limited the scope of general jurisdiction, in a move seen by most as a limitation upon forum shopping. In BNSF Railway Co. v. Tyrrell, two injured railroad employees sued their employer in Montana state courts based on the Federal Employers’ Liability Act (FELA). Neither of the plaintiffs lived in Montana. The alleged injuries were sustained outside of Montana. BNSF was not based in Montana. To support personal jurisdiction over BNSF, the plaintiffs pointed to the existence of BNSF railroad tracks running through the state. The plaintiffs relied on the doctrine of general personal jurisdiction, which provides that a corporation is subject to personal jurisdiction if their “affiliations with the State are so continuous and systematic as to render them essentially at home in the forum State.”
The Montana Supreme Court concluded that the exercise of general personal jurisdiction over BNSF was proper, based in part on Section 56 of FELA, which provides that actions “may be brought in a district court of the United States, … in which the defendant shall be doing business at the time of commencing such action.” Additionally, Montana law permits the exercise of general jurisdiction over “all persons found within” the state. In the Montana court’s view, BNSF’s train tracks and employees within Montana satisfied these two laws.
On certiorari, the U.S. Supreme Court determined that Section 56 does not authorize state courts to exercise personal jurisdiction over railroads doing business in their states but not incorporated or headquartered there. Instead, the U.S. Supreme Court determined that Section 56 is a venue statute, identifying those forums where an action can be brought if personal jurisdiction is otherwise established.
The Supreme Court also determined that the Montana courts’ exercise of general personal jurisdiction “does not comport” with due process. To establish general jurisdiction over a corporation that is neither incorporated nor headquartered in a state, the corporation’s activities within the forum must be so substantial as to render the corporation at home in the forum. BNSF’s operations in Montana did not rise to this level.
The BNSF decision reiterates that threshold requirements of minimum contacts must be satisfied in order to sue a corporation in a state. Defendants can be expected to use BNSF in an effort to address forum shopping by plaintiffs. Plaintiffs will need to carefully examine the basis for assertions of personal jurisdiction over corporate defendants.