U.S .Supreme Court Restricts Forum Shopping

U.S .Supreme Court Restricts Forum Shopping

June 12, 2017

 

Two lawsuits brought in Montana against BNSF Railway Company by former employees who didn’t live and were not injured there were barred by the U.S. Supreme Court in BNSF Railway Co. v Tyrrell, special administrator for the Estate of Tyrrell, deceased, et al, 581 U.S. __ (2017). According to the majority opinion written by Justice Ruth Bader Ginsburg, BNSF railroad can’t be sued in Montana for these alleged injuries.

Why were lawsuits brought in Montana where neither plaintiff had a connection to the state?

This is an example of forum shopping, an attempt by the plaintiffs to find a particular court or forum to try the case, where they believe the chances are greatest for a favorable decision. The tactic works assuming more than one court such as the states where the injuries occurred or the plaintiffs lived are available to try the case.

Facts: The plaintiffs in these cases are Robert Nelson of North Dakota and Kelli Tyrrell of South Dakota who brought their lawsuit under the Federal Employers’ Liability Act (FELA), 45 USC §51 in Montana state court. Nelson contends he injured his knee while working for the railroad in Washington State while Tyrrell claims her husband died of cancer he contracted from being exposed to chemicals while working for the railroad in South Dakota, Minnesota and Iowa. BNSF Railroad was not incorporated in Montana, maintained less than 5% of its work force and about 6% of its total track mileage in the state.

BNSF moved to dismiss both suits contending that it was not “at home” in Montana, as required for personal jurisdiction (the power that a court has over the parties) under a previous federal case (Daimler AG v Bauman, 571 U.S. __ (2014)). The Montana Supreme Court consolidated the two cases. It held that the Montana courts could exercise personal jurisdiction over BNSF because it did business in the state within the meaning of §56 of FELA. The U.S. Supreme Court disagreed.

Held:

First, §56 of FELA doesn’t refer to personal jurisdiction over railroads. FELA states that “an action may be brought in a district court of the United States,” in the district “in which the defendant shall be doing business at the time of commencing such action.” The Court sees that   sentence as governing venue (the geographic area of the court where a lawsuit can be filed), not personal jurisdiction. The statute also authorizes state courts to hear FELA lawsuits.

And, the court noted, FELA doesn’t create a special rule authorizing jurisdiction (the power of a court to decide a matter in controversy or the geographic area over which the court has authority) over railroads simply because they happen to do business in a state.

Second, the plaintiffs argued that a Montana rule that allowed its courts to decide cases involving “persons found” gave the court jurisdiction over BNSF. While BNSF admits it is “found” in Montana, exercising jurisdiction over it, said the Court, must be consistent with the U.S. Constitution’s due process clause, which it is not. The railroad can only be sued if it’s “at home” in Montana, which, according to earlier cases, means that:

  • The company is incorporated in Montana, or
  • Is headquartered there.

Neither of these criteria have been met nor does the railroad do so much business in the state to create an exception. So, while BNSF can be sued in Montana for claims related to its business in the state, it can’t be sued for claims totally unrelated to its activities within the state.

Justice Sonia Sotomayor filed an opinion concurring in part and dissenting in part with the opinion. She saw it as “a jurisdictional windfall to large multistate or multinational corporations that operate across many jurisdictions. Under its reasoning,” she wrote, “it is virtually inconceivable that such corporations will ever be subject to general jurisdiction in any location other than their principal places of business or of incorporation.”

While she may be proved right in her opinion at some point in the future, the broad support among Justices suggests that future may be a long time coming. A copy of the Court’s opinion in Tyrrell is available at the following link: https://www.supremecourt.gov/opinions/16pdf/16-405_4gdj.pdf

Do you have questions about a legal action or potential legal action? Please contact Miller Law partner Christopher Kaye at 248-841-2200.

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