Tuesday, May 30, 2017

SCOTUS Decision on Personal Jurisdiction: BNSF Railway v. Tyrrell

Today the Supreme Court issued its decision in BNSF Railway Co. v. Tyrrell, which was argued just over a month ago (and covered earlier here and here). Justice Ginsburg writes the majority opinion, joined by Chief Justice Roberts and Justices Kennedy, Thomas, Breyer, Alito, Kagan and Gorsuch. (In fact, this is the first merits opinion in which Justice Gorsuch participated.) Justice Sotomayor concurs in part and dissents in part.

The Court addresses two issues: one statutory and one constitutional. The first is the effect of § 56 of the Federal Employers’ Liability Act (FELA), which provides:

“Under this chapter an action may be brought in a district court of the United States, in the district of the residence of the defendant, or in which the cause of action arose, or in which the defendant shall be doing business at the time of commencing such action. The jurisdiction of the courts of the United States under this chapter shall be concurrent with that of the courts of the several States.”

The Montana Supreme Court reasoned that these two sentences combined to authorize personal jurisdiction in any state where the defendant was “doing business.” The Supreme Court unanimously rejects this theory. Justice Ginsburg writes that § 56 “does not address personal jurisdiction.” The first sentence “is a venue prescription governing proper locations for FELA suits filed in federal court.” And the second sentence “simply clarifies that the federal courts do not have exclusive subject-matter jurisdiction over FELA suits; state courts can hear them, too.” As to this part of the majority opinion, Justice Sotomayor concurs.

Had this first issue come out the other way, the constitutional analysis might have been more friendly toward allowing personal jurisdiction—although there are some interesting wrinkles on that point that the Court, having rejected the plaintiff’s statutory argument, did not need to address. Without federal statutory authorization, the constitutionality of jurisdiction hinges on the more commonplace inquiry into whether jurisdiction over BNSF would comport with the Fourteenth Amendment’s Due Process Clause. And on this issue, the case follows in the line of the Court’s Goodyear (2011) and Daimler (2014) decisions (which Justice Ginsburg also authored), with a similar end result: due process forbids personal jurisdiction.

First, Justice Ginsburg makes clear that—like Goodyear and Daimler—this is a general jurisdiction case: “Because neither Nelson nor Tyrrell alleges any injury from work in or related to Montana, only the propriety of general jurisdiction is at issue here.” She writes:

Goodyear and Daimler clarified that “[a] court may assert general jurisdiction over foreign (sister-state or foreign-country) corporations to hear any and all claims against them when their affiliations with the State are so ‘continuous and systematic’ as to render them essentially at home in the forum State.” Daimler, 571 U. S., at ___ (slip op., at 8) (quoting Goodyear, 564 U. S., at 919). The “paradigm” forums in which a corporate defendant is “at home,” we explained, are the corporation’s place of incorporation and its principal place of business. Daimler, 571 U. S., at ___ (slip op., at 18–19); Goodyear, 564 U. S., at 924. The exercise of general jurisdiction is not limited to these forums; in an “exceptional case,” a corporate defendant’s operations in another forum “may be so substantial and of such a nature as to render the corporation at home in that State.”

The majority concludes that BNSF’s operations in Montana were not sufficient to justify general jurisdiction:

BNSF, we repeat, is not incorporated in Montana and does not maintain its principal place of business there. Nor is BNSF so heavily engaged in activity in Montana “as to render [it] essentially at home” in that State. See Daimler, 571 U. S., at ___ (slip op., at 8) (internal quotation marks omitted). As earlier noted, BNSF has over 2,000 miles of railroad track and more than 2,000 employees in Montana. But, as we observed in Daimler, “the general jurisdiction inquiry does not focus solely on the magnitude of the defendant’s in-state contacts.” Id., at ___, n. 20 (slip op., at 21, n. 20) (internal quotation marks and alterations omitted). Rather, the inquiry “calls for an appraisal of a corporation’s activities in their entirety”; “[a] corporation that operates in many places can scarcely be deemed at home in all of them.” Ibid. In short, the business BNSF does in Montana is sufficient to subject the railroad to specific personal jurisdiction in that State on claims related to the business it does in Montana. But in-state business, we clarified in Daimler and Goodyear, does not suffice to permit the assertion of general jurisdiction over claims like Nelson’s and Tyrrell’s that are unrelated to any activity occurring in Montana.

This is where Justice Sotomayor gets off the train (as she did in the Daimler case):

I continue to disagree with the path the Court struck in Daimler AG v. Bauman, 571 U. S. ___ (2014), which limits general jurisdiction over a corporate defendant only to those States where it is “‘essentially at home,’” id., at ___ (slip op., at 8). And even if the Court insists on adhering to that standard, I dissent from its decision to apply it here in the first instance rather than remanding to the Montana Supreme Court for it to conduct what should be a fact-intensive analysis under the proper legal framework.

Justice Sotomayor criticizes the “comparative contacts analysis invented in Daimler” as inconsistent with International Shoe, and as granting “a jurisdictional windfall to large multistate or multinational corporations that operate across many jurisdictions.”

 

 

 

http://lawprofessors.typepad.com/civpro/2017/05/scotus-decision-on-personal-jurisdiction-bnsf-railway-v-tyrrell.html

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