Opinion analysis: Court restricts lawsuits against out-of-state railroads

Three years ago, a unanimous Supreme Court threw out a lawsuit that sought to hold a German car company liable in California for the actions of its Argentinian subsidiary, which allegedly worked with security forces in Argentina during the country’s “Dirty War” to kidnap, torture and kill some of the subsidiary’s workers. Today the court, in an opinion by Justice Ruth Bader Ginsburg, made clear that its 2014 ruling applies fully to bar two lawsuits that were brought in Montana against BNSF Railway by former employees who did not live there and were not injured there.

The plaintiffs in today’s cases are Robert Nelson of North Dakota, who contends that he injured his knee while working for the railroad in Washington state, and Kelli Tyrrell of South Dakota, who claims that her husband died of cancer he contracted after being exposed to chemicals while working for BNSF in South Dakota, Minnesota and Iowa. But today’s ruling stops their lawsuits short, because BNSF cannot be sued in Montana for these alleged wrongs.

The court rejected both of the theories on which the plaintiffs had relied to justify jurisdiction over BNSF in Montana. First, it ruled that the Federal Employers’ Liability Act, a federal law that allows railroad workers to sue their employers for injuries that occur on the job, merely governs venue – that is, where a lawsuit may be filed – and then authorizes state courts to hear FELA lawsuits as well. FELA does not itself create a special rule authorizing jurisdiction over railroads just because they happen to do business in a particular place, the court emphasized.

Second, the court continued, a Montana rule that allows courts in the state to exercise jurisdiction over “persons found” in Montana also does not help the plaintiffs. Even if BNSF concedes that it is “found” in Montana, exercising jurisdiction over BNSF must still be consistent with the Constitution’s due process clause – which, the court concludes, it is not. Under its earlier cases, the court explained, BNSF can only be sued in Montana if it is “at home” there, which normally means that the company is either incorporated in the state or has its principal place of business there. But neither of those criteria is met, the court continued, nor is the railroad so “heavily engaged in activity” in Montana as to present the kind of “exceptional” case in which jurisdiction could exist even outside the company’s state of incorporation and principal place of business. So although BNSF could, the court acknowledged, be sued in Montana for claims that are related to its business in Montana, it can’t be sued there for claims that aren’t related to anything it did within the state.

Today’s decision was the first ruling on the merits in which Justice Neil Gorsuch, who joined Ginsburg’s opinion in full, participated. Justice Sonia Sotomayor filed an opinion concurring in part and dissenting in part from the decision. She stressed that she still disagreed with the court’s 2014 ruling on jurisdiction. But in any event, she added, the court should have sent the case back to the Montana Supreme Court so that it could determine on its own whether BNSF is “at home” in Montana. Moreover, she lamented, the decision gives “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.” Time will tell whether that is indeed is the result of today’s decision, but the broad consensus among the justices suggests that the rule is likely to remain in place for the foreseeable future.

Posted in: Analysis, Featured, Merits Cases

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