Can a railroad corporation be sued under the Federal Employers’ Liability Act by an employee for compensation for injuries in a state that is neither the home state of the corporation nor where the injuries occurred?
Petitioner Kelli Tyrrell (“Tyrrell”) sued BNSF Railway Company (“BNSF”) in Montana state court, alleging violations of the Federal Employer’s Liability Act (“FELA”) for the injuries Brent Tyrrell sustained while working at BNSF. Robert Nelson also sued BNSF in Montana for FELA violations for the knee injuries he experienced while under BNSF’s employ. The Supreme Court consolidated Tyrrell’s and Nelson’s FELA claims. BNSF argues that Montana courts do not have personal jurisdiction over these claims because BNSF is not incorporated in Montana, Montana is not BNSF’s principal place of business, the petitioners are not Montana residents, and the claims did not arise in Montana. Tyrrell and Nelson counter that state courts have the authority to exercise personal jurisdiction over out-of-state corporations in federal claims, like FELA, when the state law permits such a claim. This case allows the Supreme Court to define the boundaries of state courts’ personal jurisdiction over out-of-state defendants in federal claims.
Questions as Framed for the Court by the Parties
Whether, notwithstanding this Court’s decision in Daimler AG v. Bauman, 134 S. Ct. 746 (2014), a state court can exercise personal jurisdiction over a defendant railroad that is not at home in the state, in a case that does not arise in the state, on the ground that the plaintiff pleads a cause of action under the Federal Employers’ Liability Act and the railroad is not incorporated overseas.
In May 2014, Kelli Tyrrell (“Tyrrell”), the special administrator for the estate of Brent Tyrrell (“Brent”), sued BNSF Railway Company alleging violations of the Federal Employer’s Liability Act (“FELA”) for injuries Brent experienced while working for BNSF that ultimately led to his death. See Tyrrell v. BNSF Ry. Co., DA 14-0825, 2016 MT 126. According to Tyrrell’s complaint, Brent was exposed to carcinogenic chemicals that caused the development of kidney cancer. See id. at 4. The Court consolidated Tyrrell’s case with that of Robert Nelson, a North Dakota resident who also sued BNSF to recover damages for injuries. See id. at 3. Nelson sued BNSF in March 2011 as a result of the knee injuries he experienced while working as a BNSF fuel truck driver. See id.
Both Tyrrell and Nelson brought their FELA claims against BNSF in Montana, though they experienced their injuries in other states. See id. Neither Tyrrell nor Nelson’s complaints allege that either BNSF employee ever worked in Montana or experienced their injuries in Montana. See id. at 4. Therefore, in response to their allegations, BNSF, which is incorporated in Delaware and primarily conducts business in Texas, filed a motion to dismiss for the court’s lack of personal jurisdiction. See id. at 3–4.
A judge of the District Court of the Thirteenth Judicial District granted BNSF’s motion in Nelson’s action against BNSF while another denied BNSF’s motion in Tyrrell’s action. See id. at 3. The court in Tyrrell’s case held that BNSF “does meet the criteria of being found within Montana and having substantial, continuous and systematic activities within Montana for general jurisdiction purposes.” See id. at 5. BNSF appealed. See id.
The Supreme Court of Montana affirmed the lower court’s decision finding that FELA and Montana law grant Montana courts general personal jurisdiction over BNSF. See Tyrrell at 18. In reaching its decision, the Supreme Court of Montana found that “[t]he U.S. Supreme Court consistently has interpreted 45 U.S.C. § 56 to allow state courts to hear cases brought under the FELA even where the only basis for jurisdiction is the railroad doing business in the forum state.” See id. at 8. The United States Supreme Court granted a writ of certiorari on January 13, 2017 in order to determine whether Montana courts have personal jurisdiction over BNSF under FELA and Montana Law.
CONSISTENCY WITH PERSONAL JURISDICTION PRECEDENT
BNSF argues that the Federal Employers’ Liability Act (“FELA”), 45 U.S.C. § 56, does not grant personal jurisdiction to state courts. See Brief for Petitioner, BNSF Railway Co. at 24, 27. BNSF explains that, under International Shoe Co. v. Washington, courts may exercise specific personal jurisdiction (where a state court has jurisdiction over a claim when the claim develops from the defendant’s “contacts with the forum”) or general personal jurisdiction (where a claim does not arise from the defendant’s contacts but the defendant has sufficient “continuous and systematic” contact with the forum state). See id. at 22–23. BNSF notes that a state court may exercise personal jurisdiction over a business only if the business’s state of incorporation and main location of business is in the court’s state, excluding exceptional circumstances. See id. BNSF argues that these principles protect consistency and certainty in jurisdictional cases. See id. In light of these principles, BNSF contends that Montana courts do not have personal jurisdiction over BNSF because the claims did not arise in Montana, the plaintiffs were not Montana residents, and BNSF is neither incorporated nor principally operates in Montana. See id. at 24. Therefore, BNSF claims that the suit against them should be dismissed because the court lacks jurisdiction over the litigation. See id.
BNSF also argues that Daimler AG v. Bauman should be applied to FELA claims involving out-of-state railroad defendants. See Brief for Petitioner at 24. BNSF explains that, under Daimler, the Fourteenth Amendment Due Process Clause bans state courts from exerting personal jurisdiction unless a defendant is sufficiently “at home” in the forum court’s state. See id. at 4. BNSF contends that it is not “at home” in Montana because it was incorporated in Delaware and, although it conducts business in 28 states, it primarily transacts business in Texas. See id. at 4, 9. BNSF asserts that the Montana court misinterpreted Daimler when it applied 45 U.S.C. § 56 by concluding that a corporation is subject to general personal jurisdiction when a corporation’s global activities subject it to the forum state’s jurisdiction. See id. at 23–24. Additionally, BNSF argues that the Montana court may not exercise personal jurisdiction over FELA claims on the basis that BNSF is a national railroad corporation with railways in Montana, particularly since the plaintiffs are non-Montana residents who were allegedly injured in states other than Montana while employed by BNSF. See id. at 13–14. BNSF also contends that Montana’s assertion of personal jurisdiction would violate Due Process because Daimler protects transnational corporations from the injustice of litigating cases far from their principal locations of operation. See id. at 26–27. Instead, BNSF maintains that state courts should focus on the corporation’s contacts with the forum state. See id. at 23–24.
Tyrrell claims that International Shoe sets the parameters a court must comply with when exercising personal jurisdiction. See Respondents’ Brief in Opposition, Kelli Tyrrell and Robert Nelson at 10. Tyrrell argues that, under International Shoe, a corporation “purposefully avails” itself to a forum state’s jurisdiction by doing business in the forum state; therefore, Tyrrell concludes that a forum state court may exercise jurisdiction over a corporation that does business in the state without violating the fairness principles under the Fourteenth Amendment’s Due Process Clause. See id. In light of the International Shoe standards, Tyrrell maintains that BNSF is “at home” in Montana given that it has established infrastructure necessary for its business, provides an agent for service of process, and is registered to conduct transactions in Montana. See Brief for Respondents, Kelli Tyrrell and Robert Nelson at 47.
Tyrrell also argues that the Montana court properly refrained from applying Daimler. See Respondents’ Brief in Opposition at 10. Tyrrell claims that there is ample precedent supporting a state court exercising personal jurisdiction over an out-of-state corporation defendant on an out-of-state claim, such as J. McIntyre Machinery, Ltd. v. Nicastro, World-Wide Volkswagen Corp. v. Woodson, and Burger King Corp. v. Rudzewicz. See id. at 10, 12. Additionally, Tyrrell argues that these cases support the conclusion that Congress may grant state courts the authority to exercise personal jurisdiction over a specific federal claim like FELA. See id. Tyrrell also notes that three state-court decisions support Montana’s use of discretion to exercise personal jurisdiction over the claim against BNSF. See Respondents' Brief in Opposition at 13. For example, Tyrrell asserts that Southern Pacific Transportation Co. v. Fox grants a state court the discretion to hear a federal claim if the state’s law permits this claim. See id. Tyrrell maintains that a state court does not have jurisdiction over a FELA claim only if the state’s law does not permit it. See id. at 14. Finally, Tyrrell stresses that a state court’s ability to exercise personal jurisdiction over a FELA claim is based on the state court’s discretion. See id.
45 U.S.C § 56: VENUE OR PERSONAL JURISDICTION?
BNSF claims that FELA Section 56 explicitly provides for a particular venue in federal court cases and affirms that state courts may have subject-matter jurisdiction over FELA claims. See Brief for Petitioner at 5, 19. BNSF argues that the FELA amendment extended a plaintiff’s venue choices by declaring that venue is proper in any federal court in a state in which a corporation conducts business. See id. at 8, 14. BNSF also maintains that FELA Section 56 applies only to venue selection in federal courts, not to determining personal jurisdiction in state courts. See id. at 19, 27. BNSF explains that personal jurisdiction is more concerned with the court’s authority over a litigation, whereas the choice of venue is more related to finding a “convenient forum.” See id. at 29. BNSF argues that venue is determined by a venue statute, whereas personal jurisdiction is determined by a defendant’s receptiveness to service of process. See id. at 30. BNSF argues that Congress could have conformed Section 56 into a personal jurisdiction statute by expanding the service of process options, but it consciously declined to do so. See id. at 33.
Tyrrell counters that venue and personal jurisdiction are not clearly distinct since FELA’s amendment. See Brief for Respondents at 18. Tyrrell claims that BNSF mistakenly argues that Section 11 of the 1798 Judiciary Act governs personal jurisdiction in federal courts and Section 1 of the 1888 Judiciary Act governs venue in federal courts. See id. at 19. Instead, Tyrrell argues that Sections 11 and 1 of the Judiciary Acts each control both personal jurisdiction and venue matters. See id. Additionally, Tyrrell contends that BNSF’s interpretation of Section 56 would not allow FELA claims in either state or federal courts. See Respondents’ Brief in Opposition at 18. Tyrrell claims that BNSF misreads Section 56 by concluding that it broadens venue options but not service of process options. See Brief for Respondents at 19. Tyrrell counters that Section 56 expands both venue and personal jurisdiction options. See id.
The Washington Legal Foundation (“WLF”) and Allied Educational Foundation (“AEF”), in support of BNSF, argue that authorizing a state court to exercise personal jurisdiction over all companies “doing business” in the state destroys the predictability that due-process limitations provide. See Brief of Amici Curiae Washington Legal Foundation and Allied Educational Foundation (“WLF and AEF”), in Support of Petitioner at 21. WLF and AEF argue that this predictability is necessary to ensure that companies will be subject to jurisdiction “at home” rather than forced to defend themselves in distant, unanticipated courts. See id. at 21. The Chamber of Commerce of the United States of America et al. (“U.S. Chamber”) contends that a corporation cannot be considered “at home” in every place it operates. See Brief of Amici Curiae Chamber of Commerce of the United States of America et al., in Support of Petitioner at 21. U.S. Chamber cites the Court in Daimler to argue that some predictability is important for a company’s business and investment decisions because it allows companies “to structure their primary conduct with some minimum assurance as to where that conduct will and will not render them liable to suit.” See id. at 20.
Tyrrell, on the other hand, argues that predictability is not at issue because a company that conducts activities within a state not only purposefully benefits from the protections of that state, but also knowingly subjects itself to jurisdiction in that state on the basis of a federal claim. See Brief for Respondents at 11. In other words, Tyrrell cites the Court in Denver & Rio Grande Western Railroad Co v. Terte to argue that a company that operates and does business within a state can properly be sued in that state. See id. at 16. Tyrrell also notes that Congress considered and dismissed the arguments regarding the lack of convenience and increased expense of defending in any place a company “does business” in federal claims like FELA. See id. Tyrrell argues that the laws guiding the courts’ exercise of jurisdiction do provide predictability because they allow state courts to hear FELA claims brought against any U.S. company doing business in that state at the time of the claim, “where local law permits” such claims. See id. at 12–13.
WLF and AEF argue that allowing a non-resident plaintiff to sue in a state that has no relation to the suit and requiring an out-of-state defendant to defend the suit there results in forum shopping. See Brief of WLF and AEF at 22. WLF and AEF claim forum shopping will continue to occur because nonresident plaintiffs with similar claims will also bring suits in states they consider strategically advantageous despite the fact that the states have no relation to the defendants’ acts or the plaintiffs’ injuries. See id. at 21, 23. WLF and AEF contend that forum shopping is unfair because the location in which the plaintiff brings the claim often changes the decision in the case, as some courts are considered more plaintiff-friendly. See id. at 24, 26.
Tyrrell, on the other hand, argues that not allowing an injured employee to sue in a court in a state where the defendant company conducts business activities would take away the employee’s right to sue a company for FELA claims anywhere that company is doing business. See Brief for Respondents at 19. Tyrrell claims that BNSF’s concerns that employees will sue in unpredictable and distant locations are unfounded. See id. at 21. Tyrrell argues that suing in a nearby state to where an injury occurred or a plaintiff resides, as in this case, does not constitute forum shopping but simply reflects the right Congress granted to plaintiffs to bring their claims wherever they choose. See id.