Close-up close-up shots of the tracks

By Michael J. O’Brien

In the recent case of BNSF Railway Co. v. Tyrrell, the U.S. Supreme Court rejected a blatant forum shopping attempt by two railway employees and limited future lawsuits against out-of-state railroads. In BNSF Railway Co., Robert Nelson of North Dakota and Kelli Tyrrell of South Dakota filed separate suits against BNSF Railroad in a Montana State Court pursuant to the Federal Employer’s Liability Act (“FELA”) 45 U.S.C. §51 et sec. which makes railroads liable for on-the-job injuries to their employees. Nelson allegedly injured his knee while working for BNSF in the State of Washington. Tyrrell claimed that her husband died of cancer he contracted after being exposed to chemicals while working for BNSF in South Dakota, Minnesota, and Iowa. Despite the fact that neither Plaintiff resided in Montana, nor sustained any injuries in Montana, they filed their lawsuit against BNSF in that state based upon BNSF’s alleged contacts in Montana.

BNSF was incorporated in Delaware and it maintained its principle place of business in Texas. It operates railroad lines in 28 states, however, it maintained less than 5% of its workforce and approximately 6% of its total track mileage in Montana. Nelson and Tyrell claimed that these contacts with Montana were sufficient for them to sue the railroad in Montana. BNSF disagreed.

After Tyrrell and Nelson filed suit, BNSF moved to dismiss both of their lawsuits for lack of personal jurisdiction. The Montana Supreme Court ultimately denied the motion allowed these cases to move forward holding that Montana Courts could exercise general personal jurisdiction over BNSF because §56 of FELA authorizes State Courts to exercise personal jurisdiction over railroads “doing business” in the state. The Montana Supreme Court further observed that Montana law provides for the exercise of general jurisdiction over “all persons found within the state.” Thus, because of BNSF’s many employees and miles of track in Montana, the Montana Supreme Court concluded that BNSF was both “doing business” and “found within” the state such that both FELA and Montana law authorized the exercise of personal jurisdiction.

The U.S. Supreme Court granted certiorari to resolve whether §56 of FELA authorizes State courts to exercise personal jurisdiction over railroads that do business in states but are neither incorporated, nor headquartered in that state. The Supreme Court also examined whether the Montana Court’s exercise of personal jurisdiction in these cases comported with constitutional due process.

A solid majority of the Court rejected the two theories upon which Nelson and Tyrrell had relied on to justify jurisdiction over BNSF in Montana. First, the Court held that FELA does not itself create a special rule authorizing jurisdiction over railroads simply because they happen to be doing business in a particular place. Next, the Court ordered that an exercise of jurisdiction over BNSF must still be consistent with due process. Thus, the Montana rule that allowed Courts in the state to exercise jurisdiction over “persons found” in Montana did not help the Plaintiffs as it violated due process.

The Supreme Court repeatedly mentioned that BNSF was not incorporated in Montana, and it did not maintain its principle place of business in that state. Further, BNSF was not so heavily engaged in activity in Montana “as to render it essentially at home” in that state. The Supreme Court noted that a corporation that operates in many places can “scarcely be deemed at home in all of them.” Thus, the business that BNSF did in Montana may be sufficient to subject the railroad to specific personal jurisdiction in maritime for claims related to the business activity in Montana. However, simply having in state business did not suffice to permit the assertion of general jurisdiction over claims like Nelson’s and Tyrrell’s that were completely unrelated to any activity occurring in Montana.

Last, it is important to note that this holding is also relevant in maritime cases. Indeed, since FELA case law is applicable to Jones Act cases, BNSF Railway Co.’s holding will, by extension, also limit forum shopping by Jones Act seaman under the same reasoning.