Justices Tighten Rules on Where Companies Can Be Sued

(CN) – The Supreme Court on Tuesday tightened rules on where corporations can be sued, in the process, ending lawsuits by plaintiffs who filed injury claims against a Texas-based railroad in the friendlier courts of Montana.

As recounted in the 8-1 ruling, Robert Nelson, a North Dakota resident, sued the BNSF Railway Company in Montana state court in 2011, alleging he was injured while working for the railroad. The former BNSF fuel truck driver claimed he injured his knee in a slip-and-fall accident.

In a separate lawsuit filed in Montana state court in 2014, Kelli Tyrrel, of South Dakota, sued the railway alleging her late husband Brent developed a fatal kidney cancer due to his exposure to carcinogenic chemicals while working for BNSF.

But neither worker was injured in Montana. Yet the Montana Supreme Court ruled in May 2016 that since BNSF conducts business in Montana – it operates trains on more than 2,000 miles of railroad track, employs 2,000 Montanans and invested $470 million in Montana in the past four years – state courts have general jurisdiction.

BNSF argues in court documents, however, that U.S. Supreme Court rulings in 2011 and 2014 placed a firm constitutional check on where businesses can be subject to liability when their products or operations wrongfully cause injury. BNSF currently has 33 lawsuits pending in Montana.

“The court concluded that, as a matter of due process, a state can exercise general personal jurisdiction over a business only where it is ‘at home,’ largely its place of incorporation or principal place of business,” attorney Phil Goldberg wrote in an amicus brief on behalf of the National Association of Manufacturers.

“The Supreme Court has held that this practice of forum shopping is not constitutional,” Goldberg added in an email to Courthouse News in January. “Montana taxpayers should not have to have their judicial resources or their own jury time spent on cases having nothing to do with Montana.”

On Tuesday, the U.S. Supreme Court said state courts cannot hear claims against companies when they are not based in the state or the alleged injuries did not occur there.

Writing for the majority, Justice Ruth Bader Ginsburg said that despite BNSF having more than 2,000 miles of track in Montana and 2,000 employees working in the state, it can’t be held liable for claims, like those of the plaintiffs in the subject cases, whose injuries “are unrelated to any activity occurring in Montana.”

But Justice Sonia Sotomayor, the lone dissenter, said the ruling by her colleagues is a “jurisdictional windfall” for large corporations.

“It is individual plaintiffs, harmed by the actions of a far-flung foreign corporation, who will bear the brunt of the majority’s approach and be forced to sue in distant jurisdictions with which they have no contacts or connection,” Sotomayor wrote.

Justice Neil Gorsuch joined the majority on Tuesday, making the ruling additionally noteworthy because it is the first he has participate in since joining the court in April.



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