Argument preview: Jurisdiction, precedent and the Federal Employers’ Liability Act
on Apr 24, 2017 at 10:23 am
Three years ago, in Daimler AG v. Bauman, the Supreme Court ruled that the Constitution’s due process clause barred a lawsuit in California against the German car company 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. Tomorrow, the justices will hear oral argument on how broadly that 2014 ruling sweeps – and, in particular, whether it prohibits lawsuits by two U.S. railroad workers in Montana for injuries that happened in other states.
The plaintiffs in the two cases are Robert Nelson of North Dakota, who alleges that he suffered a serious knee injury while working for BNSF Railway Co. in Washington state as a fuel truck driver, and Kelli Tyrrell of South Dakota, who contends that her husband, Brent, contracted cancer and died as the result of his exposure to chemicals while working for BNSF in South Dakota, Minnesota and Iowa. Nelson and Tyrrell filed lawsuits in state court in Montana under the Federal Employers’ Liability Act, a federal law that allows railroad workers to sue their employers when they are injured. The Montana courts had jurisdiction over BNSF, they argued, because of the company’s extensive operations in the state: BNSF operates nearly 3,000 miles of railroad tracks and employs over 2,000 people there.
BNSF argued that both cases should be dismissed. One of the state courts agreed. It concluded that BNSF, which is incorporated in Delaware and has its principal place of business in Texas, was not – as the Supreme Court’s precedents require — “at home” in Montana. But the other court allowed the case to go forward, based on what it described as BNSF’s “substantial, continuous and systematic activities within Montana.” The Montana Supreme Court agreed with the latter court, explaining that Montana courts had jurisdiction over BNSF because FELA gives state courts jurisdiction over a defendant wherever the company does business – which, it ruled, BNSF does in Montana. In January of this year, the justices agreed to weigh in.
For BNSF, the Supreme Court’s decision in Daimler makes this case an easy one. In Daimler, it maintains, the court held that, when a plaintiff’s cause of action does not “arise” in the state where the lawsuit is filed, the 14th Amendment’s due process clause allows a state court to assert personal jurisdiction over the defendant only if the defendant is “at home” in that state. Here, BNSF emphasizes, Tyrrell’s and Nelson’s cases do not “arise” in Montana: The employees did not live in Montana, they “never worked a day in Montana, were not injured in Montana, and do not allege that BNSF was negligent in Montana.” Tyrrell and Nelson cannot meet the second part of the Daimler test either, the company stresses, because – as a Delaware corporation with its principal place of business in Texas – BNSF is not “at home” in Montana. BNSF suggests that the only reason why Nelson and Tyrrell are suing BNSF in Montana is because they believe it will be a friendlier forum.
Tyrrell and Nelson respond that, under the court’s ruling in Daimler, the states where a corporation is incorporated and has its principal place of business are not necessarily the only places where a corporation can be “at home.” Instead, they contend, a corporation can also be “at home” where its operations are “so substantial and of such a nature as to render the corporation at home” there as well. BNSF has precisely those kinds of connections to Montana, they reason, because the company “has earned more than $1.7 billion in a single year from its ability to do business in Montana.” Given the scope of BNSF’s operations in Montana, they conclude, it would not violate “traditional notions of substantial justice and fair play to expect BNSF to answer to claims there.” Whatever Daimler may say about a state court’s jurisdiction generally, Tyrrell and Nelson continue, here Montana state courts have jurisdiction over BNSF based on FELA, which allows railroad workers to “bring a FELA claim in any jurisdiction where the railroad is ‘doing business’ at the time of the suit.”
BNSF counters that Congress passed FELA to govern venue – that is, where the lawsuits may be heard – in suits filed by railroad workers; it does not give state courts jurisdiction over lawsuits like these. This is clear, BNSF argues, from both the text of the statute – whose reference to cases being brought “in a district court of the United States” applies only to federal courts – and the law’s history, which “confirms that Congress intended to provide an expansive choice of venue, because the general federal venue statute at that time limited venue in cases against corporations to the defendant’s place of incorporation.”
BNSF stresses that Congress did not need to “create special rules of personal jurisdiction so that injured workers would not be forced to travel to a railroad’s state of incorporation” – here, Delaware – to file their lawsuits. The plaintiffs in these cases, BNSF suggests, have several options: In addition to Delaware, they can also bring their lawsuits in the states where they were injured or in Texas.
Tyrrell and Nelson complain that BNSF’s reading of FELA would not actually provide much of a choice for a plaintiff who lives, for example, in North Dakota. Nor, they contend, can the railroad’s reading be squared with the text of FELA, which was intended to allow railroad workers to sue where “it is actually carrying on business.” By contrast, they stress, their reading is consistent with Congress’ intent to “load the dice a little in favor of workers” by enacting FELA; if BNSF doesn’t like the result that the law dictates, they conclude, it can take the issue up with Congress.
During his confirmation hearing, now-Justice Neil Gorsuch repeatedly stressed the need for courts to adhere to the plain text of a statute, and he reiterated that principle several times during his first week on the bench. Will the justices, including Gorsuch, focus on the text of FELA tomorrow, or instead on what the court meant by its unanimous ruling in Daimler three years ago – in which all of the current justices but Gorsuch participated? We’ll know more after the argument.
[Disclosure: Goldstein & Russell, P.C., whose attorneys contribute to this blog in various capacities, was among the counsel to the respondents in Daimler AG. I was affiliated with the firm at that time, but I am no longer affiliated with the firm, and the firm was not involved in this case.]
