Wednesday, January 25, 2017

Another Personal Jurisdiction Case in the Supreme Court

By Professor Simona Grossi

Some people have asked me to comment on the latest personal jurisdiction case pending in the U.S. Supreme Court. It did strike me that the Supreme Court has granted review in another personal jurisdiction case. As described by the Petitioner in BNSF Railway Company v. Tyrell, No. 16-405, the question presented is the following:
Whether a state court may decline to follow this Court’s decision in Daimler AG v. Bauman, which held that the Due Process Clause forbids a state court from exercising general personal jurisdiction over a defendant that is not at home in the forum state, in a suit against an American defendant under the Federal Employers’ Liability Act.
I would describe the question somewhat differently. I would say that the question is whether FELA authorizes the exercise of personal jurisdiction in state and federal courts in those states in which a railroad is “doing business,” and if so, whether Congress has the power to do so.

In relevant part, FELA provides that
An action may be brought in a district court of the United States, in the district of the residence of the defendant, or in which the cause of action arose, or in which the defendant shall be doing business at the time of commencing such action. The jurisdiction of the courts of the United States under this chapter shall be concurrent with that of the courts of the several States.
45 U.S.C. §56. Plaintiffs filed their FELA suit in a Montana state court. The defendant did not reside in Montana, nor did the injury-causing incident occur there. The defendant was, however, engaged in regular course of business in Montana. Thus, in filing their suit in Montana, the plaintiffs relied on the doing-business portion of §56.
The defendant argues that §56 does not pertain to personal jurisdiction but alternatively, if it does, it runs afoul of Daimler AG v. Bauman, since “doing business” in the state is not enough to satisfy the “at home” standard of general jurisdiction.

The Montana Supreme Court held that Daimler did not apply to FELA cases and that FELA in fact authorizes the exercise of personal jurisdiction in state courts where the railroad is doing business. I think the Montana Supreme Court got it right.

With respect to the scope of FELA, the defendant argued that §56 is limited to venue and subject matter jurisdiction. Essentially the defendant wants the US Supreme Court to adopt a mechanical interpretation that draws bright lines between venue, personal jurisdiction, and subject matter jurisdiction. The Montana Supreme Court, however, read FELA in view of its underlying purpose, which was to provide the injured plaintiffs with a range of alternate fora, that included both state and federal courts, all of which would also be convenient to the defendant. This more holistic approach recognizes the close relationship among the three procedural categories, which is particularly evident with respect to venue and personal jurisdiction. In fact, carefully considered, at least when venue is premised on the activities of the defendant in the forum, venue operates as a subset of personal jurisdiction analysis. Notice also the reference to personal jurisdiction analysis in §1391(c)(2) & (d). If this interpretation of FELA is incorrect, it would seem that federal courts would also be divested of personal jurisdiction on the same reasoning as the defendant asserts. If defendant is right, the plaintiffs’ choices of forum are limited and the intent of Congress is subverted.

Clearly Congress has the authority to vest federal courts with nationwide service of process in federal question cases. See Fed. R. Civ. P. 4(k)(1)(C). There’s nothing in the Constitution that would preclude Congress from vesting state courts with similar authority in federal question cases. This is not a Fourteenth Amendment problem since it involves congressional action necessary and proper to the implementation of FELA. Hence, Daimler AG v. Bauman does not apply to this case. To the extent that there are Due Process limits, the measure would be contacts with the United States, not with any particular state.

One final point. It’s clear from reading the petition for certiorari and the petitioner’s reply brief (as well as the briefs of the several amici) that the defendant’s concerns is that Montana courts are too plaintiff friendly. I’m worried that the U.S. Supreme Court, which has become increasingly hostile to plaintiffs, might overlook the overarching, fundamental principles in favor of the myopic and interested defendant’s approach.

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