BNSF Railway: SCOTUS Narrows General Jurisdiction for Corporate Defendants and Limits the Reach of Wisconsin's Long-Arm Statute

05 June 2017 Wisconsin Appellate Law Blog

Last week, in BNSF Railway Co. v. Tyrrell, 581 U.S. ___, No. 16-405, the U.S. Supreme Court reversed the Montana Supreme Court and concluded that BNSF Railway was not subject to general jurisdiction in Montana to answer for alleged work-related injuries occurring in North Dakota and South Dakota. Though BNSF maintained over 2,000 miles of railroad track in Montana and employed more than 2,000 workers there, it was a Delaware corporation with its principal place of business in Texas. Despite BNSF’s significant ties to Montana and the revenue it generated from its work there, the Court nevertheless held that the Railway was not “at home” there for purposes of defending claims arising outside the state.

This represents a continuation of the Court’s earlier decisions in Goodyear Dunlop Tires Operations v. Brown, 564 U.S. 915 (2011), and Daimler AG v. Bauman, 134 S. Ct. 746 (2014). As the Court noted in Goodyear, “specific jurisdiction has become the centerpiece of modern jurisdiction theory, while general jurisdiction [has played] a reduced role.” Accordingly, Goodyear took a deep look at what was necessary to subject corporations to general jurisdiction in a state and concluded that it was appropriate only “when their affiliations with the State are so ‘continuous and systematic’ as to render them essentially at home in the forum State.”

BNSF Railway demonstrates that the Court really meant what it said when it came to limiting the scope of general jurisdiction. Based on this trilogy of cases, it appears clear that in all but the most exceptional of cases, a corporation will be subject to general jurisdiction in a forum only where it is incorporated or maintains its headquarters in that forum. The only example of an exceptional case that the Court provides is one where an international company temporarily relocated from the Philippines to Ohio during World War II, rendering general jurisdiction appropriate there.

For Wisconsin litigants seeking to bring an out-of-state party to court here, this case is a reminder that simply satisfying the state’s long-arm statute is not necessarily enough to constitutionally secure personal jurisdiction over a defendant. Thus, though Wisconsin provides for jurisdiction over a defendant any time it “[i]s engaged in substantial and not isolated activities within this state,” Wis. Stat. § 801.05(1)(d), the assertion of jurisdiction must also be consistent with “traditional notions of fair play and substantial justice.” Even though “§ 801.05 was intended to provide for the exercise of jurisdiction over nonresident defendants to the full extent consistent with the requisites of due process of law,” Rasmussen v. General Motors Corp., 2011 WI 52, ¶ 20, this new general jurisdiction trilogy seems to have redefined the limits of constitutional due process. Justice Sotomayor, the sole dissenter in BNSF (who wrote a concurrence in Daimler that made the same point), sees this as a further sign that the Court’s “modern jurisdiction theory” has abandoned what she sees as the significance that International Shoe Co. v. Washington, 326 U.S. 310 (1945), assigned to a defendant’s “minimum contacts” with a state (the idea behind § 801.05(1)(d)), except in the context of specific jurisdiction. Justice Ginsburg’s response is to emphasize that the State of Washington’s exercise of jurisdiction in International Shoe was, in fact, what we would now recognize as one of specific, not general, jurisdiction.

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