Tyrrell v. BNSF Railway Co.

Tyrrell v. BNSF Railway Co., 2016 MT 126 (May 31, 2016) (Shea, J.; McKinnon, J., dissenting) (6-1, aff’d & rev’d) (consolidated appeals)

Issue: (1) Whether Montana courts have personal jurisdiction over BNSF under FELA, and (2) whether Montana courts have personal jurisdiction over BNSF under Montana law.

Short Answer: (1) Yes, and (2) yes.

Affirmed (denial of BNSF’s motion to dismiss) and reversed (granting BNSF’s motion to dismiss)

Facts: In March 2011, Nelson, a North Dakota resident, sued BNSF in Montana to recover damages for injuries sustained in his employment with BNSF. BNSF is a Delaware corporation with its principal place of business in Texas. Nelson does not allege that he ever worked in Montana or was injured in Montana.

In May 2014, Kelly Tyrrell sued BNSF in Montana for injuries sustained in Brent Tyrrell’s employment that eventually led to Brent’s death. The complaint did not allege that Brent ever worked in Montana or was injured in Montana. 

Procedural Posture & Holding: BNSF moved to dismiss Nelson’s complaint for lack of personal jurisdiction, and Judge Baugh granted the motion, citing Daimler AG v. Bauman, 134 S.Ct. 746 (2014). BNSF moved to dismiss Tyrell’s complaint for lack of personal jurisdiction, and Judge Moses denied the motion, concluding that under Montana’s long-arm statute, BNSF is found in Montana and has substantial, continuous and systematic activities within Montana for general jurisdiction purposes. Nelson appeals Judge Baugh’s order, and BNSF appeals Judge Moses’s order. The Court consolidated the cases for purposes of appeal, and affirms Judge Moses and reverses Judge Baugh.

Reasoning: (1) The U.S. Supreme Court has consistently interpreted FELA as allowing state courts to hear cases brought under FELA even where the only basis for jurisdiction is that the railroad does business in the forum state. BNSF contends that Daimler overruled prior U.S. Supreme Court cases; however, Daimler was not a FELA case and did not involve a railroad defendant. “Therefore, Daimler did not overrule decades of consistent U.S. Supreme Court precedent dictating that railroad employees may bring suit under the FELA wherever the railroad is ‘doing business.’” ¶ 17.

Additionally, based on the fact that BNSF owns and operates railroad lines in Montana, is licensed to do business and has offices and agents in Montana, and its agents transact business in Montana ordinarily connected to operating a railroad, BNSF is “properly sued” in Montana. Terte, 284 U.S. 284.

BNSF’s interpretation would mean that a Montana resident who was hired and employed by BNSF in Montana, and injured while working for BNSF in another state, would not be able to bring his action in the state where he resides and where his employer regularly conducts business. This directly contravenes the FELA’s purpose of protecting injured railroad workers from the “injustice” of having to travel far from home to bring suit against the railroad. Under FELA, Montana courts have general jurisdiction over BNSF.

(2) Montana courts conduct a two-step inquiry to determine whether the exercise of personal jurisdiction over a nonresident defendant is appropriate. First, whether M. R. Civ. P. 4(b)(1) provides jurisdiction, and if so, whether the exercise of jurisdiction comports with due process. Personal jurisdiction can be general or specific. A nonresident defendant with substantial or continuous contacts with Montana is “found” in Montana and may be subject to Montana’s jurisdiction even if the cause of action is unrelated to the defendant’s activities in Montana.

BNSF has substantial, continuous and systematic contacts with Montana, and is “found” in Montana under M.R. Civ. P. 4(b)(1). The Court concludes that Montana courts have general personal jurisdiction over BNSF.

Justice McKinnon’s Dissent: Justice McKinnon would conclude that Montana courts lack general personal jurisdiction over BNSF under the Due Process Clause, as interpreted by the U.S. Supreme Court in cases such as Daimler. The majority rejects the “at home” standard in favor of substantially the same formulation the Supreme Court rejected in Daimler. The majority does not contend that the plaintiffs could satisfy the “at home” standard. In Daimler, the U.S. Supreme Court explained that the proper inquiry for general jurisdiction “is not whether a foreign corporation’s in-forum contacts can be said to be in some sense ‘continuous and systematic,’” but rather “whether that corporation’s affiliations with the State are so ‘continuous and systematic’ as to render it essentially at home in the forum State.” ¶ 36. A corporation is “at home” where it is incorporated or where it has a principal place of business.

Justice McKinnon disagrees that due process requires less because the plaintiffs’ claims are based on FELA. Congress cannot confer personal jurisdiction, nor did it in 45 USC § 456, which is a venue statute. Even if it did, it does not confer jurisdiction on state courts, as by its plain language it applies only to federal courts.