The US Supreme Court [official website] ruled [opinion, PDF] Tuesday in BNSF Railway Co. v. Tyrrell [SCOTUSblog materials] that the Federal Employers’ Liability Act (FELA) does not apply to out-of-state corporations. FELA holds railroads liable in money damages to their employees for injuries that occurred on the job. The case was filed in Montana state court, but the injuries did not occur in the state. Writing for the majority, Justice Ruth Bader Ginsberg explained “that the Fourteenth Amendment’s Due Process Clause does not permit a State to hale an out-of-state corporation before its courts when the corporation is not ‘home’; in the State and the episode-in-suit occurred elsewhere.”Justice Sonia Sotomayer dissented in part, stating that this decision will create a windfall to make it more difficult for multi-state or multi-national corporations to be subject to a jurisdiction in any location other than their principal places of business or of incorporation.
This is the second time this month that the Supreme Court has ruled in favor of nationwide corporations seeking to limit the jurisdictions where they can be sued. One week ago, the Supreme Court decided [JURIST report] in TC Heartland LLC v. Kraft Foods Group Brands LLC [opinion, PDF] what constituted “residence” in the context of patent law. The court held that residence refers only to the state of incorporation, which limits where suit can be filed. These two jurisdiction cases will have major implications for the future of personal jurisdiction over multi-state or multi-national corporations. The outcomes of these cases may foreshadow [NLJ report] the decision of a similar pending case, Bristol-Myers Squibb v. Superior Court of California, which challenges a lawsuit brought by injured users of Plavix from several states even though some of the plaintiffs had little or no connection to California.