In BNSF Railway Co. v. Tyrrell, the Supreme Court earlier this week held that Montana could not claim general personal jurisdiction (that is, the ability to hear claims arising anywhere in the world) over a railroad not incorporated or headquartered in Montana but with extensive operations in the state. According to the Court (some citations omitted):
Because [federal law] does not authorize state courts to exercise personal jurisdiction over a railroad solely on the ground that the railroad does some business in their States, the Montana courts’ assertion of personal jurisdiction over BNSF here must rest on Mont. Rule Civ. Proc. 4(b)(1), the State’s provision for the exercise of personal jurisdiction over “persons found” in Montana. BNSF does not contest that it is “found within” Montana as the State’s courts comprehend that rule. We therefore inquire whether the Montana courts’ exercise of personal jurisdiction under Montana law comports with the Due Process Clause of the Fourteenth Amendment.
In International Shoe, this Court explained that a state court may exercise personal jurisdiction over an out-of state defendant who has “certain minimum contacts with [the State] such that the maintenance of the suit does not offend ‘traditional notions of fair play and substantial justice.’” 326 U. S., at 316. Elaborating on this guide, we have distinguished between specific or case-linked jurisdiction and general or all-purpose jurisdiction. [citations omitted] Because neither Nelson nor Tyrrell alleges any injury from work in or related to Montana, only the propriety of general jurisdiction is at issue here. Goodyear and Daimler clarified that “[a] court may assert general jurisdiction over foreign (sister-state or foreign-country) corporations to hear any and all claims against them when their affiliations with the State are so ‘continuous and systematic’ as to render them essentially at home in the forum State.” The “paradigm” forums in which a corporate defendant is “at home,” we explained, are the corporation’s place of incorporation and its principal place of business. The exercise of general jurisdiction is not limited to these forums; in an “exceptional case,” a corporate defendant’s operations in another forum “may be so substantial and of such a nature as to render the corporation at home in that State.” We suggested that Perkins v. Benguet Consol. Mining Co., 342 U. S. 437 (1952), exemplified such a case. In Perkins, war had forced the defendant corporation’s owner to temporarily relocate the enterprise from the Philippines to Ohio. Because Ohio then became “the center of the corporation’s wartime activities,” was proper there …
BNSF, we repeat, is not incorporated in Montana and does not maintain its principal place of business there. Nor is BNSF so heavily engaged in activity in Montana “as to render [it] essentially at home” in that State. As earlier noted, BNSF has over 2,000 miles of railroad track and more than 2,000 employees in Montana. But, as we observed in Daimler, “the general jurisdiction inquiry does not focus solely on the magnitude of the defendant’s in-state contacts.”). Rather, the inquiry “calls for an appraisal of a corporation’s activities in their entirety”; “[a] corporation that operates in many places can scarcely be deemed at home in all of them.” In short, the business BNSF does in Montana is sufficient to subject the railroad to specific personal jurisdiction in that State on claims related to the business it does in Montana. But instate business, we clarified in Daimler and Goodyear, does not suffice to permit the assertion of general jurisdiction over claims like Nelson’s and Tyrrell’s that are unrelated to any activity occurring in Montana.
I find this highly dubious and completely unjustified as an original matter. To begin, my sense of of "fair play and substantial justice" is not offended. Montana stated very clearly that if a corporation chooses to do extensive business in Montana it would be subject to suit in Montana for its wrongdoings, whether done in Montana or elsewhere. BNSF chose to do extensive business in Montana. Moreover, because BNSF does business in Montana, and because no one doubts that BNSF can be sued in Montana for wrongs committed in Montana, BNSF no doubt has many lawyers capable of defending it in Montana and much experience with Montana litigation. This does not seem remotely contrary to "fair play," and while "substantial justice" is an essential empty term I don't see how justice is dis-served by have this case litigated in Montana as opposed to some other state, as BNSF is surely able to defend itself in Montana courts. (There might be particular aspects of particular suits that would make them more appropriately litigated elsewhere, but this would be handled by common law doctrines such as forum non conveiens rather than constitutional limits on jurisdiction.)
Of course, assuming that the due process clause is not just an open-ended delegation to courts to pick their own ideas of "fair play and substantial justice", the key question from an originalist perspective is whether this sort of assertion of jurisdiction was thought fundamentally unfair at the time of the adoption of the due process clause. Perhaps it was, but I have seen no evidence that it was (there is none in the Court's opinion, nor in the Daimler and Goodyear cases on which the Court principally relies). Notably, as Justice Scalia explained in Burnham v. Superior Court, in mid-nineteenth-century procedure a state could claim personal jurisdiction over an individual defendant if the individual was merely present in the jurisdiction long enough to be served with notice of the suit. That procedure seems much more in tension with "fair play and substantial justice" that what BNSF suffered. If Mr. Burnham — who had no material connections with California apart from an ill-advised vacation there — could be sued in California on a claim having no relationship to California just because he was served in California, I cannot imagine what injustice BNSF is complaining about.
In any event, especially given that Montana's claim of jurisdiction does not seem manifestly unfair to BNSF, the burden should be on BNSF to show that it is inconsistent with ratification-era ideas of due process. (As explained here, I think this would have been Justice Scalia's approach). True, it's likely a better rule that corporations must be sued in their place of incorporation or principal place of business (or where the wrong occurred) — among other things, to discourage forum shopping. But from an originalist perspective the question isn't what rule makes for more efficient litigation, especially since I assume Congress could establish a uniform national rule of personal jurisdiction for businesses engaged in interstate commerce should Congress think interstate corporations were being treated unfairly by the states.
Interestingly, Justice Thomas joined the Court's majority in the BNSF case. I assume he did so on the basis of precedent, since he did not (as he often does) write separately to suggest reexamining the original meaning in this area. But that suggests two things about Justice Thomas: (a) he is more willing to rely on precedent than is sometimes said, and (b) he does not seem to have a fully articulated theory of when he fully relies on precedent and when he doesn't. (In this respect he is no different from others, including Justice Scalia).
Posted at 6:43 AM