U.S. Supreme Court Tyrrell Decision Impacts Virginia Cases Against CSX and Norfolk Southern | Shapiro, Washburn & Sharp

Every co-counsel involved in railroad litigation or FELA cases is familiar with the watershed decision handed down by the U.S. Supreme Court on May 30, 2017 in BNSF Railway Co. v. Tyrrell.  In an 8-1 decision authored by Justice Ginsburg, the Supreme Court basically upended Federal Employers Liability Act choice of state decision-making. This was a monumental decision since, for a century, courts across the country agreed that railroads could be sued wherever they did business in the United States. This line of reasoning is no longer effective under Tyrrell.

Background on the Tyrell Case

In Tyrrell, the court announced that corporations, whether railroads or otherwise, can be sued in the following jurisdictions:

  • the state of their incorporation;
  • the state where they have a principal place of business; and
  • in any state that the corporation does business if the claims in the suit are related to the acts or the business of the corporation inside that particular state.

The Court also left open “exceptional” circumstances where a company is so heavily engaged in an activity in a state that suing it is not improper because they have essentially become amenable to personal jurisdiction in that state. 

Essentially, railroads can no longer be sued wherever they do business, but instead in a state where there is some act related to the lawsuit or where there are incorporated or have a principal place of business. 

Virginia Jurisdiction for Norfolk Southern and CSX

Our law firm is based in Virginia Beach and is a 15 minute drive from Norfolk Southern’s headquarters that are based in Norfolk, Virginia. Since Norfolk Southern is incorporated in Virginia and has a principal place of business in Norfolk, Virginia, NS will likely be subject to Virginia jurisdiction in a FELA case. 

State court jurisdiction in the Norfolk Circuit Courts is considered an acceptable plaintiff’s jurisdiction, as Norfolk has 246,000 people, and the Federal District Court embracing that area is the Norfolk Division of the Eastern District of Virginia. 

The Eastern District of Virginia has, for many decades, been considered the fastest filing-to-trial jurisdiction in the United States.  It’s still in the top three.  The court’s jury pool typically draws from the Eastern shore of Virginia, a very rural area, through the Norfolk and Hampton Roads area and west out to Smithfield. 

No one has ever considered the Norfolk Division of the Eastern District of Virginia to be a plaintiff-friendly jurisdiction. Nevertheless, there have been a number of plaintiffs’ verdicts there in the last several years in different types of tort cases and some practitioners are taking a second look at the jurisdiction, especially since NS can always be sued there under the logic of Tyrrell. 

With regard to CSX Transportation, Inc., the railroad is also incorporated in Virginia.  However, its principal place of business is in Jacksonville, Florida.  Under the new Tyrrell decision, CSX can be sued in Virginia in any case against it or can be sued in Jacksonville, Florida or in a state where it does business if the claims relating to the suit arise in that state.  Interestingly, CSX maintains its registered agent in Virginia in Henrico County, which is one county over from the City of Richmond.  That would put federal actions against CSX Transportation, Inc. in the Richmond Division of the Eastern District of Virginia. This allows state court actions in Henrico County, which is adjacent to the City of Richmond. 

For many years, Henrico County was considered a bedroom community and not a great plaintiff’s venue. For example, in the 2016 presidential election between Clinton and Trump, Clinton gathered 57 percent of the Henrico County vote and President Trump received 36 percent.  In Norfolk, where NS is based, Clinton received 68 percent of the vote compared to 25 percent for President Trump. 

Anti-Venue Shopping Statute

Based on Tyrrell, it appears certain that CSX and Norfolk Southern cannot constitutionally try to change venue outside the state of Virginia if they are sued in the state, based on their incorporation.  Counsel should be aware that Virginia does have an anti‑venue shopping statute (§ 8.01-265) that reads, in pertinent part:

In addition to the provisions of § 8.01-264 …. the court wherein an action is commenced may, upon motion by any party and for good cause shown, (i) dismiss an action brought by a person who is not a resident of the Commonwealth without prejudice under such conditions as the court deems appropriate if the cause of action arose outside of the Commonwealth and if the court determines that a more convenient forum which has jurisdiction over all parties is available in a jurisdiction other than the Commonwealth or (ii) transfer the action to any fair and convenient forum having jurisdiction within the Commonwealth. Such conditions as the court deems appropriate shall include, but not be limited to, a requirement that the defendant agree not to assert the statute of limitations as a defense if the action is brought in a more convenient forum within a time specified by the court. The court, on motion of any party and for good cause shown, may retain the action for trial.

It is doubtful that this statute is constitutional and will be unable to withstand scrutiny under the logic of the Supreme Court’s Tyrrell decision.  It is a new world order with personal jurisdiction against corporations, not only in FELA cases, and a Virginia venue may be preferable to a rural or remote venue in some circumstances.