Update on Available Venue in Virginia for Railroad Suits Against Norfolk Southern or CSX | Shapiro, Washburn & Sharp

In Daimler AG v. Bauman, 134 S. Ct. 746 (2014), citing constitutional limitations on courts’ exercise of jurisdiction over corporations, the U.S. Supreme Court held that courts may only assert general personal jurisdiction (i.e. jurisdiction over any claim against an entity, regardless of whether or not the events giving rise to that claim occurred in the forum state) when a corporation’s affiliations with the state in which suit is brought are “so constant and pervasive as to render [it] essentially at home in the forum State.’” 134 S. Ct. at 751 (quoting Goodyear Dunlop Tires Operations, S.A. v. Brown, 131 S. Ct. 2846, 2851 (2011)).

The Court went on to state that there are only a limited set of affiliations with a forum that would render a defendant amenable to all-purpose jurisdiction and those affiliations would be the corporation either (1) maintaining its principal place of business or (2) being incorporated in the state.

The Court in Daimler AG explicitly rejected the idea that general jurisdiction may be exercised over an entity as long as that entity simply “engages in a substantial, continuous, and systematic course of business” in that forum. Id. at 761.

Supreme Court Narrows Minimum Contacts Test in 2017 FELA Case

The Supreme Court appears to have narrowed the minimum contacts test in BNSF v. Tyrrell, 137 S. Ct. 1549 (2017). Citing Goodyear Dunlop Tires Operations, S.A. v. Brown and Daimler, the Court held that a state may exercise general jurisdiction over corporations only when the affiliation between the state and the corporation are so “continuous and systematic” as to essentially render the corporation home there.

The Court elaborated, as in Goodyear and Daimler, that corporations are at home only in their place of incorporation and principal place of business, save for a truly “exceptional case.” The Court explained that FELA did not alter this due process constraint and concluded BNSF was not at home in Montana (the jurisdiction where plaintiff filed suit). 

It is hard to imagine how much business will be enough to meet the “exceptional case.” BNSF Railway Company is a Delaware corporation whose principal place of business is Texas. Around 10 percent of BNSF’s revenue ($1.75 billion in 2013) comes from Montana, where it employs over 2100 people (less than 5 percent of its workforce) and owns over 2000 miles of railroad track (around 6 percent of its total mileage).  The Supreme Court felt this was too insignificant.

Virginia May Become a Key Jurisdiction for Future FELA Litigation

Given the precedent set in Tyrell, it will not be surprising to see an increase in FELA, and related litigation, occurring within Virginia (where our law firm is based). Why? Because two of the nation’s major railroads have registered agents here. Currently the Virginia State Corporation commission shows the following:

CSX Transportation, Inc.

Norfolk Southern Corporation

As you can see, the CSX registered agent is in a county just outside the city of Richmond. While not nearly as good for plaintiffs as the City of Richmond or some other jurisdictions in Virginia, Glen Allen is not a terrible plaintiff’s venue. Also, the Richmond district of the federal court over this area is another option for suits against CSX.

Unlike CSX, Norfolk Southern maintains both its registered agent and principal place of business in Norfolk, Virginia which is a decent venue for plaintiffs. The federal court in Norfolk (i.e. the United States District Court for the Eastern District of Virginia) has long been considered a tough venue for plaintiffs. Nonetheless, it has a “rocket docket” and trial dates can often be obtained within nine months of filing. What it lacks in being a great plaintiffs venue it gains in the swift and quick administration of justice and the early availability of trial dates.