Personal Jurisdiction Decision by Missouri Supreme Court to Significantly Impact Asbestos Litigation in Missouri
- March 8, 2017
- Asbestos Litigation Analysis
St. Louis City, Missouri is often termed a “judicial hellhole” for corporate defendants in product liability actions, most notably in asbestos litigation. Until recently, Missouri courts offered little guidance on what constituted general jurisdiction for corporate defendants in light of the U.S. Supreme Court’s holding in Daimler AG v. Bauman, 134 S.Ct. 746 (2014). In Daimler, the Supreme Court held that absent exceptional circumstances, a company is only subject to general jurisdiction in its state of formation or where it has its principal place of business, i.e., where it is “at home. On February 28, 2017, the Missouri Supreme Court issued an opinion clarifying Missouri’s position on general personal jurisdiction over foreign corporations in light of Daimler.
State ex rel. Norfolk Southern Railway Company v. Dolan involved a personal injury claim brought under the Federal Employer’s Liability Act. Filed in St. Louis County, the plaintiff was an Indiana resident claiming cumulative trauma injury sustained during his years of employment with Norfolk in Indiana. The plaintiff never worked for Norfolk in Missouri. Other than the statement in the petition that Norfolk conducts substantial business and owns property in Missouri, the plaintiff did not allege any basis for specific or general personal jurisdiction. Defendant Norfolk Southern Railway Company was a Virginia corporation with its principal place of business in Virginia. Norfolk contacts with Missouri included:
- Annual registration with Missouri and designation of an agent to receive service of process. The court noted this was in compliance with Missouri’s foreign business registration statute.
- Norfolk had brought suit and been sued in Missouri courts numerous times, but only for matters arising from or related to its activities in Missouri.
In its opinion, the Missouri Supreme Court summarized the general principles governing personal jurisdiction. Citing Daimler AG v. Bauman, 134 S. Ct. 746 (2014), personal jurisdiction was a due process requirement that limited the power of state courts over litigants. It could be general (all-purpose), specific (conduct-linked), or consensual (waived by defendant).
First, the majority of the court’s opinion discussed general jurisdiction and the lack thereof. General jurisdiction exists in suits not arising out of related to the defendant’s contacts with the forum. In recent years, the U.S. Supreme Court in Daimler clarified the test for when the exercise of general jurisdiction over a corporation comports with due process. A court normally can exercise general jurisdiction over a corporation only when the corporation’s place of incorporation or its principal place of business is in the forum state. General jurisdiction may exist in an additional state if the corporation’s activities in that other state are so substantial and of such a nature as to render it at home in that state.
The plaintiff argued that Norfolk’s continuous and systematic activity in Missouri through its miles of railroad track conferred general jurisdiction. The court noted that before Daimler, these would have supported finding general jurisdiction. However, “it is no longer the law.” The defendant in Daimler conducted substantial and continuous business in California selling luxury cars; however, it did so throughout the United States, and California business constituted only 2.4 percent of its total sales. The Supreme Court held this was not sufficient to subject the corporation to general jurisdiction in the state for all causes of action not related to that state. Like the defendant in Daimler, Norfolk’s activities in Missouri amounted to 2 percent of its nationwide business; these contacts were insufficient to establish general jurisdiction.
The court likewise rejected the plaintiff’s argument that this was an “exceptional case” anticipated by the Supreme Court in Daimler. To be such an “exceptional case,” the forum state must be a surrogate for place of incorporation or home office such that it is essentially at home in that state. Finding a corporation “essentially at home” required comparing its activities in the forum state with its activities nationwide and worldwide. Finding a corporation at home wherever it does business destroyed the distinction between general and specific jurisdiction.
Second, the court found that specific jurisdiction did not exist because the plaintiff’s claims were not related to Norfolk’s activity in Missouri. The plaintiff never worked for Norfolk in Missouri. The plaintiff argued that Norfolk engaged in railroad business in Missouri, and since his injuries arose out of railroad business conducted by Norfolk in Indiana, these injuries arose from the same type of activities as Norfolk’s Missouri activities. However none of the cases cited by the plaintiff supported the proposition that, if a company was a national company that did the same type of business in the forum state as in the rest of the country, it could be sued anywhere.
Third, Norfolk’s compliance with Missouri’s foreign corporation registration statutes did not create consent to jurisdiction. The plain language of Missouri’s registration statutes did not mention consent to personal jurisdiction for unrelated claims, nor do they provide an independent basis for jurisdiction over foreign corporations that register in Missouri. Finding that registration created consent to jurisdiction would allow national corporations to be sued in every state, rendering Daimler pointless.
This ruling by the Missouri Supreme Court should hopefully put the jurisdiction issue against foreign corporate defendants to rest and help curb the blatant forum shopping performed by the plaintiff’s bar. Limiting general jurisdiction to forums in which corporate defendants are “at home” will greatly limit the number of corporate defendants being sued in Missouri for asbestos claims. This may result in increased litigation in other forums, such as Madison County, Illinois, another “judicial hellhole” for corporate defendants. Now that St. Louis City is limited, only time will tell which jurisdiction will pick up new asbestos claims.