If we’d learned about State ex rel. Norfolk Southern Railway Co. v. Dolan, No. SC95514, slip op. (Mo. Feb. 28, 2017) (“NSRC”), earlier, this would have been a breaking news post – but make no mistake about it, this is big news. Unanimously, the Missouri Supreme Court has, for all intents and purposes, put an end to Missouri’s notorious litigation tourism industry (about a month before the Legislature would have done the same).
NSRC is a railway accident case, not a product liability action, but the jurisdictional facts are familiar to anyone interested in Missouri jurisdiction and venue issues. An out-of-state litigation-tourist, personal-injury plaintiff sued a large out-of-state corporation in Missouri state court (county not stated, but we can guess) over injuries not suffered in Missouri. NSRC, slip op. at 2-3. The Missouri Supreme Court made three major rulings: (1) no general jurisdiction exists over the non-resident corporate defendant because it was not “at home” in Missouri; (2) no specific jurisdiction existed because the litigation tourist’s injuries did not “relate to” the defendant’s Missouri activities; and (3) the defendant’s compliance with the Missouri statute governing corporate registration did not constitute “consent” to general personal jurisdiction.
First, general jurisdiction. Due process under Daimler AG v. Bauman, 134 S. Ct. 746, 751 (2014), requires that a corporation be “at home” in the state in question. While the defendant conducted “continuous and systematic” business in Missouri (and in 21 other states), that business “represents a tiny portion of [defendant’s] entire nationwide business.” NSRC, slip op. at 8. Game over on general jurisdiction . Bauman “observed that finding a corporation at home wherever it does business would destroy the distinction between general and specific jurisdiction.” Id. at 9.
Second, specific jurisdiction. “Because [defendant] has purposefully availed itself of the opportunity to do business in Missouri, it would be subject to specific jurisdiction in Missouri. But that jurisdiction would exist only over claims that are related to those contacts.” Id. at 11. Injuries suffered outside of the state are not “related to” those in-state activities. That a plaintiff “could sue in Missouri in a case in which the injury arose out of his contacts with Missouri does not support finding general personal jurisdiction” where the injuries were suffered elsewhere. Id. at 12. Simply because a plaintiff’s injuries arise out of the same general activities (“railroad business”) as the defendant conducted in Missouri doesn’t cut it:
To say this same conduct confers specific jurisdiction over suits the facts of which have no relationship to the forum state would be to turn specific jurisdiction on its head. There would never be a need to discuss general jurisdiction, for every state would have specific jurisdiction over every national business corporation.
NSRC, slip op. at 13. A statutory venue provision (not relevant to product liability) cannot provide specific jurisdiction that violates due process. Id. at 13-15. See, in particular footnote 6 (even if statute did so provide, it would “be inconsistent with [Bauman’s] rejection of doing business as a basis for jurisdiction”).
Third, jurisdiction by consent. It doesn’t exist as a consequence of Missouri corporate registration requirements. “[A] broad inference of consent based on registration would allow national corporations to be sued in every state, rendering [Bauman] pointless.” NSRC, slip op. at 16. The court construed Missouri’s vague registration statute to be constitutional:
The plain language of Missouri’s registration statutes does not mention consent to personal jurisdiction for unrelated claims, nor does it purport to provide an independent basis for jurisdiction over foreign corporations that register in Missouri. . . . [T]he registration statute does not provide an independent basis for broadening Missouri’s personal jurisdiction to include suits unrelated to the corporation’s forum activities when the usual bases for general jurisdiction are not present.
Id. at 16-17. All prior decisions that “suggest otherwise . . . should no longer be followed.” Id. at 18.
That should do it for litigation tourism in Missouri. Unless a corporation is incorporated or has its principal place of business in Missouri, litigation tourist plaintiffs injured by products sold elsewhere cannot bring suit in, say St. Louis City – period. Good-bye multi-plaintiff misjoined complaints. Good-bye litigation tourist talc, asbestos, prescription drug, and medical device verdicts. Litigation tourists go home.
Ever since Bauman, we here at the blog been standing on our soapboxes and screaming at the tops of our lungs for defendants to preserve personal jurisdiction as a defense. We hope everyone on the right side of the “v.” in Missouri has been listening. It’s time to rain motions to dismiss on the other side like Stephen Curry rains threes. It’s showtime in the Show Me State.
That doesn’t render the current tort reform efforts pointless, though. Far from it. The bizarrely-read Missouri venue rules still need to be fixed so that plaintiffs from all over Missouri don’t continue flocking to you-know where to sue large Missouri-based corporations. Otherwise, those companies won’t stay Missouri based, and a lot of people will be out of work. The law still needs to be clarified so that “relates to” isn’t perverted to include claims of a “common” nationwide scheme to promote a product nationwide.
What NSRC does mean is that the tort reform being proposed just became a lot less controversial. After all, now a lot of it is just codifying existing law. The other side’s objections of retroactivity, for example, just vanished, since in large part any new laws will confirm what the Missouri Supreme Court just held was the law all along.
Looking ahead, we hope that the United States Supreme Court in Bristol-Myers Squibb v. Superior Court will see fit to replicate the second ruling in NSRC nationwide.