Deleon v. BNSF Ry. Co.

• Decision Date: 11 September 2018
• Docket Number: DA 17-0627
• Parties: Eddie M. DELEON, Jason Kingery and Steve Paul Beck, Plaintiff and Appellant, v. BNSF RAILWAY COMPANY, a Delaware corporation, Defendant and Appellee.
• Court: Montana Supreme Court

392 Mont. 446

426 P.3d 1

2018 MT 219

Eddie M. DELEON, Jason Kingery and Steve Paul Beck, Plaintiff and Appellant,

v.BNSF RAILWAY COMPANY, a Delaware corporation, Defendant and Appellee.

DA 17-0627

Supreme Court of Montana.

Submitted on Briefs: July 11, 2018

Decided: September 11, 2018

For Appellant: Jon M. Moyers, Moyers Law P.C., Billings, Montana, Kathryn Kohn Troldahl, Kohn Law, P.A., Minneapolis, Minnesota

For Appellee: Randy J. Cox, Scott M. Stearns, Christopher L. Decker, Boone Karlberg P.C., Missoula, Montana

Justice Laurie McKinnon delivered the Opinion of the Court.

¶ 1 Eddie M. DeLeon, Jason Kingery, and Steve Paul Beck (collectively, Plaintiffs) each filed suit against BNSF Railway Company (BNSF) in Montana’s Thirteenth Judicial District Court, Yellowstone County, for injuries allegedly sustained while working for BNSF in states other than Montana. BNSF moved to dismiss Plaintiffs’ claims for lack of personal jurisdiction. The District Court granted BNSF’s motions to dismiss and each Plaintiff appealed. We address the following issue in Plaintiffs’ consolidated appeal:

Does a company consent to general personal jurisdiction in Montana when it registers to do business and voluntarily conducts business activities in Montana?

¶ 2 We conclude a company does not consent to general personal jurisdiction by registering to do business in Montana and voluntarily conducting in-state business activities. We therefore affirm the District Court’s orders granting BNSF’s motions to dismiss for lack of personal jurisdiction.

FACTUAL AND PROCEDURAL BACKGROUND

¶ 3 Plaintiffs each filed Federal Employers’ Liability Act (FELA) negligence claims against BNSF in Montana’s Thirteenth Judicial District Court, Yellowstone County. BNSF is a rail carrier incorporated in Delaware with its principal place of business in Texas. BNSF does business in Montana: it has 2,061 miles of railroad track in Montana; employs approximately 2,100 workers in Montana; maintains an automotive facility in Montana; and generates less than 10% of its total revenue in Montana. BNSF Ry. Co. v. Tyrrell , 581 U.S. ––––, ––––, 137 S.Ct. 1549, 1554, 198 L.Ed.2d 36 (2017). In order to lawfully conduct its business activities in Montana, BNSF registered to do business and designated an in-state agent for service of process.

¶ 4 In December 2011, plaintiff Kingery, a Missouri resident, filed to recover for injuries he allegedly sustained while working for BNSF outside of Montana. In June 2013, plaintiff DeLeon, a Texas resident, filed to recover for injuries he allegedly sustained while working for BNSF in Texas. In January 2014, plaintiff Beck, a Texas resident, filed to recover for injuries he allegedly sustained while working for BNSF in Texas. Thereafter, Plaintiffs’ cases followed substantially similar procedural paths.

¶ 5 BNSF moved to dismiss Plaintiffs’ claims pursuant to M. R. Civ. P. 12(b)(2) for lack of personal jurisdiction. Plaintiffs responded to BNSF’s motions to dismiss, maintaining Montana had personal jurisdiction over BNSF because the rail carrier consented to general personal jurisdiction in Montana when it registered to do business and subsequently conducted in-state business activities. The District Court determined BNSF did not consent to personal jurisdiction in Montana and accordingly dismissed Plaintiffs’ claims for lack of personal jurisdiction. Plaintiffs appeal.

STANDARD OF REVIEW

¶ 6 The determination of personal jurisdiction is a question of law that we review de novo. Tackett v. Duncan , 2014 MT 253, ¶ 16, 376 Mont. 348, 334 P.3d 920. A motion to dismiss is construed in the light most favorable to the nonmoving party and a court will not grant one unless, taking all well-pleaded allegations of fact as true, it appears beyond doubt that no set of facts supports the claim of relief. Buckles v. Cont’l Res., Inc. , 2017 MT 235, ¶ 9, 388 Mont. 517, 402 P.3d 1213.

DISCUSSION

¶ 7 Personal jurisdiction refers to a court’s power over the parties in a proceeding. Personal Jurisdiction , Black’s Law Dictionary (10th ed. 2014). We distinguish between general (i.e., all-purpose) and specific (i.e., case-linked) personal jurisdiction. Buckles , ¶ 12 ; M. R. Civ. P. 4(b)(1). General personal jurisdiction is premised upon the defendant’s relationship to the forum state, while specific personal jurisdiction is premised upon the defendant’s relationship to both the forum state and the particular cause of action.

¶ 8 General personal jurisdiction exists when a corporation’s affiliations with Montana are so continuous and systematic as to render it essentially at home in Montana. See BNSF , 581 U.S. at ––––, 137 S.Ct. at 1558 ; Daimler AG v. Bauman , 571 U.S. 117, 138-39, 134 S.Ct. 746, 761, 187 L.Ed.2d 624 (2014) ; Goodyear Dunlop Tires Operations, S.A. v. Brown , 564 U.S. 915, 919, 131 S.Ct. 2846, 2851, 180 L.Ed.2d 796 (2011). A corporation is essentially at home where it is incorporated; where it maintains its principal place of business; or, in exceptional cases, where its continuous and systematic affiliations with the state render it essentially at home—where its continuous corporate operations are "so substantial and of such a nature as to justify suit ... on causes of action arising from dealings entirely distinct from those activities ." Daimler , 571 U.S. at 138-39, 134 S.Ct. at 761 (quoting International Shoe Co. v. Washington , 326 U.S. 310, 318, 66 S.Ct. 154, 159, 90 L.Ed. 95 (1945) ) (emphasis and omission in original); accord BNSF , 581 U.S. at ––––, 137 S.Ct. at 1558. If a Montana court has general personal jurisdiction over a defendant, the court may adjudicate any claim against that defendant, regardless of where the cause of action arose. See King v. Am. Family Mut. Ins. Co. , 632 F.3d 570, 579 (9th Cir. 2011). BNSF—which is incorporated in Delaware with its principal place of business in Texas—is not subject to general personal jurisdiction in Montana. BNSF , 581 U.S. at ––––, 137 S.Ct. at 1559.

¶ 9 Specific personal jurisdiction, on the other hand, exists when the suit itself "arises from the specific circumstances set forth in Montana’s long-arm statute, M. R. Civ. P. 4(b)(1)." Buckles , ¶ 15. The exercise of specific personal jurisdiction "depends on whether the defendant’s ‘suit-related conduct’ created a substantial connection with" Montana. Tackett , ¶ 19 (quoting Walden v. Fiore , 571 U.S. 277, 284, 134 S.Ct. 1115, 1121, 188 L.Ed.2d 12 (2014) ). Therefore, a Montana court has specific personal jurisdiction over a defendant only when both the defendant and the underlying controversy are appropriately affiliated with Montana. Tackett , ¶ 19 (citing Daimler , 571 U.S. at 133, 134 S.Ct. at 758 (stating that specific personal jurisdiction focuses on the "relationship among the defendant, the forum, and the litigation") ). If a Montana court has specific personal jurisdiction over a defendant, the court may adjudicate only those particular claims against the defendant—the defendant is not subject to suit in Montana for unrelated conduct. In this case, Plaintiffs’ alleged injuries did not arise from BNSF’s activities in Montana and, therefore, Montana courts do not have specific personal jurisdiction over BNSF.

¶ 10 A court’s exercise of personal jurisdiction over a defendant, whether general or specific, is limited by the Fourteenth Amendment’s Due Process Clause. U.S. Const. amend. XIV. A defendant must have "certain minimum contacts [with Montana] such that the maintenance of the suit does not offend ‘traditional notions of fair play and substantial justice.’ " Tackett , ¶ 18 (quoting Walden , 571 U.S. at 283, 134 S.Ct. at 1121 (quoting Int’l Shoe , 326 U.S. at 316, 66 S.Ct. at 158 ) ); see also Daimler , 571 U.S. at 126, 134 S.Ct. at 754 (quoting Goodyear , 564 U.S. at 923, 131 S.Ct. at 2853 ). We generally apply a two-step test to determine whether a Montana court may exercise personal jurisdiction over a nonresident defendant. Milky Whey, Inc. v. Dairy Partners, LLC , 2015 MT 18, ¶ 18, 378 Mont. 75, 342 P.3d 13 ; Tackett , ¶ 22. First, we determine whether personal jurisdiction exists under Montana’s long-arm statute, M. R. Civ. P. 4(b)(1). Milky Whey , ¶ 18. If the first step is satisfied, we then determine whether exercising personal jurisdiction over the defendant is constitutional—whether it conforms with "the traditional notions of fair play and substantial justice embodied in the due process clause." Milky Whey , ¶ 18 (quoting Cimmaron Corp. v. Smith , 2003 MT 73, ¶ 10, 315 Mont. 1, 67 P.3d 258 ).

¶ 11 However, personal jurisdiction is an individual right and, as such, a defendant may either expressly or impliedly consent to a court’s personal jurisdiction and thereby waive his due process rights. Milanovich v. Schnibben , 2007 MT 128, ¶ 10, 337 Mont. 334, 160 P.3d 562 (citing Ins. Corp. of Ireland v. Compagnie des Bauxites de Guinee , 456 U.S. 694, 703, 102 S.Ct. 2099, 2105, 72 L.Ed.2d 492 (1982) ). Consent jurisdiction is an independent basis for jurisdiction. Therefore, our standard two-step personal jurisdiction analysis is not applicable where neither general nor specific personal jurisdiction exists under M. R. Civ. P. 4(b)(1) and a defendant allegedly consented to personal jurisdiction in Montana. The principle underlying personal jurisdiction is to ensure a defendant’s due process rights are protected—that a court’s jurisdiction over it comports with fair play and substantial justice. Int’l Shoe , 326 U.S. at 316, 66 S.Ct. at 158. Where personal jurisdiction is premised upon consent, a defendant’s due process rights are satisfied because it is just and fair to require a defendant to defend a suit in a forum to which it previously agreed. Thus, when a defendant allegedly consents to or waives personal jurisdiction, the inquiry turns on the facts and circumstances of the case and the nature and terms of the waiver, that is, whether the defendant knowingly waived its constitutional due process protections.

¶ 12 A...