Lanham v. BNSF Ry. Co.

• Decision Date: 28 February 2020
• Docket Number: No. S-19-114.,S-19-114.
• Parties: Alexander LANHAM, appellant and cross-appellee, v. BNSF RAILWAY COMPANY, appellee and cross-appellant.
• Court: Nebraska Supreme Court

305 Neb. 124

939 N.W.2d 363

Alexander LANHAM, appellant and cross-appellee,

v.BNSF RAILWAY COMPANY, appellee and cross-appellant.

No. S-19-114.

Supreme Court of Nebraska.

Filed February 28, 2020

Corey L. Stull, Lincoln, and Jeanette Stull, of Atwood, Holsten, Brown, Deaver & Spier, P.C., L.L.O, and Christopher H. Leach, of Hubbell Law Firm, L.L.C., for appellant.

Nichole S. Bogen, Lincoln, of Lamson, Dugan & Murray, L.L.P., Wayne L. Robbins, Jr., of Robbins Travis, P.L.L.C., and Andrew S. Tulemello, of Gibson, Dunn & Crutcher, L.L.P., for appellee.

Heavican, C.J., Miller-Lerman, Cassel, Stacy, Funke, Papik, and Freudenberg, JJ.

Heavican, C.J.

INTRODUCTION

This is an appeal from a negligence action under the Federal Employers’ Liability Act (FELA).¹ Appellant, Alexander Lanham, appeals the order of the district court for Lancaster County, Nebraska, granting summary judgment in favor of appellee, BNSF Railway Company (BNSF). BNSF cross-appeals, arguing the district court erred in holding that it had personal jurisdiction over BNSF. We reverse the district court’s order overruling BNSF’s motion to dismiss for lack of jurisdiction.

BACKGROUND

On January 16, 2014, Lanham was seriously injured while working for his employer, BNSF, on a section of train tracks near Houston, Texas. Lanham generally worked for BNSF as a track laborer on a rail production "gang" in Iowa, Nebraska, and Minnesota. Rail production gangs work to repair and replace rail on train tracks. Lanham’s regular gang "shut down" during the winter months. To avoid a layoff during the winter of 2013, Lanham bid for a position replacing railroad ties in Texas, with the intent to return to his regular rail gang position when it opened back up in March. Lanham was working on a section of train tracks in Texas when he hit his foot with a sledge hammer and sustained injuries as a result.

Lanham filed a complaint in the district court under FELA, alleging BNSF was negligent in failing to provide him with a reasonably safe place to work, reasonably safe equipment for work, and reasonably safe methods for work. Lanham further alleged that his injuries were a result of BNSF’s negligence.

At the time Lanham’s complaint was filed, he was a resident of Dorchester, Nebraska. BNSF is a Delaware corporation with its principal place of business in Fort Worth, Texas. BNSF currently operates railroads in 28 states, including Nebraska. Pursuant to Neb. Rev. Stat. § 21-19,152 (Reissue 2012), BNSF registered with the Secretary of State to do business in Nebraska and designated an agent for service of process in the state.

BNSF filed a motion to dismiss the complaint on the grounds that the district court had neither general nor specific jurisdiction over BNSF. Citing a U.S. Supreme Court case decided in 2014,² BNSF argued the district court lacked general jurisdiction because BNSF was incorporated in Delaware and has its principal place of business in Fort Worth; thus, BNSF is not " ‘at home’ " in Nebraska. BNSF also argued that the district court lacked specific jurisdiction over BNSF because Lanham’s injuries had occurred in Texas, and the complaint failed to allege any connection between those injuries and Nebraska, or BNSF’s activities in Nebraska.

The district court overruled the motion to dismiss after finding that BNSF consented to personal jurisdiction by registering to do business in Nebraska under § 21-19,152. In its order, the district court extensively relied on the holding of the U.S. District Court for the District of Nebraska in Consolidated Infrastructure Group, Inc. v. USIC, LLC.³ Consolidated Infrastructure Group, Inc. is an unpublished opinion in which the court concluded that under Nebraska law, " ‘[b]y designating an agent upon whom process may be served within this state, a defendant has consented to the jurisdiction in personam by the proper court’ "⁴ based on this court’s prior holding in Mittelstadt v. Rouzer .⁵

Because the district court found that BNSF had consented to personal jurisdiction, the court did not engage in an analysis of BNSF’s minimum contacts in the state. However, it quoted Consolidated Infrasructure Group, Inc.⁶ and noted that BNSF’s " ‘activities in this state are not the sort of random or attenuated conduct that has been insufficient to confer jurisdiction on the court.’ "

BNSF subsequently filed a motion for summary judgment on the grounds that the district court lacked personal jurisdiction over BNSF and, alternatively, that Lanham was unable to present any evidence of BNSF’s negligence. The district court overruled the motion on the issue of jurisdiction and sustained it on the issue of negligence.

Lanham appeals the district court’s order granting summary judgment in favor of BNSF. BNSF filed a cross-appeal, arguing that the district court erred in holding it had personal jurisdiction over BNSF.

ASSIGNMENTS OF ERROR

Lanham’s sole assignment of error is that the district court erred in granting summary judgment in favor of BNSF. In its cross-appeal, BNSF assigns, restated, that the district court erred in holding BNSF’s registration to do business in the State of Nebraska constituted consent to personal jurisdiction.

STANDARD OF REVIEW

When a jurisdictional question does not involve a factual dispute, determination of a jurisdictional issue is a matter of law which requires an appellate court to reach a conclusion independent from the trial court’s.⁷

ANALYSIS

BNSF argues that Nebraska law does not provide for consent by registration and that even if Nebraska’s registration statute could be construed to extract consent to personal jurisdiction, such an exercise of general jurisdiction would violate the Due Process Clause of the U.S. Constitution. Because we believe this issue is dispositive, we will discuss it first.

Personal jurisdiction is the power of a tribunal to subject and bind a particular person or entity to its decisions.⁸

This power is limited by the 14th Amendment’s Due Process Clause because " ‘[a] state court’s assertion of jurisdiction exposes defendants to the State’s coercive power.’ "⁹ The Due Process Clause protects an individual’s liberty interest in not being subject to the binding judgments of a forum with which he or she has established no meaningful contacts, ties, or relations.¹⁰

A two-step analysis is used to determine whether a Nebraska court may validly exercise personal jurisdiction over an out-of-state defendant.¹¹ First, a court must consider whether Nebraska’s long-arm statute authorizes the exercise of personal jurisdiction over the defendant.¹² Second, a court must consider whether the exercise of personal jurisdiction over the defendant comports with due process.¹³

Nebraska’s long-arm statute, Neb. Rev. Stat. § 25-536 (Reissue 2016), extends Nebraska’s jurisdiction over nonresidents having any contact with or maintaining any relation to this state as far as the U.S. Constitution permits.¹⁴ Thus, we need only look to the Due Process Clause when determining personal jurisdiction.¹⁵

Generally, this analysis requires a determination of whether the defendant’s minimum contacts with the forum state are such that the defendant should reasonably anticipate being haled into court there.¹⁶ However, this analysis is not required when the parties have consented to the exercise of personal jurisdiction.¹⁷ "Because the requirement of personal jurisdiction represents first of all an individual right, it can, like other such rights, be waived."¹⁸ In order to be valid, the waiver "must, at the very least, be clear."¹⁹

Consent by Registration.

In concluding that BNSF had consented to jurisdiction in Nebraska, the district court relied on this court’s prior holding in Mittelstadt ,²⁰ where we appear to have held that a corporation’s appointment of an agent for service constitutes implied consent to general jurisdiction in the state.²¹ In that case, Nebraska residents sued an Arkansas corporation for damages arising out of an automobile accident that occurred in Arizona, and the defendant corporation had no contacts with Nebraska other than its trucks’ limited use of the highways.²² We held that by appointing a resident agent for service as required by the federal Motor Carrier Act, the "nonresident corporation ha[d] consented to jurisdiction within this state at least as to any cause of action arising out of its activities as a motor carrier in interstate commerce."²³

The reasoning in Mittelstadt reflects the 19th century’s traditional view of personal jurisdiction, where personal jurisdiction could be obtained over a nonresident by personal service in the state.²⁴ Under the rigid territorial approach espoused in the U.S. Supreme Court case of Pennoyer v. Neff ,²⁵ state courts could only exercise personal jurisdiction over a defendant that was physically present within the state’s borders because a tribunal’s jurisdiction was limited to the territorial limits of the state in which it was established. A natural person was deemed to be physically present in a state and subject to personal jurisdiction if he or she could be served with process in the state.²⁶ However, because a corporation was only deemed to be physically present in its state of incorporation, courts lacked authority to exercise personal jurisdiction over out-of-state corporations.²⁷

With the rise of interstate commerce, many states began "assimilating corporations to natural persons"²⁸ and enacted statutes requiring foreign corporations to appoint an instate agent for service of process when seeking to do business in the state.²⁹ Based on this "purely fictional" doctrine of "consent and presence," courts permitted substituted service on a foreign corporation’s registered instate agent.³⁰ In 1917 and 1939, the U.S. Supreme Court endorsed this procedure in Penna. Fire Ins. Co. v. Gold Issue Mining Co.³¹ and Neirbo Co. v. Bethlehem Corp.³² Mittelstadt was decided in 1982.³³ At that time, many other states had similarly held that a foreign...