Norfolk Southern Ry. Co. v. Maynard, 21811

• Decision Date: 28 October 1993
• Docket Number: No. 21811,21811
• Citation: 437 S.E.2d 277,190 W.Va. 113
• Parties: NORFOLK SOUTHERN RAILWAY COMPANY, Petitioner, v. Honorable Elliott E. MAYNARD, Judge of the Circuit Court of Mingo County and Junior Garrett, Respondents.
• Court: West Virginia Supreme Court

Page 277

437 S.E.2d 277

190 W.Va. 113

NORFOLK SOUTHERN RAILWAY COMPANY, Petitioner, v. Honorable Elliott E. MAYNARD, Judge of the Circuit Court of Mingo County and Junior Garrett, Respondents.

No. 21811.

Supreme Court of Appeals of West Virginia.

Submitted Sept. 14, 1993.

Decided Oct. 28, 1993.

Fred Adkins and Angela Wynn Konrad, Huddleston, Bolen, Beatty Porter & Copen, Huntington, for petitioner.

David Lycan, Lycan & Pratt, Wayne, and Gregory M. Tobin, Pratt, Bradford & Tobin, East Alton, for Junior Garrett.

Syllabus by the Court

1. " 'The standard of jurisdictional due process is that a foreign corporation must have such minimum contacts with the state of the forum that the maintenance of an action in the forum does not offend traditional notions of fair play and substantial justice.' Syllabus Point 1, Hodge v. Sands Manufacturing Company, 151 W.Va. 133, 150 S.E.2d 793 (1966)." Syllabus Point 1, Hill by Hill v. Showa Denko, K.K., 188 W.Va. 654, 425 S.E.2d 609 (1992) cert. denied, 508 U.S. 908, 113 S.Ct. 2338, 124 L.Ed.2d 249 (1993).

2. A parent-subsidiary relationship between corporations, one of which is "doing business" in West Virginia, does not without the showing of additional factors subject the nonresident corporation to this state's jurisdiction. However, if the parent and its subsidiary operate as one entity, their formal separate corporate structures will not prevent the assertion of jurisdiction over the non-resident corporation. The extent of control exercised by the non-resident corporation over the corporation doing business in this state determines whether the non-resident corporation is subject to this state's jurisdiction.

3. When a parent-subsidiary relationship exists between corporations, either the parent or the subsidiary may be the agent of the other related corporation for the purpose of service of process. Although there is no precise test to determine how much control a parent corporation must exert over its domestic subsidiary before one corporation will be deemed an agent of the other for the purpose of service of process, each case will be considered on its facts to determine if more than a parent-subsidiary relationship exists.

NEELY, Justice:

The central issues presented in this appeal are whether the Norfolk Southern Railway Company ¹ has sufficient contacts with this state for the Circuit Court of Mingo County to acquire in personam jurisdiction over it and whether the service of process was defective. A knowledge of the corporate players is necessary because jurisdiction is based on Norfolk Southern Railway's relationship with its wholly owned subsidiary, Norfolk and Western Railway Co., which does business in this state, and service of process was made on an employee of Norfolk Southern Corporation, the parent of Norfolk Southern Railway. ²

NOTE: OPINION CONTAINS TABLE OR OTHER DATA THAT IS NOT VIEWABLE

Specifically, Norfolk Southern Railway seeks to vacate an order entered by Judge Elliott E. Maynard, dated 18 May 1993 that denied its motion to dismiss a complaint filed against it by Junior Garrett for lack of in personam jurisdiction, defective service of process and improper venue. Because no record was made concerning the issue of Norfolk Southern Railway's activities in West Virginia, we find no basis for issuing a writ of prohibition as requested; however, we do grant a writ as moulded requiring the circuit court to conduct a hearing to determine (1) whether Norfolk Southern Railway has sufficient minimum contacts with West Virginia that the maintenance of the underlying action does not offend traditional notions of fair play and substantial justice, and (2) whether the service of process was defective.

Mr. Garrett, a resident of Robbins, Tennessee, filed this action in the Circuit Court of Mingo County against his employer, Norfolk Southern Railway Company, under the Federal Employers' Liability Act (FELA), 45 U.S.C. § 51 et seq. Mr. Garrett alleges that on 15 January 1990, he became permanently injured when he lifted a tie while working for Norfolk Southern Railway in Morgan County, Tennessee.

Norfolk Southern Railway alleges that it does not do business in West Virginia because it employs no one, has no registered agent for service of process and maintains no station, no office and no track in this state. Norfolk Southern Railway is a Virginia corporation with its principal office located in Norfolk, Virginia. Norfolk Southern Railway asserts that it is an independent and distinct corporation from its wholly owned subsidiary, the Norfolk and Western Railway Company, which does do business in West Virginia. Norfolk Southern Railway is, in turn, a wholly owned subsidiary of Norfolk Southern Corporation. In order to demonstrate that Norfolk Southern Railway is a distinct corporation operated separately from Norfolk and Western, Norfolk Southern Railway submitted: (1) several affidavits that outlined the corporations' relationships and identified Norfolk Southern Railway as Mr. Garrett's employer; and, (2) part of a 1972 agreement between Norfolk Southern Railway's predecessor and the Brotherhood of Maintenance of Way Employees, Mr. Garrett's labor union, allegedly showing that none of the routes on which Mr. Garrett had seniority transverse West Virginia. Norfolk Southern Railway also asserts that the service of process was defective because service was not made on its agent, but on an employee of its parent, Norfolk Southern Corporation.

Mr. Garrett alleges that Norfolk Southern Railway has minimum contacts with West Virginia because it solicits business here and because it and its subsidiary, Norfolk and Western, operate as one entity. ³ In support of his allegations, Mr. Garrett submitted part of an article apparently from The Official Railway Guide, May/June 1992, listing six persons in West Virginia among Norfolk Southern Railway's personnel and a map showing that Norfolk Southern Railway's tracks extend into the southern and western parts of this state. ⁴ Mr. Garrett also alleges that Norfolk Southern Railway waived its objections by not limiting its appearance to the question of jurisdiction and by proceeding with discovery.

I

In each case the reasonableness of a state's exercise of jurisdiction over a nonresident foreign corporation must focus on a qualitative analysis of the foreign corporation's contacts with the forum state. Shaffer v. Heitner, 433 U.S. 186, 97 S.Ct. 2569, 53 L.Ed.2d 683 (1977). The determination of personal jurisdiction stands or falls on each case's unique facts and precludes the use of "mechanical tests" and "talismanic jurisdictional formulas." Burger King Corp. v. Rudzewicz, 471 U.S. 462, 478, 485, 105 S.Ct. 2174, 2185, 2189, 85 L.Ed.2d 528 (1985).

The Supreme Court in International Shoe Co. v. Washington, 326 U.S. 310, 66 S.Ct. 154, 90 L.Ed. 95 (1945), delineated the following elements as necessary for a state to acquire jurisdiction over a nonresident defendant:

[I]n order to subject a defendant to a judgment in personam, if he be not present within the territory of the forum, he [must] have certain minimum contacts with it such that the maintenance of the suit does not offend "traditional notions of fair play and substantial justice."

International Shoe at 316, 66 S.Ct. at 158. Recently, in Syl. Pt. 1, Hill by Hill v. Showa Denko, K.K., 188 W.Va. 654, 425 S.E.2d 609 (1992) cert. denied, 508 U.S. 908, 113 S.Ct. 2338, 124 L.Ed.2d 249 (1993) (holding that personal jurisdiction can be "premised on the placement of a product into the stream of commerce"), this Court repeated our standard for jurisdictional due process:

"The standard of jurisdictional due process is that a foreign corporation must have such minimum contacts with the state of the forum that the maintenance of an action in the forum does not offend traditional notions of fair play and substantial justice." Syllabus Point 1, Hodge v. Sands Manufacturing Company, 151 W.Va. 133, 150 S.E.2d 793 (1966).

The critical element for determining minimum contacts is not the volume of the activity but rather "the quality and nature of the activity in relation to the fair and orderly administration of the laws." International Shoe at 319, 66 S.Ct. at 160. Indeed "the foreseeability that is critical to due process analysis ... is that the defendant's conduct and connection with the forum State are such that he should reasonably anticipate being haled into court there." World-Wide Volkswagen Corp. v. Woodson, 444 U.S. 286, 297, 100 S.Ct. 559, 567, 62 L.Ed.2d 490 (1980), quoted in Hill by Hill, supra, 188 W.Va. at 657, 425 S.E.2d at 612. The Supreme Court in World-Wide Volkswagen set the limits necessary to establish reasonable contacts:

The relationship between the defendant and the forum must be such that it is "reasonable ... to require the corporation to defend the particular suit which is brought there." (Citations omitted.) Implicit in this emphasis on reasonableness is the understanding that the burden on the defendant, while always a primary concern, will in an appropriate case be considered in light of other relevant factors, including the forum State's interest in adjudicating the dispute, see McGee v. International Life Ins. Co., 355 U.S. 220, 223, [78 S.Ct. 199, 201, 2 L.Ed.2d 223] (1957); the plaintiff's interest in obtaining convenient and effective relief, see Kulko v. California Superior Court, supra, [436 U.S. 84] at 92 [98 S.Ct. 1690, [at 1696-97] 56 L.Ed.2d 132 (1978) ], at least when that interest is not adequately protected by the plaintiff's power to choose the forum, cf. Shaffer v. Heitner, 433 U.S. 186, 211 n. 37, [97 S.Ct. 2569, 2583 n. 37, 53 L.Ed.2d 683] (1977); the interstate judicial system's interest in obtaining the most efficient resolution of controversies; and the shared interest of the several States in furthering fundamental substantive social policies, see Kulko v. California Superior Court, supra, [436 U.S.] at 93, 98 ....