Ruth Bader Ginsburg.
(Photo: Diego M. Radzinschi/NLJ.)

For the second time this month, the U.S. Supreme Court ruled in favor of nationwide corporations that are seeking to limit the number of jurisdictions where they can be sued.

Ruling in BNSF Railway v. Tyrrell, the court said Monday that “the Fourteenth Amendment's due process clause does not permit a state to hale an out-of-state corporation before its courts when the corporation is not 'at home' in the state and the episode-in-suit occurred elsewhere.” New Justice Neil Gorsuch, who participated in the April 25 argument in the case, voted with the majority – the first full opinion in which he voted.

In a partial dissent, Justice Sonia Sotomayor said the 8-1 majority gave “a jurisdictional windfall to large multistate or multinational corporations that operate across many jurisdictions. Under its reasoning, it is virtually inconceivable that such corporations will ever be subject to general jurisdiction in any location other than their principal places of business or of incorporation.”

The ruling came on the heels of TC Heartland v. Kraft Foods Group Brands, a May 22 decision that limited patent infringement lawsuits primarily to the state of the defendant's incorporation, though it appeared to also allow suits to be brought where “the defendant has committed acts of infringement and has a regular and established place of business.”

The two decisions may foreshadow the outcome of the third closely watched jurisdiction case still pending: Bristol-Myers Squibb v. Superior Court of California, which challenges a California Superior Court ruling that allowed a lawsuit brought by injured users of Plavix from several states – even though some of the plaintiffs had little or no connection to California.

The flurry of jurisdiction cases before the high court stems in part from varied state court interpretations of Daimler Chrysler v. Bauman, the 2014 decision that narrowed jurisdiction to states in which the defendant company is incorporated or its headquarters are located. The U.S. Chamber of Commerce, among other business groups, have highlighted the problem in briefs filed with the court. “Businesses want predictability, they want certainty,” said Andrew Pincus of Mayer Brown, author of several of the chamber's briefs.

In the case decided Monday BNSF Railway Co., incorporated in Delaware and headquartered in Texas, challenged suits brought by two workers filed in Montana courts for injuries suffered elsewhere. Justice Ruth Bader Ginsburg, writing for the majority, said neither of the two injured workers “appears ever to have worked for BNSF in Montana.”

The jurisdiction dispute was based on the Federal Employers Liability Act, which appeared to allow rail workers to sue wherever the rail company does business. Julie Murray of Public Citizen Litigation Group, who represented the employees, said that in writing the law, Congress wanted “the dice loaded in their favor.”

But the high court said the federal law did not address personal jurisdiction. Ginsburg wrote, “The business BNSF does in Montana is sufficient to subject the railroad to specific personal jurisdiction in that state on claims related to the business it does in Montana. But instate business … does not suffice to permit the assertion of general jurisdiction over claims like [the plaintiffs] that are unrelated to any activity occurring in Montana.”

The BSNF ruling was a win for its attorney, Andrew Tulumello, co-partner-in-charge at the Washington office of Gibson, Dunn & Crutcher.