SCOTUS Interprets Federal Employers’ Liability Act


Fundamental fairness requires that before a company doing business in several states is sued in a particular state that it has substantial contacts with that state. Merely being present in that state will not satisfy the jurisdictional requirement’s of a federal law such as the Federal Employers’ Liability Act, 45 U. S. C. §51 et seq. (FELA), as the U.S. Supreme Court just ruled in a closely watched case.

On May 30, the U.S. Supreme Court decided the case of BNSF Railway Company v. Terrell, et al., reversing the Montana Supreme Court.  The Montana Supreme Court held that Montana state courts had jurisdiction over two FELA lawsuits filed by on behalf of former employees against BNSF Railway Company even though, “while doing business in Montana, [it] was not incorporated in Montana nor did it maintain its principal place of business there.”

The Supreme Court, in an 8 -1 ruling (Justice Gorsuch participated in the April 25, 2017 oral argument), rejected this interpretation of FELA:

FELA does not authorize state courts to exercise personal jurisdiction over a railroad solely on the ground that the railroad does some business in their States.

The plaintiffs did not reside in Montana nor were their injuries related to work performed in Montana and they did not work for BNSF Railway Company in Montana. Nevertheless, the Montana Supreme Court held that local Montana courts could exercise general personal jurisdiction over BNSF Railway Company pursuant to Section 56 of FELA as construed by the court, or pursuant to Montana law which can apply to persons “found within Montana.”

With regard to the Montana Supreme Court’s holding that Montana law established jurisdiction simply because BNSF Railway Company is “found within” the state, this argument raises issues as to whether such an exercise of personal jurisdiction “comports with the Due Process Clause of the Fourteenth Amendment.” The U.S. Supreme Court confirmed that such an assertion would be contrary to a number of important U.S. Supreme Court precedents.