ALEXANDER LANHAM, APPELLANT AND CROSS-APPELLEE, V. BNSF RAILWAY COMPANY, APPELLEE AND CROSS-APPELLANT.
No. S-19-114
Nebraska Supreme Court
February 28, 2020
305
- Judgments: Jurisdiction: Appeal and Error. Whеn 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.
- Constitutional Law: Due Process: Jurisdiction: Words and Phrases. Personal jurisdiction is the power of a tribunal
to subject and bind a particular person or entity to its decisions. 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. - Constitutional Law: Due Process. 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.
- Constitutional Law: Jurisdiction: Statutes: Due Process: States. A two-step analysis is used to determine whether a Nebraska court may validly exercise personal jurisdiсtion over an out-of-state defendant. First, a court must consider whether Nebraska‘s long-arm statute authorizes the exercise of personal jurisdiction over the defendant. Second, a court must consider whether the exercise of personal jurisdiction over the defendant comports with due process.
- Constitutional Law: Due Process: Jurisdiction: States: Appeal and Error. Nebraska‘s long-arm statute,
Neb. Rev. Stat. § 25-536 (Reissue 2016), extends Nebraska‘s jurisdiction over nоnresidents having any contact with or maintaining any relation to this state as far as the U.S. Constitution permits. Thus, an appellate court needs only to look to the Due Process Clause when determining personal jurisdiction. - Due Process: Jurisdiction: States. Generally, the analysis of whether a court has personal jurisdiction over a defendant requires a determination of whether the defendant‘s minimum contacts with the forum state are such that the defendant should rеasonably anticipate being haled into court there. However, this analysis is not required when the parties have consented to the exercise of personal jurisdiction.
- Jurisdiction: Waiver. Because the requirement of personal jurisdiction represents first of all an individual right, it can, like other such rights, be waived.
- _____: _____. In order to be valid, the waiver of the requirement of personal jurisdiction must, at the very least, be clear.
- Due Process: Jurisdiction: Corporations. The Due Process Clаuse precludes a state from exercising general jurisdiction over a corporation that is not at home in the forum.
- Jurisdiction: States: Corporations. Absent exceptional circumstances, a corporation is only at home in two places: the state in which it is incorporated and the state in which its principal place of business is located.
- Jurisdiction: Corporations. A corporation‘s registration under
Neb. Rev. Stat. § 21-19,152 (Reissue 2012) does not provide an independent basis for the exercise of general jurisdiction.
Appeal from the District Court for Lancaster County: ROBERT R. OTTE, Judge. Reversed.
Corey L. Stull 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, 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, С.Ј.
INTRODUCTION
This is an appeal from a
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 produсtion “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 аnd 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 corporatiоn with its principal place of business in Fort Worth, Texas. BNSF currently operates railroads in 28 states, including Nebraska. Pursuant to
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 activitiеs 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
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 jurisdictiоn 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 еrred 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
[1] 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.
[2,3] 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
[4] A two-step analysis is used to determine whether a Nebraska court may validly exercise pеrsonal 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
[5] Nebraska‘s long-arm statute,
[6-8] 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 pеrsonal 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 cоnstitutes 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
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 corporation‘s authorization of an agent to accept service of prоcess within a state constitutes consent to personal jurisdiction in the state.34 Since that time, the U.S. Supreme Court‘s jurisprudence regarding the scope of general jurisdiction permitted by the Due Process Clause has resulted in a tremendous shift.
In 2011 and 2014, the U.S. Supreme Court set significantly narrower due process limits on the states’ exercise of general jurisdiction over out-of-state corporations. The Court abandoned the tеrritorial approach of Pennoyer,35 and the central focus became the “‘relationship among the defendant, the forum, and the litigation.‘”36
[9,10] In Daimler AG v. Bauman,39 the Court made clear that the Due Process Clause precludes a state from exercising general jurisdiction over a corporation that is not “at home in the forum.” The Court clarified that absent exceptional circumstancеs, a corporation is only at home in two places: the state in which it is incorporated and the state in which its principal place of business is located.40 The Court rejected the argument that a foreign corporation‘s “continuous and systematic” business activities in a state are sufficient for the exercise of general jurisdiction as being inconsistent with due process.41 The Court stated that this type of “global reach” was “unacceptably grasping” and “exorbitant.”42 The Court also warned that cases “decided in the era dominated by Pennoyer‘s territorial thinking . . . should not attract heavy reliance today.”43
In the present case, the district court concluded BNSF had consented to jurisdiction based solely on its compliance with
Section 21-19,152 provides:
Each foreign corporation authorized to transact business in this state must continuously maintain in this state:
(1) A registered оffice with the same address as that of its current registered agent. A post office box number may be provided in addition to the street address of the registered agent; and (2) A registered agent, who may be:
(i) An individual who resides in this state and whose office is identical with the registered office;
(ii) A domestic business or nonprofit corporation whose office is identical with the registered office; or
(iii) A foreign business or nonprofit corрoration authorized to transact business in this state whose office is identical with the registered office.
Section 21-19,152 does not explicitly state that compliance with the statute constitutes a waiver of the foreign corporation‘s right to require personal jurisdiction. Therefore, BNSF could not be said to have expressly consented to jurisdiction by merely complying with the statute. Lanham asserts that a corporаtion‘s consent may be implied when
We conclude that treating BNSF‘s registration to do business in Nebraska as implied consent to personal jurisdiction would exceed the due process limits prescribed in Goodyear Dunlop Tires Operations, S. A.44 and Daimler AG.45 Currently, every state requires a foreign corporation “doing business in the state to register . . . and appoint an agent for service of process.”46 Consequently, consent by registration would permit a corporation tо be subject to general jurisdiction in every state in which it does business. This is the same type of “global reach” jurisdiction the U.S. Supreme Court expressly rejected as being inconsistent with due process.47 The Second Circuit Court of Appeals has observed:
If mere registration and the accompanying appointment of an in-state agent—without an express consent to general jurisdiction—nonetheless sufficed to confer general jurisdiction by implicit consent, every corрoration would be subject to general jurisdiction in every state in which it registered, and Daimler‘s ruling would be robbed of meaning by a back-door thief.48
[11] Since Daimler AG was decided, the vast majority of state and federal courts have rejected consent by registration as being irreconcilable with Goodyear Dunlop Tires Operations, S. A. and Daimler AG.49 In light of the due process limits prescribed in Goodyear Dunlop Tires Operations, S. A. and Daimler AG, we join the majority of jurisdictions and hold that a corporation‘s registration under
“At Home” for Purposes of General Jurisdiction.
During oral argument, Lanham asserted that while BNSF is neither incorporated in nor maintains its principal place of business in Nebraska, exceptional circumstances exist making BNSF “at home” in the state. Lanham contends the fact that BNSF owns approximately $108 million of property in Nebraska, maintains 11 percent of its workforce in Nebraska, is the second highest tax payer in Nebraska, and has stated that Nebraska is one of the most important states in which it operates, suffices to make BNSF “at home” in the state for purposes of general jurisdiction. However, the U.S. Supreme Court rejected a similar argument in BNSF Ry. Co. v. Tyrrell.51
In Tyrrell, the Court held that notwithstanding BNSF‘s over 2,000 miles of railroad tracks and more than 2,000 employeеs in Montana, BNSF was not subject to general jurisdiction in Montana because BNSF is not incorporated in Montana, did not maintain its principal place of business in Montana, and was not “so heavily engaged in activity in Montana ‘as to render [it] essentially at home’ in that State.”52 The Court articulated that “‘the general jurisdiction inquiry does not focus solely on the magnitude of the defendant‘s in-state contacts.‘”53 Instead, the Court explаined, “‘the inquiry calls for an appraisal of a corporation‘s activities in their entirety‘; ‘[a] corporation that operates in many places can scarcely be deemed at home in all of them.‘”54
Clarifying the “exceptional case,” the Tyrrell Court recognized Perkins v. Benguet Mining Co.,55 as an example of a case in which a corporation was “at home” in a forum other that its state of incorporation or principal place of business.56 In Perkins, the defendant corpоration was incorporated under the laws of the Philippines, where it operated gold and silver mines.57 During the Japanese occupation of the Philippines in World War II, the corporation ceased its mining operations and the corporation‘s president moved to Ohio, “where he kept an office, maintained the company‘s files, and oversaw the company‘s activities.”58 The Daimler AG Court stated that the Perkins Court concluded that thе corporation was subject to personal jurisdiction in Ohio because Ohio had become “‘the corporation‘s principal, if temporary, place of business.‘”59
In the present case, BNSF is not incorporated in Nebraska, nor does it maintain its principal place of business in Nebraska. BNSF is incorporated in Delaware, and it is undisputed that BNSF‘s principal place of business is in Fort Worth. All of BNSF‘s principal officers and managing departments are located in Texas, along with its central network operations center, which monitors BNSF‘s network operations and dispatches trains. BNSF‘s interstate rail system includes 32,500
BNSF‘s business in Nebraska, although significant, is not “so ‘continuous and systematic’ as to render [it] essentially at home”60 in the state. Consequently, BNSF‘s business activities in Nebraska do not permit the exercise of general jurisdiction over BNSF for claims that are unrelated to BNSF‘s activity occurring in the state. We hold that BNSF is not “at home” in Nebraska for purposes of general jurisdiction.
CONCLUSION
We conclude that thе district court erred in determining it could exercise personal jurisdiction over BNSF for claims that are unrelated to BNSF‘s instate activity. Because of this determination, we do not reach Lanham‘s assignment of error. The district court‘s order overruling BNSF‘s motion to dismiss for lack of jurisdiction is reversed.
REVERSED.
