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Supreme Court Restricts Lawsuits Against Companies

Supreme Court Restricts Lawsuits Against Companies

In May of 2017, the U.S. Supreme Court placed location limits on injury lawsuits, effectively limiting the locations where companies can be sued. In many respects, this is a victory for corporations and a loss for the ability of plaintiffs to bring legal claims in state courts that have laws that favor plaintiffs in injury lawsuits.

What follows are the facts of this influential case and the legal takeaway points to keep in mind for personal injury law.

BNSF Railway Co. v. Tyrrell

The plaintiffs in this case sued a Texas-based railway company for separate and unrelated injuries. One plaintiff was injured on the job in Washington state, and the other plaintiff was injured in Iowa, Minnesota and South Dakota. Both plaintiffs sued according to the Federal Employers’ Liability Act, which is a federal statute enacted in 1908 that permits railroad employees to sue their employer for compensation if they are injured at work.

The Washington plaintiff alleged a slip-and-fall accident caused his injuries, whereas the other plaintiff alleged that her husband developed kidney cancer after being exposed to carcinogenic chemicals while working on the job in the three aforementioned states.

Both plaintiffs sued in Montana, the state where the railway company does most of its business. Traditionally, this has not been a problem since plaintiffs have typically been able to file suit against a company where they do a significant amount of business, are based or incorporated. Using this traditional reasoning, the lower court allowed the plaintiffs to sue the company in Montana.

The Supreme Court reversed the lower court’s ruling in an 8-1 decision, holding that state courts do not have jurisdiction to hear a plaintiff’s claims against companies if the company is not based in the state or the injuries did not occur in the state where the plaintiffs file suit.

Legal Significance of the Supreme Court’s Decision

With this case, it seems clear the Supreme Court is determined to put an end to so-called “forum shopping”, where plaintiffs try to find the most friendly court for their injury lawsuit. In light of this decision, it appears that corporations emerge as clear winners from this case.

Corporations in opposition to a plaintiff’s forum shopping will likely be able to prevent a plaintiff from filing suit in a state if the injuries did not occur there and the corporation does not do a significant amount of business in that state.

Justice Sotomayor was the lone dissenter, and she worries that corporations will no longer be subject to general jurisdiction anywhere “other than their principal places of business or incorporation.” It remains to be seen whether Justice Sotomayor will be proven correct in the years ahead, but in the interim it seems that plaintiffs have had their lawsuit location options narrowed significantly in the aftermath of this important Supreme Court decision.

If you are concerned about how this Supreme Court case could affect your lawsuit, contact a personal injury lawyer relies on today.