The Supreme Court of Missouri recently restricted the extent to which Missouri courts have general personal jurisdiction over corporations. Plaintiffs can no generally longer use Missouri courts to sue out-of-state companies that operate significant portions of their business in Missouri for suits unrelated to Missouri (albeit relatively small portion in relation to their overall operations) even if they have registered agent in Missouri. A copy of the Missouri Supreme Court’s decision in State ex rel. Norfolk Southern Railway Company v. Dolan can be found here.
The plaintiff sued Norfolk Southern Railway Company, a Virginia corporation, in St. Louis County, Missouri. The plaintiff was an Indiana resident, seeking recovery for a personal injury that occurred in Indiana. The action was unrelated to Missouri, but the plaintiff argued, among other things, that: (1) Norfolk Southern’s substantial and continuous contacts in Missouri were sufficient to establish general personal jurisdiction; and (2) Norfolk Southern consented to personal jurisdiction by complying with Missouri’s foreign corporation registration statutes. The Court soundly rejected the plaintiff’s arguments in the 6-0 decision.
In Daimler AG v. Bauman, 134 S. Ct. 746 (2014), the U.S. Supreme Court clarified that under the Due Process Clause a state may only exercise general jurisdiction (personal jurisdiction over a defendant for actions unrelated to the defendant’s activities in the state) over a corporate defendant in three situations: (1) when the corporation is incorporated in that state; (2) when the corporation’s principal place of business is in that state; or (3) in exceptional circumstances, when the corporation’s activities are “so substantial and of such a nature as to render the corporation at home in that State.” To determine whether a corporation is “essentially at home,” the court must appraise the corporation’s nationwide and worldwide activities and determine how the forum activities compare. Continuous and systematic business activities in a state are not enough for general personal jurisdiction when those activities only comprise a small portion of the defendant’s business overall.
Following Daimler, the Missouri Supreme Court found that Norfolk Southern’s $232 million in Missouri revenue, 590 Missouri employees, and 400 miles of Missouri railroad tracks were not enough to establish general jurisdiction in Missouri. The Court noted that despite these substantial operations, Norfolk Southern’s Missouri business only accounts for approximately 2 percent of its employees, 2 percent of its revenue, and 2 percent of the tracks it owns or operates. Norfolk Southern had more substantial operations in several other states, so it could not reasonably be considered “at home” in Missouri.
The court rejected plaintiff’s argument that Norfolk Southern consented to personal jurisdiction over any case filed against it in Missouri when it complied with Missouri’s foreign corporation registration statutes to do business in the state of Missouri and appointed a registered agent for service of process. The court stated that a “broad inference of consent based on registration would allow national corporations to be sued in every state, rendering Daimler pointless.” The court concluded that merely registering in a state does not open a corporation to lawsuits unrelated to that state.