No Jurisdiction Over Out-of-State Defendant Registered to Do Business in Missouri

By on April 19, 2017

The Missouri Supreme Court recently held that an out-of-state defendant was not subject to jurisdiction in Missouri simply because it was registered to do business in Missouri and conducted activities there similar to those in other states. This decision reinforces the Missouri judiciary’s recent trend of limiting personal jurisdiction in cases with out-of-state defendants and is consistent with decisions around the country holding that registration does not confer jurisdiction.

In State ex rel. Norfolk Southern Railroad Co. v. The Honorable Collen Dolan, 2017 Mo. LEXIS 66 (Mo. Feb. 28, 2017) the Supreme Court of Missouri dismissed Norfolk Southern Railway Company (“Norfolk”) for lack of personal jurisdiction. The plaintiff brought suit against Norfolk for injuries he sustained while employed in Indiana. Norfolk is principally located and incorporated in Virginia. Norfolk annually complies with Missouri’s foreign business registration statutes by registering with Missouri and designating a registered agent for service of process. Norfolk conducts substantial business and owns property in Missouri. However, Norfolk also operates railroad tracks and conducts substantial business in at least 22 states and its business in Missouri accounts for only 2 percent of its nationwide business activity.

The Missouri Supreme Court determined that Norfolk was subject to neither general nor specific jurisdiction. Under the governing United States Supreme Court decision, Daimler AG v. Bauman,134 S. Ct. 746, 754 (2014), a court can normally exercise general jurisdiction over a corporation only when the corporation’s place of incorporation or its principal place of business is in the forum state. Because Norfolk was not headquartered or incorporated in Missouri, the court evaluated whether Norfolk represented an “exceptional case” where the contacts are so substantial and of such a nature as to render the corporation at home in that State.

Applying Daimler, the Missouri Supreme Court explained that such an exceptional case requires comparing the corporation’s activities in the forum state with its activities in other states through “an appraisal of a corporation’s activities in their entirety, nationwide and worldwide.” Because Norfolk’s business in Missouri constitutes only 2% percent of its total revenue and Norfolk conducts substantial business in 22 other states, the court declined to exert general jurisdiction over Norfolk.

Plaintiff argued, consistent with a multitude of rulings in Missouri’s lower courts, that Norfolk’s registration as a foreign corporation in Missouri equated to its consent to personal jurisdiction in Missouri. The court rejected this argument, holding that a foreign corporation’s business registration in Missouri “does not provide an independent basis for broadening Missouri’s personal jurisdiction to include suits unrelated to the corporation’s activities in Missouri when the usual bases for general jurisdiction are not present.”

The court also rejected multiple theories advanced by plaintiff to support specific jurisdiction over Norfolk. A court has specific jurisdiction if the defendant’s acts took place in the forum state, and here, the plaintiff pleaded no facts alleging the injury arose from Norfolk’s Missouri activities. Further, the Norfolk court found the fact that Norfolk engaged in the same “type” of business in the forum state and the state where the injury occurred irrelevant. A ruling otherwise would render every national corporation subject to specific jurisdiction in every state in which it conducted business regardless of where the injury occurred.

Filed under Asbestos, Jurisdiction, Missouri

St. Louis Jurisdiction Determined As of Now, Not At Time of Exposure Decades Ago

By on February 8, 2017

A St. Louis court recently granted a defense motion to dismiss on jurisdictional grounds, which may signal an increased willingness to decline to impose jurisdiction over foreign corporations that do no currently conduct business in Missouri. The court’s analysis measured the corporation’s contacts at the present time, not at the time of exposure decades ago. This ruling is in opposition of the trend of allowing plaintiffs to forum shop in the 22nd Judicial Circuit in the City of St. Louis, which has quadrupled its asbestos-related lawsuits since 2010 and is now the fourth largest asbestos docket in the country.

In McGill v. Conwed, plaintiff allegedly sustained occupational exposure to asbestos while working as a laborer and carpenter in Kansas, Oklahoma, and Missouri from 1966 to 1976. During his deposition, plaintiff testified that his work with Conwed ceiling tiles occurred within Kansas. Conwed is not incorporated or principally located in Missouri. Conwed ceased manufacturing ceiling tiles in 1985.

As a result, Conwed moved to dismiss for lack of personal jurisdiction. Conwed argued that Missouri lacks specific jurisdiction because the claim does not arise out of any conduct within Missouri. Conwed argued that the court lacked general jurisdiction because Conwed ceased manufacturing operations in Missouri in 1985; has not conducted business in Missouri since that time; is not registered to do business in Missouri; has no subsidiary in Missouri; does not have a registered agent in Missouri; and does not own property or advertise in Missouri.

Conwed bolstered its argument with another recent St. Louis case, Smith v. Union Carbide, in which the court granted a motion to dismiss for lack of personal jurisdiction filed by DuPont, a company with greater contacts to Missouri. In that case, the claim emanated from alleged exposure to DuPont in Oklahoma, therefore defeating specific jurisdiction. While DuPont was neither incorporated nor had its principal place of business in Missouri, it had a subsidiary and registered agent in Missouri. Nonetheless, DuPont’s lack of incorporation and principal place of business in Missouri was sufficient for the court to decline to exert general personal jurisdiction.

On January 19, 2017, Judge Joan Moriarty, one of two primary asbestos judges in St. Louis, granted Conwed’s motion to dismiss. Judge Moriarty agreed that no basis existed to assert special jurisdiction because the claim against Conwed did not arise out of exposure to any Conwed product or service in Missouri. Further, Judge Moriarty declined to exert general jurisdiction over Conwed, stating that “Conwed undeniably would have been amenable to suit in Missouri prior to 1985, when it did regular and systematic business in Missouri. But now it has no business in Missouri, and has not for over 30 years.” Because Conwed did not currently have systemic, continuous, and substantial connections with Missouri, there was no general personal jurisdiction. Notably, the court reached its decision without mentioning the United States Supreme Court’s ruling in Daimler AG v. Bauman, the controlling decision on personal jurisdiction.

This ruling has positive ramifications for out-of-state defendants litigating asbestos products liability claims in St. Louis. As Judge Moriarty is one of only two asbestos judges presiding in St. Louis, it can be expected that the decision in McGill v. Conwed will result in an increase in the amount of out-of-state defendants (particularly those who are not currently registered to do business in Missouri) filing and winning personal jurisdiction motions.

Filed under Asbestos, Jurisdiction, Missouri