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Applying the U.S. Supreme Court’s Ruling in Daimler, California Court of Appeal Rules Railroad Defendant Not Subject to Personal Jurisdiction in Asbestos Case

California Court of Appeal, March 27, 2015

Certain family members commenced a wrongful death asbestos action in Los Angeles County Superior Court, attempting to join BNSF Railway Company’s predecessor in interest as a defendant. After BNSF unsuccessfully petitioned the Superior Court to quash service of process for lack of general jurisdiction, it sought a writ of mandamus from the Court of Appeal to vacate the Superior Court order.

The Court of Appeal engaged in a detailed discussion of the U.S. Supreme Court rulings on personal jurisdiction, including the following discussion of the decision in Daimler AG v. Bauman, 134 S. Ct. 746 (2014): “In explaining its conclusion, the high court provided crucial guidance on Goodyear and the importance of ascertaining a corporation’s ‘home.’ It explained that ‘Goodyear made clear that only a limited set of affiliations with a forum will render a defendant amenable to all-purpose jurisdiction there. . . . With respect to a corporation, the place of incorporation and principal place of business are ‘paradig[m]. . . bases for general jurisdiction.’ (Id. at p. 760.) The high court clarified that ‘Goodyear did not hold that a corporation may be subject to general jurisdiction only in a forum where it is incorporated or has its principal place of business,’ but nonetheless suggested that only in an ‘exceptional case’ should one expect ‘a corporation’s operations in a forum other than its formal place of incorporation or principal place of business [to] be so substantial and of such a nature as to render the corporation at home in that State.’”

Applying these principles, the Court of Appeal concluded there was no general jurisdiction over BNSF, reasoning as follows: “Petitioner concedes that it transacts substantial business in California. The business it transacts here, however, constitutes a relatively small portion of its overall operations. It is unclear from the record before the trial court how many facilities petitioner operates here, but we know that California is home to only 8 percent of its workforce, contains only 5 percent of its track infrastructure, and accounts for only 6 percent of its revenue. ‘General jurisdiction . . . calls for an appraisal of a corporation’s activities in their entirety, nationwide and worldwide.’ (Daimler, supra, 134 S. Ct. at p. 762, fn. 20.) That appraisal here compels the conclusion that petitioner’s operations in California are not sufficient in comparison to its national operations and are not so ‘continuous and systematic’ as to render it ‘at home’ in California.”

Read the full decision here.

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