Monday, March 30, 2015
C.A. Says Railroad’s Ties to State Not Sufficient for Jurisdiction
By KENNETH OFGANG, Staff Writer
California courts may not exercise general, long-arm jurisdiction over a large, national company that does substantial business in this state but much more elsewhere, the Court of Appeal for this district ruled Friday.
Div. Four granted a writ of mandate to the BNSF Railway Company, saying the railroad—incorporated in Delaware and headquartered in Texas—doesn’t have to face trial in California over a claim that a worker died as a result of exposure to asbestos at a facility in Kansas.
The family of Peter J. Kravolovetz sued in Los Angeles Superior Court last year, alleging that Kravolovetz’s death from mesothelioma was the result of his having worked with asbestos at a dismantling facility and roundhouse in Wichita. That facility was owned by a predecessor of BNSF at the time, the complaint said.
Motion to Quash
In moving to quash service, BNSF alleged that California lacked jurisdiction because the suit did not arise from any of its California activities and because those activities are a small part of its overall operation. It said that only six percent of its sales revenue comes from this state, and a similarly small percentage of its track infrastructure and its workforce are located here, with its home state of Texas accounting for the largest share of its workforce, sales, and infrastructure.
Los Angeles Superior Court Judge Emilie Elias denied the motion to quash. Citing Daimler AG v. Bauman (2014) 134 S. Ct. 746, she said that general jurisdiction was present because BNSF has a “continuous and systematic” relationship with California that makes the company “essentially at home” here.
But Justice Audrey Collins, writing for the Court of Appeal, noted that Daimler rejected the plaintiffs’ claim that general jurisdiction existed over defendant in California because, although California was a major market for the defendant’s products, the company’s activities here were a comparatively small part of its “nationwide and worldwide” undertakings.
“A corporation that operates in many places can scarcely be deemed at home in all of them…,”the Daimler court said.
Collins elaborated that “the business petitioner conducts here is absolutely large but relatively small and, more importantly, is performed at the behest and in the service of petitioner’s principal hub in Texas.” It would hardly comport with due process to allow the plaintiffs to bring their “Kansas-rooted case” in any of the many jurisdictions where BNSF has significant sales, the jurist said.
The justice acknowledged that under Daimler, a defendant may be sued in a state where it is neither incorporated nor headquartered, in an “exceptional case.” But the uniqueness of asbestos litigation, in which many defendants located in different jurisdictions may be sued for contributing to the same indivisible injury, does not make every asbestos suit “exceptional,” she said.
“We are not unsympathetic to real parties’ concerns, which echo those Justice Sotomayor raised in her concurring opinion in Daimler….,” she wrote. “However, the due process rights of defendants cannot vary with the types of injury alleged by plaintiffs. Our analysis must focus on ‘the relationship among the defendant, the forum, and the litigation’…and that relationship here is simply not enough to render petitioner ‘at home’ in California such that the exercise of general jurisdiction over actions unrelated to petitioner’s forum activities is warranted.”
Allowing the plaintiff to sue defendant in either its headquarters state or its state of incorporation, Collins added, preserves the constitutional rights of both parties.
Attorneys on appeal were Selim Mounedji and Brock Christensen of Sims Law Firm for BNSF, and Mark Douglas Bratt, Alexandra Shef, and Stephanie M. Taylor of The Lanier Law Firm, with Sharon J. Arkin, and The Arkin Law Firm.
The case is BNSF Railway Company v. Superior Court (Kralovetz), 15 S.O.S. 1590
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