March 01, 2017

Missouri Supreme Court Significantly Limits Personal Jurisdiction in Nation's "Number One Judicial Hellhole"

On February 28, 2017, the Missouri Supreme Court issued an opinion significantly limiting the state’s personal jurisdiction over corporations. This limitation on statewide jurisdiction includes the courts of the City of St. Louis, which was named the Number One Judicial Hellhole in the Nation in 2016 by the American Tort Reform Foundation.

In State ex rel. Norfolk Southern Railway Co. v. Dolan, the Missouri Supreme Court held that absent either (1) incorporation of a business in Missouri, (2) establishment of a principal place of business in Missouri, or (3) contacts with Missouri that are so extensive that Missouri “in effect, becomes another home state” for a company, Missouri courts do not have general personal jurisdiction over a corporation. In Norfolk, the Court held that despite defendant Norfolk Southern Railway’s “substantial and continuous business in Missouri” its contacts with Missouri were not “so extensive and all-encompassing” that general personal jurisdiction exists.

The decision is particularly notable because Defendant Norfolk’s contacts with Missouri were substantial. According to the Court, Norfolk was registered in the state as a foreign corporation, owns or operates 400 miles of train track in Missouri, employs 590 people in the state and generates $232 million in revenue in the state. In Norfolk’s favor, only about 2 percent of its business is conducted in Missouri.

The Missouri Supreme court relied primarily on the U.S. Supreme Court’s 2014 decision in Daimler AG v. Bauman. The defense bar, including Faegre Baker Daniels, has been working to apply Bauman to limit general personal jurisdiction in states around the country. This decision in Missouri is important not just for the immediate impact on the significant forum shopping that occurs in Missouri, but as persuasive authority in courts around the country.

The Norfolk decision comes just as the Missouri state legislature is seriously considering legislation that would limit personal jurisdiction in Missouri and limit the current expansive interpretation of its venue laws. This legislation will still be important in codifying the state Supreme Court’s decision and reining in the venue law in order to prevent in-state forum shopping.

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