General Jurisdiction — Continuous and Systematic Affiliation

BNSF Railway Company v. Superior Court (Second District, March 27, 2015) 235 Cal.App.4th 591, 185 Cal.Rptr.3d 391, 15 Cal. Daily Op. Serv. 3088, 2015 Daily Journal D.A.R. 3506, 2015 Daily Journal 4049

The relatives of a former railway worker who died from malignant pleural mesothelioma filed a wrongful death action against a railway company. The plaintiffs alleged that the decedent developed the disease as a result of exposure to asbestos, asbestos-containing products and/or products designed to be used in association with asbestos products, while working at a dismantling facility and roundhouse owned by the defendant’s predecessor.

The defendant moved to quash service of summons for lack of personal jurisdiction, contending that the trial court lacked specific personal jurisdiction over it because the conduct alleged against it did not arise from it’s in-state activities. The defendant also contended that the trial court lacked general personal jurisdiction because it is a Delaware corporation with its principal place of business in Texas, and therefore not “essentially at home” in California, as required under Daimler AG v. Bauman (2014) ––– U.S. ––––, 134 S.Ct. 746, 751 and Goodyear Dunlop Tires Operations, S.A. v. Brown (2011) ––– U.S. ––––, 131 S.Ct. 2846, 2854.

The trial court denied the motion to quash, concluding that the defendant’s “systematic and continuous business in California,” its status as an American company, and its role as a “perpetrator” of the wrongdoing alleged rendered it amenable to general jurisdiction even after Daimler and Goodyear.  However, the court of appeal issued a writ of mandate directing the trial court to vacate its order denying the motion to quash and to enter a new order granting the motion, holding that even though the defendant conducted continuous and systematic business in California by owning 1,149 miles of track, employing 3,520 people, and generating 6 percent of its overall revenue in the state, those facts were insufficient to impose general jurisdiction:

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.” …

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. … [T]he 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. If petitioner’s California activities sufficed to allow adjudication of a Kansas-rooted case in California, “the same global reach would presumably be available in every other State in which [petitioner’s] sales are sizable.” … This result is not permissible under the due process clause as interpreted in Daimler. …

Real parties suggest this is an “exceptional case” … in which petitioner should be amenable to suit in California despite having its principal place of business and place of incorporation elsewhere. They assert that asbestos disease is an indivisible injury, and requiring plaintiffs affected by it to “sue individual defendants, each in its own state of incorporation or in its principal place of business, in multiple places throughout the country,” would “present a horrific burden to all the courts,” work a grave injustice to injured plaintiffs, and “unjustifiably assist defendants in avoiding responsibility for their conduct.” We are not unsympathetic to real parties’ concerns, which echo those Justice Sotomayor raised in her concurring opinion in Daimler. … 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.