By Allen Eraut and Kevin Bergstrom
Since the Daimler decision in 2014, Oregon trial courts have been wrestling with the proper boundaries for personal jurisdiction over out-of-state defendants. The recent Barrett v. Union Pacific decision by the Oregon Supreme Court follows the approach taken by Daimler, which generally limits general jurisdiction to the state where a corporation has its principal place of business. In cases where the act or injury giving rise to the claim occurred outside the state where the plaintiff brought suit, a corporate defendant can seek dismissal and require that the plaintiff re-file the claim in the corporation’s home state.
Union Pacific Railroad Company is a Delaware corporation with its principal place of business in Omaha, Nebraska. It operates railroads in 23 states, including
Oregon and Idaho. It has been engaged in business in Oregon for many years, with approximately 3.4% of its railroad track miles in Oregon. Plaintiff
was hurt in Idaho while working for Union Pacific. Plaintiff is an Oregon resident, and sued Union Pacific in Oregon to recover for his injuries.
In response to Union Pacific’s motion to dismiss for lack of personal jurisdiction, Plaintiff argued that Union Pacific’s operations in Oregon were so substantial such that Oregon could assert jurisdiction over it. The trial court agreed and ruled that it could exercise general jurisdiction over Union Pacific.
The Oregon Supreme Court examined whether Due Process Clause of the Fourteenth Amendment of the Constitution permitted Oregon to exercise general jurisdiction over Union Pacific. The Court began with Daimler AG v. Bauman, 134 S. Ct. 746 (2014). Daimler held that a corporation is “at home,” meaning subject to general jurisdiction, in two places: the corporation’s state of incorporation, and its principal place of business. Id. at 760. Daimler moved away from the approach taken in another jurisdiction case, International Shoe Co. v. Washington, 326 US 310, 318 (1945), where the court recognized personal jurisdiction over corporations where “continuous corporate operations within a state [are] so substantial and of such a nature as to justify suit against it on causes of action arising from dealings entirely distinct from those activities.” Daimler rejected the idea that a corporation will be at home “in every State in which a corporation engages in a substantial, continuous, and systematic course of business.” 134 S. Ct. at 761. The Court reasoned that the inquiry is not the “magnitude of the defendant’s in-state contacts,” but the extent of those contacts in relation to the corporation’s “activities in their entirety, nationwide and worldwide.” Id. at 762 n 20.
Based on Daimler, the Oregon Supreme Court in Barrett held that Oregon could not exercise general jurisdiction over Union Pacific. Although Union Pacific engaged in substantial business in Oregon, those activities were only a small fraction of its overall national activities. The court was not persuaded by arguments of fairness or factual distinctions, finding that the Daimler court was very clear in its reasoning against establishing a rule which would expose a corporation to general jurisdiction in every state where its revenues or business activities were sizeable. A corporation’s business activities in a forum state will still give rise to specific jurisdiction where they “give rise to the liabilities sued on,” but will not allow a state to exercise general jurisdiction over the corporation for unrelated claims. Id. at 761.