June 02, 2017

Federal Employers' Liability Act does not apply to out-of-state corporations: US Supreme Court

Liability Act

In BNSF Railway Co. v. Tyrrell, the US Supreme Court ruled on May 30 that the Federal Employers' Liability Act (FELA) does not apply to out-of-state corporations. FELA holds railroads liable in money damages to their employees for injuries that occurred on the job. The case was filed in Montana state court, but the injuries did not occur in the state.

The court sided with defendant BNSF Railway Co. saying that such lawsuits must be filed in the state where the employee is “at home” — where it is incorporated or headquartered.

Justice Ruth Bader Ginsberg explained that "The Fourteenth Amendment's Due Process Clause does not permit a state to hale an out-of-state corporation before its courts when the corporation is not 'home', in the state, and the episode-in-suit occurred elsewhere."

Justice Sonia Sotomayer dissented in part stating that this decision will create a windfall to make it more difficult for multi-state or multi-national corporations to be subject to jurisdiction in any location other than their principal places of business or of incorporation.

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