No Jurisdiction Over Out-of-State Defendant Registered to Do Business in Missouri

The Missouri Supreme Court recently held that an out-of-state defendant was not subject to jurisdiction in Missouri simply because it was registered to do business in Missouri and conducted activities there similar to those in other states. This decision reinforces the Missouri judiciary’s recent trend of limiting personal jurisdiction in cases with out-of-state defendants and is consistent with decisions around the country holding that registration does not confer jurisdiction.

In State ex rel. Norfolk Southern Railroad Co. v. The Honorable Collen Dolan, 2017 Mo. LEXIS 66 (Mo. Feb. 28, 2017) the Supreme Court of Missouri dismissed Norfolk Southern Railway Company (“Norfolk”) for lack of personal jurisdiction. The plaintiff brought suit against Norfolk for injuries he sustained while employed in Indiana. Norfolk is principally located and incorporated in Virginia. Norfolk annually complies with Missouri’s foreign business registration statutes by registering with Missouri and designating a registered agent for service of process. Norfolk conducts substantial business and owns property in Missouri. However, Norfolk also operates railroad tracks and conducts substantial business in at least 22 states and its business in Missouri accounts for only 2 percent of its nationwide business activity.

The Missouri Supreme Court determined that Norfolk was subject to neither general nor specific jurisdiction. Under the governing United States Supreme Court decision, Daimler AG v.Bauman,134 S. Ct. 746, 754 (2014), a court can normally exercise general jurisdiction over a corporation only when the corporation’s place of incorporation or its principal place of business is in the forum state. Because Norfolk was not headquartered or incorporated in Missouri, the court evaluated whether Norfolk represented an “exceptional case” where the contacts are so substantial and of such a nature as to render the corporation at home in that State.

Applying Daimler, the Missouri Supreme Court explained that such an exceptional case requires comparing the corporation’s activities in the forum state with its activities in other states through “an appraisal of a corporation’s activities in their entirety, nationwide and worldwide.” Because Norfolk’s business in Missouri constitutes only 2% percent of its total revenue and Norfolk conducts substantial business in 22 other states, the court declined to exert general jurisdiction over Norfolk.

Plaintiff argued, consistent with a multitude of rulings in Missouri’s lower courts, that Norfolk’s registration as a foreign corporation in Missouri equated to its consent to personal jurisdiction in Missouri. The court rejected this argument, holding that a foreign corporation’s business registration in Missouri “does not provide an independent basis for broadening Missouri’s personal jurisdiction to include suits unrelated to the corporation’s activities in Missouri when the usual bases for general jurisdiction are not present.”

The court also rejected multiple theories advanced by plaintiff to support specific jurisdiction over Norfolk. A court has specific jurisdiction if the defendant’s acts took place in the forum state, and here, the plaintiff pleaded no facts alleging the injury arose from Norfolk’s Missouri activities. Further, the Norfolk court found the fact that Norfolk engaged in the same “type” of business in the forum state and the state where the injury occurred irrelevant. A ruling otherwise would render every national corporation subject to specific jurisdiction in every state in which it conducted business regardless of where the injury occurred.