Last week, the US Supreme Court made a ruling that could help limit frivolous lawsuits by determining that lawsuit plaintiffs must sue companies only in states where they are based.
The Court ruled in an 8-1 vote, that BNSF Railway Co. can’t be sued in Montana by two out-of-state employees who weren’t injured there.
The decision reversed a ruling by the Montana Supreme Court that individuals have the right to sue in the state even though they have no connection to it.
The National Federation of Independent Business (NFIB) issued a press release welcoming the decision saying it put “a crimp in the practice of suing businesses in states with the most favorable odds for jackpot jury awards.”
“This is a really big win for small businesses, which are often dragged into lawsuits in distant places merely because that’s where the plaintiffs’ lawyers think they can get the biggest pay day or the most favorable decisions,” said Karen Harned, Executive Director of the NFIB Small Business Legal Center.
In this case, two former employees of a railway company headquartered in Texas claimed damages in Montana courts despite that neither of their injuries occurred there. The company moved to dismiss the cases for lack of personal jurisdiction, but after split decisions at the trial court level, the Montana Supreme Court found that both plaintiffs could sue in Montana.
NFIB and other business groups urged the U.S. Supreme Court to review the case and reverse the Montana Supreme Court.
“This was a very clear case of court shopping,” said Harned. “It’s an insidious practice that forces small businesses to hopscotch around the country unnecessarily to defend themselves. We argued that the practice violates the Due Process Clause of the 14th Amendment, and we are very pleased that the Supreme Court agreed.”