Supreme Court tightens rules on where companies can be sued

Tue May 30, 2017 12:47pm EDT
 
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By Andrew Chung

(Reuters) - The U.S. Supreme Court on Tuesday tightened rules on where injury lawsuits may be filed, handing a victory to corporations by undercutting the ability of plaintiffs to bring claims in friendly courts in a case involving Texas-based BNSF Railway Co.

The justices, in a 8-1 ruling, threw out a lower court decision in Montana allowing out-of-state residents to sue there over injuries that occurred anywhere in BNSF's nationwide network. State courts cannot hear claims against companies when they are not based in the state or the alleged injuries did not occur there, the justices ruled.

BNSF [BNISF.UL] is a subsidiary of Berkshire Hathaway Inc.

"BNSF is grateful to the Supreme Court for the clarification they provided in deciding this case," the company said in a statement.

Businesses and plaintiffs have been engaged in a fight over where lawsuits seeking financial compensation for injuries should be filed.

Companies typically can be sued in a state where they are headquartered or incorporated, as well as where they have significant ties. They want to curb plaintiffs' ability to "shop" for courts in states with laws conducive to such injury lawsuits.

Plaintiffs contend that corporations are trying to limit their access to compensation for injuries by denying them their day in state courts.

"Going forward, some injured rail workers may have to travel far from home just to reach a courthouse that can hear their claims. Workers already suffering from disabling injuries caused by their employers shouldn't have to bear that burden," said Julie Murray, a lawyer for the plaintiffs.   Continued...

 
A general view of the U.S. Supreme Court building in Washington, U.S., November 15, 2016. REUTERS/Carlos Barria