BNSF Railway Co. v. Super. Ct.

CourtCalifornia Court of Appeal
DecidedMarch 27, 2015
DocketB260798
StatusPublished

This text of BNSF Railway Co. v. Super. Ct. (BNSF Railway Co. v. Super. Ct.) is published on Counsel Stack Legal Research, covering California Court of Appeal primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
BNSF Railway Co. v. Super. Ct., (Cal. Ct. App. 2015).

Opinion

Filed 3/27/15 CERTIFIED FOR PUBLICATION

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

SECOND APPELLATE DISTRICT

DIVISION FOUR

BNSF RAILWAY COMPANY, B260798

Petitioner, (Los Angeles County Super. Ct. No. BC552015) v.

SUPERIOR COURT FOR THE COUNTY OF LOS ANGELES,

Respondent;

VICKI L. KRALOVETZ, Individually and as Executor, etc.,

Real Parties in Interest.

ORIGINAL PROCEEDINGS in mandate. Emilie H. Elias, Judge. Petition granted. Sims Law Firm, Selim Mounedji and Brock Christensen for Petitioner. No appearance for Respondent. The Lanier Law Firm, Mark Douglas Bratt, Alexandra Shef, and Stephanie M. Taylor; The Arkin Law Firm, Sharon J. Arkin, for Real Parties in Interest. Petitioner BNSF Railway Company seeks a writ of mandate directing respondent trial court to vacate its order denying petitioner’s motion to quash service of process for lack of general personal jurisdiction. Real parties in interest Vicki L. Kralovetz, individually and in her capacity as personal representative of the Estate of Peter J. Kralovetz, Aaron Kralovetz, and Sarah Kralovetz (collectively “real parties”) oppose issuance of the writ and request that we take judicial notice of several documents that in their view support their position. We deny the request for judicial notice, conclude that general jurisdiction is lacking here, and grant the petition for writ of mandate. FACTUAL AND PROCEDURAL BACKGROUND Real parties filed a wrongful death action against petitioner’s predecessor in interest and numerous other defendants in Los Angeles County Superior Court. (Kralovetz v. Aerojet Rocketdyne, Inc. (Super. Ct. L.A. County, July 17, 2014, No. BC552015).) Real parties allege that decedent Peter J. Kralovetz developed and died from malignant pleural mesothelioma as a result of exposure to defendants’ “asbestos, asbestos-containing products and/or products designed to be used in association with asbestos products.” The exposure attributed to petitioner allegedly occurred in Wichita, Kansas, where decedent once worked at a dismantling facility and roundhouse owned by petitioner’s predecessor. Petitioner moved to quash service of the summons for lack of personal jurisdiction. (See Code Civ. Proc., § 418.10, subd. (a)(1).) Petitioner argued the trial court lacked specific personal jurisdiction over it because conduct alleged against it did not arise from petitioner’s in-state activities. Petitioner also argued the trial court lacked general personal jurisdiction because it is a Delaware corporation with its principal place of business in Texas and accordingly is not “essentially at home” in California (citing Daimler AG v. Bauman (2014) 134 S. Ct. 746, 751 (Daimler) and Goodyear Dunlop Tires Operations, S.A. v. Brown (2011) 131 S. Ct. 2846, 2854 (Goodyear) among other authority.)

2 In support of its motion, petitioner provided a declaration from James T. Obermiller, its custodian of records and director of corporate support and compliance. According to this declaration, petitioner is a railroad that provides freight transportation over 23,319 miles of railroad track spanning 28 states and two Canadian provinces. Petitioner is incorporated in Delaware and has its principal place of business in Fort Worth, Texas. Petitioner’s principal officers and managerial departments are housed in Texas, as is its central operations center for train dispatching and network operations monitoring. Petitioner’s highest concentrations of employees (approximately 20 percent) and railroad track (approximately 12 percent) also are in Texas. Petitioner generates the most revenue from its operations in Texas. California houses approximately 8.1 percent of petitioner’s total workforce (3,520 employees), accounts for approximately 6 percent of its revenue, and contains less than 5 percent of its total track mileage (1,149 miles). In response, real parties asserted that petitioner had minimum contacts that were sufficiently “substantial . . . continuous and systematic” to warrant the exercise of general jurisdiction by the trial court. They also requested a continuance to enable further jurisdictional discovery, which, they argued, would “elicit information regarding [petitioner’s] contacts with California that will support an exercise of general jurisdiction by the Court.” Petitioner conceded in reply that “it has substantial, systematic, and continuous contacts with California,” but argued these contacts are “immaterial” in the context of general jurisdiction. According to petitioner, Daimler “categorically rejected” the minimum contacts test and “made it clear that an exercise of general jurisdiction is only proper in the Corporation’s place of incorporation or its principal place of business.” Petitioner also opposed real parties’ request for jurisdictional discovery. After hearing oral arguments the trial court permitted real parties to take a two- hour jurisdictional deposition of Obermiller. In their supplemental opposition filing following that deposition, real parties again argued that petitioner has sufficient minimum contacts with California to support the exercise of general jurisdiction. In arguing that

3 the exercise of general jurisdiction over petitioner would not offend traditional notions of fair play and substantial justice, real parties emphasized petitioner’s concededly substantial, continuous, and systematic relationship with California, as well as the $1.4 billion in revenue petitioner generates annually in the state. (See Helicopteros Nacionales de Colombia, S.A. v. Hall (1984) 466 U.S. 408, 414 (Helicopteros).) Real parties also attempted to distinguish Daimler on its facts. In reply, petitioner redoubled its reliance upon Daimler and Goodyear. After hearing additional argument on the matter, the trial court denied petitioner’s motion to quash. The court quoted Daimler (which in turn quoted Goodyear) for the proposition that “‘[a] court may assert general jurisdiction over foreign (sister-state or foreign-country) corporations to hear any and all claims against them when their affiliations with the State are so “continuous and systematic” as to render them essentially at home in the forum State.’” (Daimler, supra, 134 S. Ct. at p. 754.) The court continued, “[t]his means a foreign corporation can be subjected to general jurisdiction in California as to claims arising outside California if its ‘commercial activities impact California on a “substantial, continuous and systematic” basis (often referred to as “doing business in the state”) . . . .’ [Citations.]” Applying these principles, the court concluded that petitioner’s “systematic and continuous business in California,” its status as an American company, and its role as a “perpetrator” of the wrongdoing alleged by real parties rendered it amenable to general jurisdiction even after Daimler and Goodyear. Petitioner timely filed the instant petition for writ of mandate. We issued an order directing the trial court to show cause why a peremptory writ of mandate to vacate the order should not issue. Real parties filed a return, and petitioner filed a reply. DISCUSSION I. Judicial Notice Real parties request that this court take judicial notice of various records of the California Secretary of State, the Los Angeles County Superior Court, the Orange County

4 Superior Court, and the California Employment Development Department.

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