IN THE SUPREME COURT OF THE STATE OF MONTANA
WILLIAM D. FORD,
Plaintiff and Respondent
BURLINGTON NORTHERN RAILROAD
COMPANY, a Delaware corporation,
Defendant and Appellant,
THOMAS L. JOHNSON,
Plaintiff and Respondent,
BURLINGTON NORTHERN RAILROAD
COMPANY, a Delaware corporation,
Defendant and Appellant
APPEAL FROM: District Court of the Thirteenth Judicial District,
In and for the County of Yellowstone,
The Honorable Russell K. Fillner, Judge presiding;
The Honorable William J. Speare, Judge presiding.
COUNSEL OF RECORD:
For Appellant:
Kurt W. Kroschel, Russell D. Yerger,
Kurt W. Kroschel & Assoc., Billings, Montana
For Respondent:
Robert S. Fain, Jr., James C. Reuss, Wright
Tolliver & Guthals, P.C., Billings, Montana;
Gary K. Wood, Morrisard & Rossi, P.C.,
Aurora, Colorado
Submitted on Briefs: April 18, 1991
~eci'ded: August 12, 1991
Filed:
Justice Terry N. Trieweiler delivered the opinion of the Court.
The plaintiffs, William D. Ford and Thomas L. Johnson, filed
separate actions in the District Court for the Thirteenth Judicial
District, Yellowstone County, pursuant to the Federal Employers
Liability Act found at 45 U.S.C. 5 5 51-60. The defendant in both
cases, Burlington Northern Railroad Company, moved to transfer
venue to Hill County for the reason that that county was its
principal place of business in Montana, and therefore, should serve
as its residence for purposes of determining proper venue.
In reliance on our decision in Haug v Burlington Northern R. Co.
.
(1989), 236 Mont. 368, 770 P.2d 517, the District Court denied
defendant's motion in both cases. From those orders denying
defendant's motion for change of venue, defendant appeals. Those
cases have been consolidated for purposes of appeal. We affirm the
District Court.
Defendant raises the following issue on appeal:
Does 5 25-2-118, MCA, as applied by this Court, violate the
Equal Protection Clause of the Fourteenth Amendment of the United
States Constitution by treating nonresidents, such as defendant,
differently than residents for purposes of venue without any
rational basis for dissimilar treatment?
FACTUAL BACKGROUND
Plaintiffs are both residents of Sheridan, Wyoming. Johnson
alleges in his complaint that he was injured during the course of
his employment with defendant on August 22, 1987, while working as
a locomotive engineer. Ford alleges in his complaint that he was
injured on February 7, 1989, while employed by defendant as a
brakeman. Both plaintiffs were injured while working on their
employerlspremises in Sheridan, Wyoming. Both have alleged that
defendant failed to provide them with a safe place to work at that
location.
Defendant is a railroad operating in interstate commerce. It
is incorporated in the state of Delaware, and its principal place
of business is Fort Worth, Texas. It operates its business in
several Montana counties, including Yellowstone County. However,
it alleges, and for purposes of this appeal, we will assume that
its Montana headquarters are located in Hill County.
Plaintiffs1 exclusive remedy for injuries sustained during the
course of their employment with the railroad is their claim
pursuant to the Federal Employers Liability Act, 45 U.S.C.
8 8 51-60. Section 56 of the Act provides that an action to enforce
rights granted by the Act can be brought in either federal or state
courts, and establishes venue in those cases where the action is
brought in federal court. Section 56 provides in relevant part as
follows:
Under this chapter an action may be brought in a district
court of the United States, in the district of the
residence of the defendant, or in which the cause of
action arose, or in which the defendant shall be doing
business at the time of commencing such action. The
jurisdiction of the courts of the United States under
this chapter shall be concurrent with that of the courts
of the several states.
Defendant does not deny that it does business in Yellowstone
County, Montana, and that if plaintiffs had chosen the federal
district court as their forum, defendant could have been properly
sued in the federal district court located in Billings, Montana.
Furthermore, section 56 has been the law for over 80 years. Its
effect has always been to treat railroads differently than other
parties. However, defendant cites no authority holding that it is
unconstitutional for that reason.
Defendant objects to the rule by which venue was established
in this case under state law.
We apply state law to determine proper venue in this case
pursuant to Miles v. Illinois Central R. Co. (1942), 315 U.S. 698, 62 S.Ct.
827, 86 L.Ed. 1129, in which the U.S. Supreme Court established
that rules of venue in FELA actions filed in state courts are
properly left to the various states.
In Montana, the general venue statute is 5 25-2-118, MCA,
which provides as follows:
Unless otherwise specified in this part:
(1) except as provided in subsection ( 3 ) , the proper
place of trial for all civil actions is the county in
which the defendants or any of them may reside at the
commencement of the action;
(2) if none of the defendants reside in the state, the
proper place of trial is any county the plaintiff
designates in the complaint ....
In Haug, 770 P.2d 517, we held that 1 25-2-118, MCA (1989),
allowed plaintiffs in FELA actions to sue out-of-state residents,
such as defendant, in any county in the state.
We stated:
From the case history in Montana, we conclude that a
plaintiff is entitled to bring a tort action against a
non-resident defendant in either the county where the
tort occurred or in any county of this state. This Court
has consistently held that a foreign corporation has no
county of residence for venue purposes and can be sued
in any county selected by the plaintiff. Hanlon v. Great
Northern Railway Co. (1928), 83 Mont. 15, 268 P. 547; Truck
.
InsuranceExchange v N F U.P o e t & C s a t Co. ( 1967) , 149 Mont
. .. r p r y a u l y
387, 427 P.2d 50; F l y v. General Motors Cop. (1972), 159
oe
Mont. 469, 499 P.2d 774. The holdings of these cases are
consistent with the provisions of 1 25-2-118(2), MCA,
which in substance states that any county designated by
the plaintiff is the proper place of trial if no
defendants reside in Montana.
Haug, 770 P.2d at 519.
It is defendant's position that Montana's venue statute, as
applied by this Court in Haug, discriminates against out-of-state
corporations without any apparent justification, and therefore,
denies defendant equal protection under our state's laws.
DISCUSSION
Although there is some inconsistency in the federal case law,
our decision appears to be controlled by a series of U.S. Supreme
Court decisions, beginning with C n i n t Street Ry. Co.v S e l (1904)
icnai . nl , 193
U.S. 30. In that case, the defendant railroad was sued in the
county of its principal place of business. The plaintiff was
allowed to transfer venue to an adjoining county based upon a venue
statute which permitted transfer where one of the parties was a
corporation with more than 50 stockholders, and the action was
pending in the county in which the corporation had its principal
office or transacted its principal business. It was the
defendant's position that equal protection of the laws was denied
because an equal opportunity to transfer venue was not conferred
on the corporation. The U.S. Supreme Court held that the
Fourteenth Amendment does not guarantee citizens the right to have
disputes determined in one forum, as opposed to another. It
stated:
As previously shown, the Supreme Court of the State of
Ohio pointed out in its opinion that the rights of the
parties were governed in the court to which the case was
transferred by the same law and the same rules which
would have prevailed had the case been tried in the court
in which it was originally brought. And this has not
been challenged either by the assignments of error or
any of the arguments made to sustain them. The
proposition to which the case reduces itself is therefore
this: That although the protection of equal laws equally
administered has been enjoyed, nevertheless there has
been a denial of the equal protection of the law within
the purview of the Fourteenth Amendment, only because the
State has allowed one person to seek one forum and has
not allowed another person, asserted to be in the same
class, to seek the same forum, although as to both
persons the law has afforded a forum in which the same
and equal laws are applicable and administered. But it
is fundamental rights which the Fourteenth Amendment
safeguards and not the mere forum which a state may see
proper to designate for the enforcement and protection
of such rights. Given therefore a condition where
fundamental rights are equally protected and preserved,
it is impossible to say that the rights which are thus
protected and preserved have been denied because the
State has deemed best to provide for a trial in one forum
or another. It is not under any view the mere tribunal
into which a person is authorized to proceed by a state
which determines whether the equal protection of the law
has been afforded, but whether in the tribunals which the
state has provided equal laws prevail.
It follows that the mere direction of the state law that
a cause under given circumstances shall be tried in one
forum instead of another, or may be transferred when
brought from one forum to another, can have no tendency
to violate the guarantee of the equal protection of the
laws where in both the forums equality of law governs and
equality of administration prevails. In Iowa C n r l Railway
eta
Companyv. Iowa, 160 U.S. 389, 393, this Court said:
"But it is clear that the Fourteenth Amendment
in no way undertakes to control the power of
a State to determine by what process legal
rights may be asserted or legal obligations be
enforced, provided the method of procedure
adopted for these purposes gives reasonable
notice and affords fair opportunity to be
heard before the issues are decided. This
being the case, it was obviously not a right,
privilege or immunity of a citizen of the
United States to have a controversy in the
state court prosecuted or determined by one
form of action instead of by another.lV
C n i n t Street Ry. Co., 193 U.S. at 36-37.
icnai
It is defendant's position that this issue is controlled by
the Supreme Court s decision in Power Mfg. Co. v. Saunders (1927), 274
U.S. 490, 47 S.Ct. 678. In that case, the defendant corporation,
which was a resident of Ohio, was sued by one of its employees in
the state of Arkansas. It was sued in a county other than the
county where its principal place of business was located. For that
reason, it challenged the Arkansas venue statute which required
that actions of that type against a resident corporation be brought
in the county where it had a place of business or in which its
chief officer resided, but permitted actions against foreign
corporations to be brought in any county in the state. In that
case, where the defendant did no business and had no office,
officer, or agent in the county where suit was brought, the Supreme
Court found no rational basis for distinguishing between foreign
and domestic corporations, and held that since discriminatory
treatment was without a reasonable basis and essentially arbitrary,
it violated the Equal Protection Clause of the Fourteenth
Amendment.
We find that the Saunders case is not controlling for several
reasons.
First, Saunders is distinguishable on its facts. In that case,
the defendant did no business in the county where venue was
established. In this case, defendant admittedly does business in
Yellowstone County. In Saunders, plaintiff's action was brought
pursuant to the common law of the state of Arkansas. In this case,
plaintiffsf claims are based upon federal statutory law which was
designed to provide injured railroad workers with as many options
as possible when choosing the venue within which to file their
complaint.
Second, the Saunders decision did not preclude disparate
treatment under a state's venue laws where a rational basis could
be shown for such treatment. In fact, when referring to the
requirements of the Fourteenth Amendment, that Court stated:
It does not prevent a State from adjusting its
legislation to differences in situation or forbid
classification in that connection; but it does require
that the classification be not arbitrary but based on a
real and substantial difference having a reasonable
relation to the subject of that particular legislation.
.the distinguishing principle being that
classification must rest on differences pertinent to the
subject in respect of which the classification is made.
Saunders, 274 U. S. at 493-94 (citations omitted) .
Without addressing the greater issue of whether there is a
rational basis for treating all out-of-state corporations
differently from all domestic corporations, it does appear that
there is a commonly accepted historic justification for allowing
railroad workers greater flexibility when choosing a forum than
other litigants. In LaBella v B r i g o Northern, I c (1979), 182 Mont
. ulntn n. .
202, 595 P.2d 1184, we cited the following legislative history for
45 U.S.C. 5 56, which would determine venue if plaintiffs had
brought their action in federal court.
In a Senate Committee Report, the purpose of the
amendment to section 6 H.R. 17263, 61st Cong., 2d Sess.
(1910), was said to be:
It. . .to make entirely manifest the good
faith of the legislature in the enactment of
the employers liability law, which places such
stringent liability upon the railroads for
injuries to their employees as to compel the
highest safeguarding of the lives and limbs of
the men in this dangerous employment. The
tremendous loss of life and limb on the
railroads is appalling ...
##It was the intention of Congress in the
enactment of this law originally and it may be
presumed to be the intention of the present
Congress to shift the burden of the loss
resulting from these casualties from 'those
least able to bear it1 and place it on those
who can . . . Imeasurably control their
causest.tl Sen.Rep.No. 432, 61st Cong., 2d
Sess., (1910), 45 Cong.Rec. 4041 (1910).
In reporting the bill out of committee, Senator Borah
stated his objection to the law as it existed:
@IPlaintiff may sometimes be compelled to go a
great distance in order to have his cause of
action against the defendant by reason of the
fact that now the action must be brought in
the district in which the defendant is an
inhabitant ...
It... If this bill should be passed, the law
will be remedied in that respect, enabling the
plaintiff to bring his action where the cause
of action arose or where the defendant may be
doing business. The bill enables the
plaintiff to find the corporation at any point
or place where it is actually carrying on
business and there lodge his action, if he
chooses to do so." 45 Cong.Rec. at 4034-4035
(1910).
The strength of the policy behind section 6 can be
further gleaned from Congresst refusal to pass the
Jennings Bill in 1947. It would have repealed most of
section 6 and limited the forum choices of injured
railroad workers to the district where the cause of
action arose or where the plaintiff resided. If process
could not be served in either of those places, an action
could be brought where defendant was doing business.
H.R. 1639, 80th Cong. 1st Sess., (1947).
It is clear then that national policy, dating back to 1910,
which was intended to address the dangerous working conditions of
railroad workers and to facilitate recovery for families of injured
workers, favors a policy of allowing railroad workers to sue their
employer at any location where the employer does business. That
national policy presents a justification for disparate treatment
in this case, which was not present in the Saunders case.
Finally, subsequent decisions by the U.S. Supreme Court raise
a question about whether Saunders continues to be good law.
Initially, Saunders was not a unanimous opinion. Mr. Justice
Holmes, with whom Mr. ~usticeBrandeis concurred, dissented from
the majority opinion. He argued that:
A foreign corporation merely doing business in the State
and having its work elsewhere will be more or less
inconvenienced anywhere away from its headquarters, but
the difference to it between one county and another is
likely to be less than it will be to a corporation having
its headquarters in the State. So I repeat that in my
opinion the plaintiff in error cannot complain if the
State holds it liable to a transitory action wherever it
may be served and sued, as it would have been liable at
common law.
Saunders, 274 U.S. at 498.
Not long after the Saunders decision, Mr. Justice Holmes wrote
for the majority in Bain Peanut Co. v. Pinson (1931) 282 U. S. 499, when
the Supreme Court denied a challenge to a Texas venue statute based
on the Equal Protection Clause.
In Bain Peanut Co., the Texas venue statute being challenged
allowed plaintiffs to sue a private corporation in the county where
an action arose, but limited suits against unincorporated
individuals to the county in which they were domiciled. The
defendant corporation challenged that disparate treatment as a
violation of the Equal Protection Clause of the Fourteenth
Amendment. In denying the defendant's challenge, Justice Holmes,
now writing for the majority, indicated that that Court's prior
decision in C n i n t Street @. Co., was still controlling.
icnai The court
held as follows:
Coming then to the merits, we are of the opinion that the
judgment was right. The interpretation of constitutional
principles must not be too literal. We must remember
that the machinery of government would not work if it
were not allowed a little play in its joints. In
deciding whether a corporation is denied the equal
protection of the laws when its creator establishes a
more extensive venue for actions against it than is fixed
for private citizens, we have to consider, not a
geometrical equation between a corporation and a man, but
whether the difference does injustice to the class
generally, even though it bear hard in some particular
case, which is not alleged or proved here. L u s i l & oivle
.. .
N s v l e R. Co. v Barber Asphalt Paving Co., 197 u s 430, 434
ahil .
Patsonev.Pennsy~vania, 232 U.S. 138, 144. This it is for the
corporation to make out. The range of the State's
discretion is large. Armour& Co. v. NorthDakota, 240 U.S.
510, 516, 517. The question seems to be answered by
CincinnatiStreetRy.Co. v. S e l 193 U.S. 30, 36, 37, which lays
nl,
down that, if the protection of fundamental rights by
equal laws equally administered is enjoyed, the
Constitution does not forbid allowing one person to seek
a forum from which another in the same class is excluded.
Bain Peanut Co., 282 U.S. at 501.
More recently, in ArnericanMotorktIns.Co. v Stames (1976), 425 U.S.
.
637, 96 S.Ct. 1800, 48 L.Ed.2d 263, C n i n t Street@.
icnai Co. was again
cited by the U. S. Supreme Court with approval. In Starnes, the
defendant, an out-of-state corporation, challenged Texas1 venue
statutes which treated domestic and foreign corporations
differently. Domestic corporations had to be sued in the county
in which they were domiciled unless plaintiff, at a preliminary
hearing, could prove by a preponderance of the evidence that he had
a cause of action. Foreign corporations could be sued in counties
other than their Texas domicile without a similar procedural
requirement. The defendant challenged the disparate treatment on
the grounds that it constituted invidious discrimination against
foreign corporations in violation of the Equal Protection Clause
of the Fourteenth Amendment. The Supreme Court denied defendant's
challenge to the Texas venue statutes for the reason that as a
practical matter there was no appreciable advantage for domestic
corporations. The Supreme Court arrived at this conclusion after
reviewing Texas case law which suggested that proving a prima facie
case was sufficient and the venue proceedings against domestic
corporations were usually truncated. In arriving at its decision,
the Supreme Court cited with approval language from C n i n t Street R .
icnai y
Co., which is set forth above. However, in language relevant to
this decision, that Court also stated:
We are not confined to the language of the statute under
challenge in determining whether that statute has any
discriminatory effect. Just as a statute
nondiscriminatory on its face may be grossly
discriminatory in its operation, W l i m v I l n i , 399 U. S.
i l a s . lios
235, 242 (1970); G i f nv. I l n i , 351 U.S. 12, 17 n. 11
rfi lios
(1956), so may a statute discriminatory on its face be
nondiscriminatory in its operation. There being no
discriminatory effect achieved by the aspects of the
Texas venue provisions calling for establishment of a
cause of action, we have no difficulty in concluding that
appellant's equal protection challenge to the Exception
27 must be rejected.
Starnes, 425 u.S. at 645.
In a footnote to the above statement, the majority noted:
6 0 ~ r conclusion makes unnecessary consideration of
appellant Is argument that Power M g Co. v Saunders, 274 U. S .
f. .
490 (1927), requires invalidation of Exception 27.
Though more recent decisions raise the question whether
Saunders continues to be good law, A l e S o e o Ohio v. Bowers,
lid t r s f
..
358 u s 522 ( 1959) ; M t o o i a Cas. I s Co. v. Brownell, 294
erpltn n.
U.S. 580 (1935); Bain Peanut Co. v Pinson, 282 U.S. 499
.
(1931), as appellant argues, the Court in Saunders did
conclude that the venue statute involved there treated
foreign corporations without reasonable basis and
arbitrarily.
Mr. Chief Justice Burger, with whom Mr. Justice Rehnquist
concurred, would have deniedthe defendant's challenge to the Texas
venue statute simply on the basis of C n i n t Street Ry. Co. and Bain
icnai
Peanut Co.
Likewise, in this case the statute which is challenged by
defendant is nondiscriminatory in its operation. The practical
effect of our venue statute in this case is that defendant is
required to defend itself in Yellowstone County, Montana--a
location where it could admittedly be required to appear and defend
itself against the same claim, had plaintiffs chosen to sue it in
federal district court.
For all of the above reasons, we affirm the orders of the
District Court, and hold that S 25-2-118, MCA (1989), as applied
by this Court in Haug does not violate the Enqual Protection Clause
of the Fourteenth Amendment to the united States Constitution.
As in Haug, our decision is based on the facts in this case,
and in particular, the strong national policy favoring a
plaintiff's selection of forum in actions brought under the Federal
Employers Liability Act.
We affirm the denial of defendant's motion for a change of
venue.
We concur:
/
~ h i g fJust