Supreme Court tightens rules on where companies can be sued

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 . (NYSE:BRKa)

“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.

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