United States District Court, N.D. Mississippi, Greenville Division
MELTON PROPERTIES, LLC., et al. PLAINTIFFS
ILLINOIS CENTRAL RAILROAD COMPANY, et al. DEFENDANTS
M. BROWN, UNITED STATES DISTRICT JUDGE.
the Court is Canadian National Railway's motion to
dismiss for lack of personal jurisdiction or, alternatively,
for failure to state a claim. Doc. #80.
March 27, 2018, Melton Properties, LLC; Floyd M. Melton, Jr.;
Floyd M. Melton III; Moss B. Melton (collectively,
“Melton Plaintiffs”); McMillan Acres; Danny
Hargett; Jane Hart McMillan Hargett; and David Hargett filed
this action in the United States District Court for the
Northern District of Mississippi against Illinois Central
Railroad Company; Canadian National Railway; Union Tank Car
Company, Inc.; and certain fictitious parties. Doc. #1. The
complaint, as amended,  asserts state and federal claims
arising from a toxic spill caused by a March 30, 2015,
derailment of a railcar owned by Union Tank, which was being
transported by “Illinois Central and/or Canadian
National” on tracks “owned by Illinois Central
and/or Canadian National.” Doc. #92 at ¶¶
14-15, 36-114. The plaintiffs, all property owners near the
site of the spill in Leflore County, Mississippi (known as
the Minter City site), also assert claims related to the
remediation of the spill. Id. at ¶¶ 69-72.
August 23, 2018, Canadian National filed a motion to dismiss
for lack of personal jurisdiction or, alternatively, for
failure to state a claim. Doc. #31. Approximately a month
later, United States Magistrate Judge Jane M. Virden, on the
plaintiffs' motion, authorized the following
Plaintiffs will be allowed to propound up to 20
Interrogatories, 20 Requests for Production, and 20 Requests
for Admission to each Defendant, and the Defendants shall
respond thereto within thirty (30) days, in accordance with
the Federal Rules of Civil Procedure. Should it desire to do
so, Canadian National Railway Company may propound a similar
number of written discovery items in compliance with the
provisions of this paragraph.
The Plaintiffs will also be allowed to depose under Rule
30(b)(6), Fed.R.Civ.P., the corporate representative(s) of
Illinois Central Railroad Company (Illinois Central”)
and Canadian National Railway Company during the discovery
Prior to taking a Rule 30(b)(6) deposition of Canadian
National Railway Company and/or Illinois Central, Plaintiffs
may depose, and/or subpoena documents as may be necessary
from the following individuals: Nathan Judice, Anthony Dale,
David Smith, Charles Brown, and Patrick Waldron. Based upon
Canadian National Railway Company's discovery responses
and/or the depositions or subpoena responses of all or some
of the above-named individuals and/or Canadian National
Railway Company and/or Illinois Central, Plaintiffs and
Defendants may agree to additional discovery within the
discovery period. However, if no agreement is possible,
Plaintiffs may seek relief from the Court by motion.
Defendant Canadian National Railway Company will be allowed
to depose at its discretion Floyd Melton, III during the
60-day discovery period, since he submitted an Affidavit in
Opposition to the Motion to Dismiss. The parties may obtain
documents from third parties by subpoena as deemed necessary.
Doc. #40 at 3-4. Due to the ongoing jurisdictional discovery,
this Court denied without prejudice Canadian National's
motion to dismiss. Doc. #51.
March 26, 2019, after the close of jurisdictional discovery,
Canadian National filed a motion to dismiss for lack of
personal jurisdiction or, alternatively, for failure to state
a claim. Doc. #80. The motion has been fully briefed.
See Docs. #81, #83, #90.
defeat a motion to dismiss for lack of personal jurisdiction,
a plaintiff, in the absence of an “evidentiary hearing,
” “bears the burden of establishing only a
prima facie case of personal jurisdiction.”
Carmona v. Leo Ship Mgmt., Inc., 924 F.3d 190, 193
(5th Cir. 2019). In making this determination, a court must
“accept the plaintiff's uncontroverted,
nonconclusional factual allegations as true and resolve all
controverted allegations in the plaintiff's favor.”
Id. When there has been an evidentiary hearing, the
plaintiff must establish jurisdiction by a preponderance of
the evidence. Walk Haydel & Assocs., Inc. v. Coastal
Power Prod. Co., 517 F.3d 235, 241-42 (5th Cir. 2008). A
party receives an evidentiary hearing when it is
“allowed to submit affidavits and to employ all forms
of discovery, subject to the district court's discretion
and as long as the discovery pertains to the
personal-jurisdiction issue, ” and when a hearing with
live testimony is provided if warranted and
“requested.” Id.; see In re
Chinese-Manufactured Drywall Prods. Liab. Litig., 742
F.3d 576, 583 n.7 (5th Cir. 2014) (affirming district court
“determin[ation] that it had held an evidentiary
hearing on discovery because it relied on discovery evidence,
including depositions”); see generally SFS Check,
LLC v. First Bank of Del., 774 F.3d 351, 356 (6th Cir.
2014) (“When … the district court allows
discovery on the motion, the court should consider the facts
offered by both parties and rule according to the
preponderance of the evidence.”). Live testimony is
warranted if it “would help resolve factual disputes
dispositive of the jurisdictional question ….”
Walk Haydel, 517 F.3d at 242.
the parties were granted substantial and largely unfettered
jurisdictional discovery over a two-month period, which
included the right to conduct Rule 30(b)(6) depositions and
to issue twenty requests for admission, twenty
interrogatories, and twenty requests for production.
Jurisdictional discovery was conducted within the allowed
parameters during that two-month period and
beyond. No. party has objected to the adequacy of
this discovery or has requested a live evidentiary hearing.
Furthermore, the record as presented reveals no disputed
dispositive issue of fact which live testimony would help
resolve. Accordingly, under these circumstances, the Court
concludes that an evidentiary hearing was afforded and that,
therefore, the preponderance of evidence standard applies.
discussed below, jurisdiction over Canadian National involves
two factual inquiries: (1) Canadian National's corporate
structure and general involvement in Illinois Central's
operations and (2) Canadian National's specific
involvement in the cleanup of the spill at issue here.
Corporate Structure and Operation
National is a Canadian corporation operating as a railroad in
Canada which maintains its principal place of business in
Montreal, Canada. Doc. #80-1 at ¶¶ 3-4. The entity
is not registered to do business in Mississippi, has no
employees in Mississippi, owns no land or tracks in
Mississippi, and does not maintain an agent for service in
Central is an Illinois corporation with its principal place
of business in Illinois. Id. at ¶ 5. Illinois
Central is connected to Canadian National through the
following corporate structure: (1) Illinois Central is a
wholly-owned subsidiary of Illinois Central Corporation; (2)
Illinois Central Corporation is a wholly-owned subsidiary of
CN Financial Services VIII LLC; (3) CN Financial is a
wholly-owned subsidiary of Grand Trunk Corporation; (4) Grand
Trunk is a wholly-owned subsidiary of North American
Railways, Inc.; (5) North American Railways is a wholly-owned
subsidiary of Canadian National. Id. at ¶ 6.
approximately 1998 until July of 2004, Illinois Central did
business under the names “Canadian National/Illinois
Central Railroad” or “CN/IC.” Id.
at ¶ 8. It does, however, use and operate under the
trade name “CN” and utilize a “CN”
logo. Id. Notwithstanding utilization of the CN
trade name, Illinois Central maintains its own articles of
incorporation and corporate records, conducts meetings with
its board of directors, and makes required corporate filings.
Id. at ¶ 10.
National and its wholly owned subsidiaries (collectively,
“CN Entities”) together operate rail operations
in Canada and the United States “as one business
segment.” Doc. #83-14 at 13. To this end, the CN
Entities utilize a shared “Safety Management System
(SMS).” Doc. #83-15 at 113. As a part of the shared
operations, which are conducted under the CN name, the CN
Entities employ “Wi-Tronix, ” “a locomotive
telemetry system” which transmits train information to
a shared regional operations center in Homewood, Illinois.
Id. at 28; Doc. #83-16 at 22. In addition to SMS,
the CN Entities maintain a CN portal website,  owned and
operated by Canadian National, which allows customers to
access services provided by the CN Entities as a whole. Doc.
#83-17 at 1; Doc. #83-18 at 4; Doc. #83-16 at 12. Although it
appears various subsidiaries employ their own police forces,
“administrative responsibility for oversight” of
the police force rests with a Canadian National
employee. Doc. #83-16 at 12-14.
undisputed that the railroad tracks and railroad right-of-way
at the location of the derailment are owned by Illinois
Central. Doc. #80-2. It is also undisputed that none of the
ten railroad cars involved in the derailment were owned by
Canadian National. Doc. #80-3. Further, it is undisputed that
Canadian National did not operate the train involved in the
derailment. Doc. #80-1 at ¶ 4.
the relevant time period, primary responsibility for
“emergency response and remediation actions” at
the derailment site rested with three Illinois Central
environmental managers-Charles Brown, Robert Strong, and Joe
Phelps. Doc. #80-18 at 1-2. These employees were managed by
Devin Sprinkle, Illinois Central's Regional Manager -
role as regional manager, Sprinkle made “day to day
decisions with regard to the … Derailment usually
after consultation” with Brown, Strong, and Phelps.
Id. at 2. Sprinkle was also responsible for liaising
with Normand Pellerin, Canadian National's Assistant Vice
President - Environment, on the remediation efforts.
Id. According to Sprinkle, it was (and remains)
necessary to keep Pellerin, who Sprinkle referred to as his
“supervisor, ” advised as to Illinois Central's