Client Alert

Getting Specific: Supreme Court Once Again Examines Limits of Personal Jurisdiction in Ford Motor Company Cases

16 Sep 2020

Despite their repeated efforts to provide guidance to lower courts, the Justices once again find themselves in a familiar position: attempting to clarify the constitutional limits on courts’ power to exercise personal jurisdiction over defendants.  The Supreme Court’s docket has seen a steady stream of personal jurisdiction cases in recent years. But the lower courts just can’t seem to get it right. See Bristol-Myers Squibb Co. v. Superior Court, 137 S. Ct. 1773 (2017) (reversing 8-1 the California Supreme Court’s finding of specific jurisdiction); BNSF Railway Co. v. Tyrrell, 137 S. Ct. 1549 (2017) (reversing 8-1 the Montana Supreme Court’s finding of general jurisdiction; Walden v. Fiore, 134 S. Ct. 1115 (2014) (reversing 9-0 the Ninth Circuit’s finding of specific jurisdiction); Daimler AG v. Bauman, 134 S. Ct. 746 (2014) (reversing 9-0 the Ninth Circuit’s finding of general jurisdiction); Goodyear Dunlop Tires Operations, S.A. v. Brown, 564 U.S. 915 (2011) (reversing 9-0 a North Carolina court’s finding of general jurisdiction); J. McIntyre Machinery, Ltd. v. Nicastro, 564 U.S. 873 (2011) (plurality opinion) (reversing the New Jersey Supreme Court’s finding of specific personal jurisdiction). This time, the Court is considering the limits of specific personal jurisdiction in a pair of consolidated cases involving Ford Motor Company.

The Due Process Clause permits a court to exercise specific personal jurisdiction over an out-of-state defendant when the plaintiff’s claims “arise out of or relate to” the defendant’s forum activities. Burger King Corp. v. Rudzewicz, 471 U.S. 462, 472 (1985). (Specific jurisdiction is distinct from general jurisdiction, which allows courts “to hear any and all claims against [a defendant] when their affiliations with the State are so ‘continuous and systematic’ as to render them essentially at home in the forum State.” BNSF Ry., 137 S. Ct. at 1558.)  In Ford Motor Co. v. Montana Eighth Judicial District Court and Ford Motor Co. v. Bandemer, the Supreme Court must decide whether those requirements are met when a defendant has contacts with the forum state, but those contacts did not cause the plaintiff’s claims. In both cases, plaintiffs sued Ford for alleged defects (tires and airbags) in cars that were manufactured and originally sold outside the forum states, but that allegedly led to in-state injuries. The Montana and Minnesota Supreme Courts held that Ford’s contacts were enough to establish personal jurisdiction over the car manufacturer even though those contacts did not lead directly to plaintiffs’ claims.

In its brief in the Supreme Court, Ford proposes a “proximate-cause requirement” under which a state court may exercise specific jurisdiction only if the plaintiff can show that the defendant’s contacts with the forum proximately caused the plaintiff’s injury. By holding causation unnecessary, Ford argues that the lower courts improperly revived the “sliding scale approach” rejected by the Supreme Court in Bristol-Myers Squibb. In that case, the Supreme Court said courts should not relax “the requisite connection between the forum and the specific claims at issue” just because a defendant “has extensive forum contacts that are unrelated to those claims.” 137 S. Ct. at 1781. According to Ford, that’s exactly what the lowers courts did here. By treating a defendant’s contacts with third parties in the forum as a substitute for suit-related contacts, the lower courts disregarded the lessons of recent Supreme Court cases: that a “defendant’s suit-related conduct” must “create a substantial connection with the forum State.” Walden, 571 U.S. at 284. Ford also argues that the lower courts misread the Supreme Court’s decision in World-Wide Volkswagen Corp. v. Woodson, 444 U.S. 286 (1980), by relying on language discussing the requirement that a defendant purposefully avail itself of the privilege of doing business in the forum, which is distinct from the requirement that the plaintiff’s claims arise from or relate to that purposeful availment.

For their part, the respondents (plaintiffs in the trial court) argue that when a plaintiff has been injured in the forum state, specific jurisdiction is appropriate so long as the defendant systematically marketed, sold, and serviced similar products in that state. According to respondents, the “arise out of or relate to” test refers to a category of defendant’s activities in the forum, regardless of where the first sale of products giving rise to a plaintiff’s claims occurred. Under that reading, “where a company has continuously and deliberately exploited a state’s markets, it must reasonably anticipate being haled into court there in actions that are based on the products it regularly sells in those markets.” Respondents also invoke the strong interests of states in providing their “own injured citizens with a forum for redress when those citizens have been injured in the state by products that a defendant has routinely promoted and sold in the state.”

The Supreme Court’s resolution of these cases could have far-reaching consequences. Plaintiffs’ broader reading of the “relate to” standard threatens to blur the distinction between general and specific personal jurisdiction, and could mean that manufacturers would be subject to specific jurisdiction in any state where they regularly sell their products, regardless of whether claims against them were directly connected to their activities in the forum state.

Those high stakes have drawn considerable attention from a variety of interested parties. Amici on both sides lined up as expected. The Product Liability Advisory Council, Washington Legal Foundation, Voice of the Defense Bar, and trade groups representing automakers, pharmaceutical companies, and banks all filed briefs supporting Ford at the merits stage in the Supreme Court. So too did the United States Solicitor General’s Office, but notably without adopting Ford’s proposed rule.  The government argued that while specific jurisdiction requires a claim to have arisen, at least in part, out of the defendant’s forum activities, and that a defendant’s general business connections or the unilateral acts of third parties are not enough to establish specific jurisdiction, there is “no sound basis” for a strict rule of proximate cause. Despite charting its own course on doctrine, the Solicitor General’s Office was denied leave to participate in oral argument. Meanwhile, the Center for Auto Safety, Foundation for Moral Law, National Association of Home Builders, Main Street Alliance, American Association for Justice and Public Justice, various law professors, and 39 states plus the District of Columbia filed briefs in support of respondents.

The Supreme Court will hear an hour of oral argument in Montana Eighth Judicial District Court and Bandemer on October 7, 2020. The session will be conducted telephonically and audio will be broadcast live to the public. A decision is expected by the end of July 2021.

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