Client Alert

Once More Into the Jurisdictional Morass: Supreme Court Grapples With Specific Jurisdiction at Oral Argument in Ford Cases

07 Oct 2020

The Supreme Court heard roughly an hour of oral argument on Wednesday in a pair of cases against Ford Motor Company raising important questions about the scope of personal jurisdiction. In Ford Motor Co. v. Montana Eighth Judicial District Court and Ford Motor Co. v. Bandemer, the Court must decide whether the car manufacturer was properly subjected to specific personal jurisdiction in two states where plaintiffs alleged they were injured by manufacturing defects in Ford vehicles originally made and sold elsewhere. State courts in Minnesota and Montana had said that it was enough that Ford marketed and sold the same type of cars in those states, while Ford insisted that a defendant’s in-state activities must bear a closer causal relationship to a plaintiff’s particular claims.

A quick refresher: The Due Process Clause limits courts’ authority to exercise personal jurisdiction over defendants. Personal jurisdiction comes in two flavors: general and specific. A court with general jurisdiction over an out-of-state defendant can “hear any and all claims against” that defendant, but only if the defendant’s affiliations with the forum state “are so constant and pervasive as to render it essentially at home” there. Daimler AG v. Bauman, 134 S. Ct. 746, 751 (2014) (internal quotation marks and brackets omitted). Because Ford isn’t “at home” in Minnesota or Montana, these cases involved specific jurisdiction, which courts may exercise over an out-of-state defendant when it “purposefully avails” itself of the privilege of doing business in the state, Hanson v. Denckla, 357 U.S. 235, 253 (1958), and when the claims at issue “arise out of or relate to” the defendant’s in-state activities, Burger King Corp. v. Rudzewicz, 471 U.S. 462, 472 (1985) (internal quotation marks omitted). Ford conceded “purposeful availment” in the lower courts, so the only question before the Justices is whether the plaintiffs’ claims “arise out of or relate to” Ford’s activities in the forum states.

At argument—conducted by phone under the Supreme Court’s COVID protocols—the eight Justices grappled with the contours of its specific jurisdiction doctrine, but ultimately seemed skeptical that Ford’s proposed rule should apply. In its brief, Ford proposed 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. But the Justices immediately probed that standard, questioning Ford’s counsel about the pedigree of “proximate cause” in the personal jurisdiction case law and its practical consequences. Should a car sold in Bristol, Tennessee that gets in an accident in Tennessee be treated differently for purposes of jurisdiction than the same car sold just over the border in Bristol, Virginia, Justice Thomas asked. Would Ford’s rule mean that Ford would be subject to suit only in its home state, Justice Sotomayor wondered. What about cars sold by Ford and then resold by third parties? Several of the Justices seemed focused on the “fundamental fairness” aspect of Due Process—both Justices Breyer and Alito asked Ford what was unfair about the company being haled into court where it marketed and sold many of the very same products. Ford’s counsel urged the Justices not to get hung up on the “proximate cause” label and stressed that the Court’s past cases were clear that a close connection between defendant’s in-state activities and plaintiff’s claims was necessary, and that the Court had specifically held that the location of a plaintiff’s injury is irrelevant.

The Justices also closely questioned plaintiffs about their proposed rule. According to plaintiffs, specific jurisdiction is appropriate so long as the defendant systematically marketed, sold, and serviced similar products in the state where the plaintiff’s injury occurred. When pressed, plaintiffs’ counsel seemed more willing than Ford’s to narrow its standard. The specific kind of car would need to be the same, plaintiffs said, and Ford was free not to market or sell specific models in particular states if it did not want to be subject to suit there for those vehicles. Even the same type of airbag in a different vehicle would not necessarily be enough to establish personal jurisdiction, plaintiffs said.

One issue that seemed to particularly interest the Justices was the one that might not be before the Court—whether specific jurisdiction’s purposeful availment requirement is satisfied merely by selling products that wind up in the forum state (often known as the “stream of commerce” theory). While the Justices seemed relatively unconcerned about the fairness of plaintiffs’ rule for large manufacturers like Ford, they did seem worried about hurting regional manufacturers and small businesses operating on the Internet. Would an individual entrepreneur making duck decoys at his home in Maine be subject to suit anywhere if he sells them online, Chief Justice Roberts asked. Justice Alito asked a similar question about Internet sales, remarking that the Court’s personal jurisdiction jurisprudence was “antiquated” and a creature of the “traveling salesman” era. Those questions, plaintiffs’ counsel said, were properly addressed under the “purposeful availment” inquiry—the issue Ford had conceded in the lower courts—and thus doesn’t need to be decided in this case.

Given that “purposeful availment” appears off the table for now and the apparent concern about the consequences of a broad rule, it seems possible that the Court will resolve these cases on narrow grounds without much internal disagreement, and save the thornier questions for another day. If so, we could see a decision in the next several months. At the latest, we’ll know by July 2021.

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