Client Alert

Close Enough: Horseshoes, Hand Grenades, and Specific Personal Jurisdiction

25 Mar 2021

How close a connection does there need to be between a lawsuit and the defendant’s in-state activities for specific personal jurisdiction to apply? The Supreme Court issued a decision on that issue today in Ford Motor Co. v. Montana Eighth Judicial District Court and Ford Motor Co. v. Bandemer. The Court held the connection here was close enough: These were product-liability suits in which Ford served the states’ market for the products and the products caused in-state injury to the plaintiffs, who were state residents. That sufficed, the Court held, even if the defendant’s in-state conduct did not cause the plaintiffs’ claims. Justice Kagan wrote the majority opinion for five Justices, while Justice Alito and Justice Gorsuch (the latter joined by Justice Thomas) penned concurrences in the judgment. (Justice Barrett did not participate.)

As readers may recall, this case involves plaintiffs injured in car accidents in their home states of Montana and Minnesota.  While Ford sold the car models involved in both states, the plaintiffs’ particular vehicles were made and first sold elsewhere.  Only after consumers re-sold and relocated the vehicles did they end up in Montana and Minnesota. After the accidents, the plaintiffs filed product-liability suits against Ford in Montana and Minnesota, and those states’ high courts held that they had specific personal jurisdiction.

The Supreme Court affirmed.  It began by reciting black-letter law.  Specific personal jurisdiction, the Court explained, requires “purposeful availment” by the defendant of the forum. And “even then,” specific jurisdiction exists “only in certain cases”: when the plaintiff’s claims “arise out of or relate to the defendant’s contacts with the forum.” The Court explained that these limits “derive from and reflect two sets of values”: “treating defendants fairly” and “interstate federalism.”

The issue before the Court concerned the “arise out of or relate to” requirement.  Ford argued that this requirement is met only if the forum conduct caused the plaintiffs’ claims. The Court rejected that proposed rule, holding that while “arise out of” asks about causation, “relate to” allows other “relationships [to] support jurisdiction.”  “That does not mean anything goes,” the Court stressed; “the phrase ‘relate to’ incorporates real limits.”

The Court held that this case satisfied the “relate to” requirement based on precedent about product-liability cases extending back to World-Wide Volkswagen Corp. v. Woodson, 444 U.S. 286 (1980). There, and in several cases since, the Court observed that if a car manufacturer served a market for an allegedly defective product in a state, then it would be subject to suit in that state “if its allegedly defective merchandise has there been the source of injury.” In the Court’s view here, that proposition resolved this case: “Ford had systematically served a market in Montana and Minnesota for the very vehicles that the plaintiffs allege malfunctioned and injured them in those States.”

The majority thus declined to make any bold change to personal jurisdiction doctrine. It described its approach this way: It “resolve[d] these cases by proceeding as the Court has done from the last 75 years—applying the standards set out in International Shoe and its progeny.” It saw “no distinctively modern features” in this case. But it left open what would happen in a more modern case—it flagged in a footnote that “internet transactions” raise “doctrinal questions” that the Court declined to reach here.

Concurring only in the judgment, Justice Alito likewise thought no “alteration nor refinement of our case law” was necessary to decide this case. But he viewed existing law differently from the majority. In his view, “arise out of” and “relate to” are “not really two discrete grounds for jurisdiction,” but rather a single standard requiring a “rough causal connection,” satisfied in this case. In addition, Justice Alito registered doubts about the International Shoe standard’s viability for modern fact patterns, calling Justice Gorsuch’s opinion on the subject “thoughtful.”

Justice Gorsuch’s concurrence in the judgment (joined by Justice Thomas) criticized the majority for failing to define more precisely its “relate to” standard. The majority left that “[u]nclear,” Justice Gorsuch wrote, risking “new layers of confusion to our personal jurisdiction jurisprudence.” He then set his sights on the foundations of modern personal jurisdiction doctrine: International Shoe and the distinction between general and specific jurisdiction. He recounted the history of personal jurisdiction and criticisms of current doctrine. But a replacement doctrine, if any, will have to await a future case. Justice Gorsuch explained that he “finish[ed] these cases with even more questions than [he] had at the start,” and he called on “future litigants and lower courts” to help the Court “sort out a responsible way to address the challenges posed by our changing economy in light of the Constitution’s text and the lessons of history.”

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