United States Supreme Court Tackles Personal Jurisdiction

Under current United States Supreme Court precedent, for a court to exercise personal jurisdiction over a manufacturer like Ford, the plaintiff must demonstrate that the court has either general or specific jurisdiction. General jurisdiction is only established where the defendant’s connection to the forum state is so systematic and continuous that the defendant is considered “essentially at home” in the forum state – a corporation’s state of incorporation or principal place of business. Specific jurisdiction, on the other hand, exists when the claims at issue arise out of or relate to the nonresident defendant’s in-state activities. This standard may soon change.

On October 7, 2020, the Supreme Court heard oral arguments in the case Ford v. Montana Eighth Judicial District Court, Docket No. 19-368 (consolidated with Ford Motor Company v. Bandemer, Docket No. 19-369), the outcome of which could alter the test for where consumers can sue automotive manufacturers in the United States. The question presented to the Court was “[w]hether the ‘arise out of or relate to’ requirement [of the 14th Amendment’s Due Process Clause] is met when none of the defendant’s forum contacts caused the plaintiff’s claims, such that the plaintiff’s claims would be the same even if the defendant had no forum contacts.” See Ford v. Montana Eighth Judicial District Court, Docket No. 19-368, Petition for Writ of Cert, p. i. In other words, may a state court exercise personal jurisdiction over an out-of-state manufacturer even if none of the manufacturer’s contacts with the state caused plaintiff’s injuries?

Ford v. Montana Eighth Judicial District Court stems from a vehicle accident that occurred in 2015 in Montana and involved a 1996 Ford Explorer. The Explorer was assembled in Kentucky and was sold to a Washington dealership, who in turn sold the vehicle to an Oregon resident. The vehicle was sold several additional times before it was purchased and brought to Montana in 2007. Following the 2015 accident, plaintiff sued Ford in Montana state court for design defect, failure to warn, and negligence. Ford moved to dismiss the lawsuit for lack of personal jurisdiction. Ford, a company headquartered in Michigan and incorporated under Delaware law, argued it was not subject to general personal jurisdiction in Montana. It further argued there was no link between plaintiff’s lawsuit and Ford’s activity in Montana such that the court could exercise specific personal jurisdiction over Ford. The state court denied Ford’s motion, finding there was a “connection between the forum and the specific claims at issue.” The state supreme court affirmed the holding, thereby allowing the Montana courts to exercise specific personal jurisdiction over Ford and finding plaintiff’s claims, “arose out of or related to” Ford’s Montana contacts. The state supreme court found Ford had availed itself of the privilege of doing business in Montana under a “stream of commerce plus” theory by advertising and selling vehicles in Montana. Ford’s petition for a writ of certiorari with the Supreme Court followed.

In its petition and at oral argument in October 2020, Ford explained that the Montana Supreme Court’s decision permits courts to exercise specific personal jurisdiction based on a defendant’s general contacts with a forum – even if not connected to the plaintiff’s suit – so long as the defendant advertises, sells, and services vehicles in the state. Ford argued the Court should reject that logic, reasoning that the result would subject defendants who make movable products “to personal jurisdiction anywhere they do business, so long as their forum contacts relate to a plaintiff’s claim in some unspecified way that a court deems to be consistent ‘with fairness and reasonableness.’” Ford v. Montana Eighth Judicial District Court, Docket No. 19-368, Petition for Writ of Cert, p. 29. This result, Ford reasoned, deprives the defendant of control over where it will be subject to suit for a given set of conduct, which is what matters for purposes of due process. Ford’s position is that in order to exercise personal jurisdiction over Ford, its contacts with the state must be the proximate cause of the accident and of plaintiff’s injuries.

Plaintiffs argued a causal connection is unnecessary, and that jurisdiction was warranted in the state court cases because (1) plaintiffs were injured by a Ford product while in the forum states and (2) Ford conducted in-state activities. Plaintiffs argued that the Montana Supreme Court’s decision aligns with the United States Supreme Court’s holding in World-Wide Volkswagen v. Woodson, which holds that a forum may assert “personal jurisdiction over a corporation that delivers its products into the stream of commerce,” so long as the sale arises from the corporation’s efforts “to serve, directly or indirectly, the market for its product in other states.” Ford v. Montana Eighth Judicial District Court, Docket No. 19-368, Respondent’s Brief in Opposition, p. 1. Ford’s proposed jurisdictional test, Plaintiffs argued, is elusive, and “[t]ying a court’s jurisdiction to causation—often a complicated, factbound, and disputed merits question in such cases—is a recipe for disaster.” Id., p. 28.

The Supreme Court’s decision – which should be issued within the next several months – could significantly impact product liability litigation and the forums in which consumers are able to file their product liability lawsuits.

Filings and coverage of Ford v. Montana Eighth Judicial District Court can be found here: https://www.scotusblog.com/case-files/cases/ford-motor-company-v-montana-eighth-judicial-district-court/.