Ford Motor Co. v. Mont. Eight Judicial Dist. Court

The issue before the Supreme Court was whether Minnesota and Montana state courts had properly exercised personal jurisdiction over Ford. In each of the state court cases consolidated before the Supreme Court, a Ford vehicle was involved in a crash in the forum state where the plaintiff resided and was injured. Ford conducted business in the forum states, including advertising, selling and servicing the vehicle models the plaintiffs claimed were defective, but the subject vehicles were not originally sold, manufactured or designed in the forum state.

Ford claimed that the state courts only had specific jurisdiction where the company designed, manufactured or sold the particular vehicle involved in the accident. According to Ford, Bristol-Myers demands that type of causal link between the company’s conduct in the state and the plaintiff’s claims.

The Montana and Minnesota Supreme Courts disagreed. They assessed the various ways that Ford purposefully engaged in and benefitted from business in Minnesota and Montana. The courts referenced, among other things, sales numbers, influential advertising and marketing in the area, number of dealerships and certified repair, replacement and recall services.

The U.S. Supreme Court agreed with the state supreme courts, finding that the strict causal link advocated by Ford was not required to satisfy personal jurisdiction.

Two avenues for establishing specific jurisdiction

The Supreme Court’s opinion revisits the specific jurisdiction requirement that a plaintiff’s claim must “arise out of or relate to the defendant’s contacts with the forum” in order for the court to exercise personal jurisdiction. According to the court, that standard and the word “or” allow specific jurisdiction to be established in one of two ways: (1) based on a causal relationship or (2) a connection demonstrating that the defendant’s conduct in the forum state sufficiently “relates to” the plaintiff’s claim.

The court recognizes that the “arise out of” language refers to a causal connection. However, the “relates to” portion of the standard supposes that some relationship will support jurisdiction without a causal showing. In other words, specific jurisdiction is not foreclosed, as Ford argued, once the causal test fails. A court may still have jurisdiction because of other activities or occurrences “involving the defendant” that take place in the forum.

Although it may appear as if the Supreme Court is relaxing or expanding the standard for establishing specific jurisdiction, the court is, of course, mindful of due process and reiterates that the standard “has real limits” and “does not mean anything goes.” Moreover, the court does not overrule its prior specific jurisdiction jurisprudence.

The court distinguishes Bristol-Myers Squibb

The Supreme Court previously found that a California court’s exercise of personal jurisdiction was improper in Bristol-Myers. In that case, the California court was not permitted to exercise specific jurisdiction in a product liability class action involving plaintiff class members who resided outside the forum state. The Supreme Court found that there must be an affiliation between the forum and the underlying controversy, like an act that takes place in the forum state.

“When there was no [act or other] such connections, specific jurisdiction is lacking regardless of a defendant’s unconnected activities in the State.” It was not enough for specific jurisdiction that Bristol-Myers profited from substantial sales in California and participated in substantial advertising in California. Bristol-Myers “did not develop [the product] in California, did not create a marketing strategy for [the product] in California, and did not manufacture, label, package, or work on the regulatory approval of the product in California.”

In contrast, in Ford Motor Co., the Supreme Court found plaintiffs were residents of the forum states, they used the allegedly defective products in the forum states, and they were injured when those products malfunctioned in the forum states. Accordingly, the Supreme Court found that Ford’s contacts with Minnesota and Montana were sufficiently connected to the plaintiffs’ claims for those state courts to exercise specific jurisdiction.

The court distinguishes Walden

Like Bristol-Myers, the Supreme Court also distinguished Walden v. Fiore, because only the plaintiffs had contacts with Nevada. In Walden, a police officer seized money in Georgia from two airline passengers headed to Nevada. The Nevada passengers sued the police officer, and the Nevada state court exercised personal jurisdiction because the plaintiff passengers “felt the effect” of the harm in Nevada.

In Walden, the Supreme Court found that the Nevada court did not properly exercise specific jurisdiction because the police officer had not purposefully availed himself of Nevada’s jurisdiction. He did not “reach out beyond” his home, “exploit a market” in Nevada, or enter into a contractual relationship there. The court explains that because the officer neither had contacts, conducted activities, traveled to, nor sent anything to anyone in Nevada, the court did not need to address the necessary connection between a defendant’s in-state activity and the plaintiff’s claims.

Based on Walden, Ford argued that plaintiff’s residence and place of injury did not support the court’s exercise of specific jurisdiction over a defendant. But the Supreme Court in the Ford case distinguished Walden based on the many contacts that Ford had with Montana and Minnesota. Further, the Supreme Court found that even though a plaintiff’s injury and residence do not create a defendant’s contact with the forum state, those places are still relevant to assess the link between the defendant’s contact with the forum and the plaintiff’s claims.

Conclusions

According to the Supreme Court, the relationship between Ford’s activities in Minnesota and Montana and the plaintiffs’ claims were strong enough to support specific jurisdiction. There are at least three takeaways from this case:

1. A strict causal connection between a defendant’s activities and plaintiff’s claims is not necessary for specific jurisdiction. Although the “arise out of” language admittedly implies a causal relationship between a defendant’s activities and the forum state, courts must also consider whether a defendant’s forum state activities sufficiently “relate to” a plaintiff’s claim for the court to exercise specific jurisdiction.

2. There is no bright-line test for the court’s “relate to” avenue to specific jurisdiction. The Supreme Court did not answer how much contact would be necessary to create a connection with the forum state under the “relate to” means to specific jurisdiction. As Justice Samuel Alito points out in his concurrence, the court does not indicate what the limits of the “relates to” phrase are, which leaves the lower courts with little meaningful guidance.

3. A case-by-case analysis of specific jurisdiction is necessary and leaves the door open for more challenges to personal jurisdiction. The Supreme Court did not reverse or invalidate its prior personal jurisdiction decisions like Bristol-Myers, Walden and World-Wide Volkswagen v. Woodson. The Ford case did not involve a state court’s exercise of personal jurisdiction over a foreign manufacturer. The Supreme Court also expressly acknowledged that its decision does not apply to sporadic or isolated transactions in a forum state or address internet transactions that result in sales of a product to customers in a forum state. As such, each court and litigant must still evaluate on a case-by-case basis whether the exercise of specific jurisdiction is proper or offends due process.

For more information, please contact Chelsea Weaver, Elizabeth Moyo, Joyce Edelman or any member of the Product Liability practice group.