On March 25, 2021, the United States Supreme Court issued its latest decision on personal jurisdiction in the context of two product liability lawsuits involving Ford Motor Company in the matter of Ford Motor Company v. Montana Eighth Judicial District Court et al.
We have been following these cases as they made their way through the courts, and my colleague has written a post in the past covering the earlier decisions. See “The Law of Personal Jurisdiction Is About to Be Changed Again.” In each case, Ford argued that it was not subject to the jurisdiction of the courts in a state where it did not sell, design or manufacture the vehicle involved in the plaintiff’s accident. The SCOTUS rejected Ford’s argument that there must be a “causation” connection and found that Ford’s systematic contacts with the forum states, through its marketing efforts, its sale of replacement parts for its vehicles, and overall extensive business activities within the forum state, were sufficient for establishing jurisdiction.
The issue before the SCOTUS arose out two separate lawsuits, one filed in Minnesota State Court and the other in Montana State Court. In particular, Adam Bandemer filed a product liability suit against Ford in Minnesota State Court seeking to recover for personal injuries he sustained when the air bag in his 1994 Crown Victoria allegedly failed to deploy during a crash, resulting in serious brain injuries. Similarly, the Estate of Markkaya Gullett filed a product liability suit against Ford in Montana State Court seeking to recover for her death that occurred when the tire tread on her 1996 Ford Explorer allegedly separated causing her to lose control and crash.
In each of the two cases, Ford sought dismissals based upon lack of personal jurisdiction. Specifically, Ford argued in each case that the state court could only have jurisdiction if Ford’s conduct in the state had given rise to Plaintiff’s claims. The causal link, according to Ford, could only exist if it had designed, manufactured or sold the vehicles in the respective states. It was not disputed that the Crown Victoria was designed in Michigan, manufactured in Canada and sold in North Dakota. Similarly, the Explorer was designed in Michigan, manufactured in Kentucky and sold in Washington. The Minnesota and Montana supreme courts rejected Ford’s arguments, instead relying on the traditional analysis, which established the numerous ways in which Ford purposefully availed itself of opportunities in the respective states to establish jurisdiction over Ford.
U.S. Supreme Court Decision
The SCOTUS’s decision analyzed the traditional aspects of general jurisdiction and specific jurisdiction. In general jurisdiction, the typical paradigm is where the defendant is sued in its “home” state – that is, typically its place of incorporation or its principal place of business. In this regard, the SCOTUS noted that under general jurisdiction, Ford could only be sued in Michigan (its principal place of business) or Delaware (its place of incorporation).
The Court then focused on the type of conduct that would be required by Ford to establish specific jurisdiction. Under the traditional analysis, the Court will examine whether or not the defendant takes “some act by which it purposefully avails itself of the privilege of conducting activities within the forum state.” To this point, Ford conceded that it does substantial business in both Minnesota and Montana insofar as it actively seeks to serve the markets for automobiles and related products in both states. Rather, Ford argued that there must be a causal link to its activities with the forum state. That is, Ford contended that a court should be able to find jurisdiction only if its conduct gave rise to the plaintiff’s claims, ostensibly relying on Bristol-Myers Squibb v. Superior Court of California wherein the court stated that there needs to be a factual connection between the defendant’s forum contacts and that the claims must arise out of or relate to the defendant’s conduct in the forum state. The SCOTUS refused to accept such a narrow reading of Bristol-Myers Squibb as suggested by Ford. Instead, the SCOTUS found that because Ford had systematically served the forum states for the very vehicles at issue, by actively selling and marketing vehicles in the respective states, there was a strong relationship between Ford and the forum states and the litigation was consistent with its decisions in World-Wide Volkswagen and other more recent decisions.
In sum, the SCOTUS’s decision in Ford Motor Company does not change the law on jurisdiction, particularly with respect to lawsuits involving manufacturers who sell products worldwide. To find specific jurisdiction, a defendant must be said to “purposefully avail itself of the privileges of conducting activities within the forum state” consistent with traditional notions of due process. However, it does limit the availability of this defense to domestic manufacturers that market their products on a nationwide basis, such as Ford.