April 20, 2021
As it seems to do every few years, the Supreme Court has again waded into personal jurisdiction waters. The Court issued Ford Motor Co. v. Montana Eighth Jud. Dist. Ct., 141 S. Ct. 1017 (2021), on March 25, 2021. Ford is significant for a few reasons.
Perhaps most importantly, a five-Justice majority expressly held in Ford that the exercise of “specific” personal jurisdiction over a defendant does not require that the defendant’s conduct in the forum State caused the injury for which the plaintiff seeks redress. Ford is also noteworthy because it bucks a trend in the Court’s personal jurisdiction case law. In most of its recent cases, such as Bristol-Myers Squibb Co. v. Superior Ct. of California, San Francisco Cty., 137 S. Ct. 1773 (2017); Walden v. Fiore, 134 S. Ct. 1115 (2014); Daimler AG v. Bauman, 134 S. Ct. 746 (2014); and Goodyear Dunlop Tires Operations, S.A. v. Brown, 131 S. Ct. 2846 (2011), the Court rejected attempts to force a defendant to litigate in a forum where it did not reside. Ford’s new test, by contrast, expands the bases for jurisdiction.
Ford involved two unrelated products liability cases against the Ford Motor Company, one in Montana state court and one in Minnesota state court. With regard to personal jurisdiction, the facts were not complicated. There were car accidents in both cases involving Ford automobiles. One passenger died and the other was seriously injured. In both cases, the accidents occurred in the States where the victim plaintiffs brought suit. And in both cases, the victim plaintiffs were residents of the forum State.
Not surprisingly, Ford does considerable business in both States. Ford does substantial advertising, selling, and marketing in Montana and Minnesota. Ford also sells and services in both States the models of vehicles involved in the accidents. However, neither of the cars that crashed were first sold by Ford in the forum States – nor were they designed or manufactured in the forum States. Only later resales and relocations by consumers brought the Ford automobiles to Montana and Minnesota.
On these facts, Ford argued that it was not subject to jurisdiction in either Montana or Minnesota. Ford contended that the state courts only had jurisdiction if Ford’s conduct in the forum State “gave rise” to the plaintiff’s claims, and that this requisite causal link only existed if Ford had sold the vehicles at issue in the forum State – or at least designed or manufactured them there. Neither plaintiff, according to Ford, could make that showing.
All eight Justices who heard the case disagreed. (Justice Barrett did not participate.) Justice Kagan’s opinion, in which Chief Justice Roberts and Justices Sotomayor, Breyer, and Kavanaugh joined, found that Ford was subject to specific jurisdiction in Montana and Minnesota. Justice Alito penned an opinion concurring in that judgment. Justice Gorsuch also wrote an opinion concurring in the judgment, in which Justice Thomas joined.
Justice Kagan’s opinion quickly dispensed with general jurisdiction. All parties agreed that Ford was only subject to general jurisdiction in Delaware (where it is incorporated) and Michigan (where it has its principal place of business) – not in Montana or Minnesota. That left specific jurisdiction. Justice Kagan summed up the law on specific jurisdiction by reciting familiar principles.
“The contacts needed for this kind of jurisdiction often go by the name ‘purposeful availment….’ The defendant, we have said, must take ‘some act by which [it] purposefully avails itself of the privilege of conducting activities within the forum State.’” Ford, 141 S. Ct. at 1024-25 (citations omitted). But “purposeful availment,” standing alone, does not suffice. Even with purposeful availment – “because the defendant is not ‘at home’ – the forum State may exercise jurisdiction in only certain cases.” Id. “The plaintiff ’s claims, we have often stated, ‘must arise out of or relate to the defendant’s contacts’ with the forum.” Id. (citations omitted). This is where Ford hung its hat.
Ford conceded that it had purposefully availed itself of the privilege of conducting business in Montana and Michigan. Ford acknowledged that it did substantial business in both States, and actively sought to serve the market for automobiles and related products in them. But Ford argued that such “activities do not sufficiently connect to the suits … [because] the needed link must be causal in nature.” Id. at 1026. According to Ford, “[j]urisdiction attaches ‘only if the defendant’s forum conduct gave rise to the plaintiff ’s claims.’” Id. (quoting Ford’s brief; emphasis in original). “On that view, the place of accident and injury is immaterial.” Id. Ford would “locat[e] specific jurisdiction [only] in the State where Ford sold the car in question, or else the States where Ford designed and manufactured the vehicle.” Id.
The Court was not impressed. Justice Kagan stated that “Ford’s causation-only approach finds no support in this Court’s requirement of a ‘connection’ between a plaintiff’s suit and a defendant’s activities…. That rule indeed serves to narrow the class of claims over which a state court may exercise specific jurisdiction. But not quite so far as Ford wants. None of our precedents has suggested that only a strict causal relationship between the defendant’s in-state activity and the litigation will do.” Id.
Kagan then turned to the most glaring flaw in Ford’s theory: its failure to parse the language of the Court’s oft-repeated standard for specific jurisdiction. “[O]ur most common formulation of the rule demands that the suit ‘arise out of or relate to the defendant’s contacts with the forum….’ The first half of that standard asks about causation; but the back half, after the ‘or,’ contemplates that some relationships will support jurisdiction without a causal showing.” Id. (citations omitted; emphasis in original). Justice Kagan and four other Justices found that Ford’s activities easily satisfied this part of the test.
“By every means imaginable—among them, billboards, TV and radio spots, print ads, and direct mail—Ford urges Montanans and Minnesotans to buy its vehicles, including (at all relevant times) [the] Explorers and Crown Victorias [at issue in these cases]. Ford cars—again including those two models—are available for sale, whether new or used, throughout the States, at 36 dealerships in Montana and 84 in Minnesota.” Id. at 1028. “In other words, 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. So there is a strong ‘relationship among the defendant, the forum, and the litigation’—the ‘essential foundation’ of specific jurisdiction.” Id. The majority concluded that “the connection between the plaintiffs’ claims and Ford’s activities in those States—or otherwise said, the ‘relationship among the defendant, the forum[s], and the litigation’—is close enough to support specific jurisdiction.” Id. at 1032.
Despite the Court’s unanimity on the ultimate jurisdictional question, there were divisions in the Justices’ rationales. The divisions stem from the uncertainty inherent in the majority’s decision to ground its holding on “relatedness,” as opposed to strict causality. Indeed, Justice Kagan recognized that determining whether a defendant’s contacts with a forum are sufficiently “related to” a particular dispute is – to some degree – in the eye of the beholder. The majority assures us that, nevertheless, “[t]hat does not mean anything goes. In the sphere of specific jurisdiction, the phrase ‘relate to’ incorporates real limits, as it must to adequately protect defendants foreign to a forum.” Id. at 1026.
This did not satisfy Justice Alito. Justice Alito thought that this case was easily decided based on precedents like International Shoe and World-Wide Volkswagen. In his view, nobody could “seriously argue that requiring Ford to litigate these cases in Minnesota and Montana would be fundamentally unfair[.]” Id. at 1032. “Their residents, while riding in vehicles purchased within their borders, were killed or injured in accidents on their roads.” Id. (emphases in original). And “Ford has long had a heavy presence in Minnesota and Montana. It spends billions on national advertising. It has many franchises in both States. Ford dealers in Minnesota and Montana sell and service Ford vehicles, and Ford ships replacement parts to both States.” Id. These salient facts should have ended the matter.
Justice Alito’s “only quibble [wa]s with the new gloss that the Court puts on our case law.” Id. at 1033. Alito felt that the majority “parse[d] th[e] phrase ‘[arise out of relate to]’ as though [it] were dealing with language of a statute[.]” Id. Alito stated that it was a mistake to “recognize[ ] a new category of cases in which personal jurisdiction is permitted: those in which the claims do not ‘arise out of ‘ (i.e., are not caused by) the defendant’s contacts but nevertheless sufficiently ‘relate to’ those contacts in some undefined way[.]” Id.
In Justice Alito’s view, this was “unnecessary and … unwise.” Id. Instead of thinking of the two concepts as “two discrete grounds for jurisdiction,” Alito wrote that “[t]he phrase ‘arise out of or relate to’ is simply a way of restating the basic ‘minimum contacts’ standard adopted in International Shoe.” Id. Justice Alito predicted that applying the phrase “relate to” in future cases “is a project doomed to failure.” Id. After all, in a quote attributed to Justice Scalia, “everything is related to everything else.” Id.
Justice Gorsuch likewise chided the majority for parsing the phrase “arise out of or relate to” so finely, and for “build[ing] its entire opinion around” “the disjunctive conjunction ‘or.’” Id. at 1034. And like Justice Alito, Justice Gorsuch questioned what the “assortment of nouns” in the majority’s test – i.e., “affiliation” and “relationship” – are supposed to mean. Id. “Loosed from any causation standard, we are left to guess.” Id. Gorsuch also opined that “[t]he whole project seems unnecessary.” Id. at 1035. Justice Gorsuch speculated that, had the majority searched for a but-for causal link between the plaintiffs’ injuries and Ford’s activities in the forum States, it likely would have found them. Id. at 1035-36.
In the end, Justice Gorsuch cast doubt on whether “the old International Shoe dichotomy” between general and specific jurisdiction still makes sense. Id. at 1036-38. Gorsuch surmised that “[p]erhaps it was, is, and in the end always will be about trying to assess fairly a corporate defendant’s presence or consent. International Shoe may have sought to move past those questions. But maybe all we have done since is struggle for new words to express the old ideas.” Id. at 1038-39. It is interesting that, although Justice Gorsuch asked whether it is time for a reset on the International Shoe framework, only Justice Thomas joined his concurrence.
Ford creates a new standard for specific personal jurisdiction. Although the case arose out of a product liability dispute, the majority’s logic applies to all types of civil litigation. Ford may thus have a widespread effect on litigation. As the two concurring opinions point out, the new standard adopted in Ford is vague. In light of that ambiguity, only time will tell whether lower courts interpret Ford broadly. If they do, defendants may face suit in forums they had previously thought unlikely.
Author: Marc J. Pernick