Key Takeaways From the Supreme Court’s Personal Jurisdiction Decision in Ford Motor Company v. Montana Eighth Judicial District Court

Dechert LLP

Yesterday, the Supreme Court issued an important decision in Ford Motor Company v. Montana Eighth Judicial District Court unanimously affirming the existence of personal jurisdiction over products liability claims by an in-state plaintiff for in-state injuries against an out-of-state defendant. Defendant Ford had sought to extend the Supreme Court’s decision in Bristol-Myers Squibb Co. v. Superior Court, 137 S. Ct. 1773 (2017), which rejected personal jurisdiction over claims by out-of-state plaintiffs against out-of-state defendants for out-of-state injuries. Ford argued that under Bristol-Myers, specific jurisdiction requires a “causal link” between the defendant’s forum contacts and the plaintiff’s claims, which was not present in Ford because the cars involved in the accidents were not designed, manufactured, or first sold in-state. The five-justice majority opinion disagreed, rejecting a strict causal link standard and distinguishing the forum-shopping circumstances of Bristol-Myers from the claims in Ford by in-state plaintiffs for in-state injuries. The majority held that the Court’s specific jurisdiction standard includes suits that sufficiently “relate to” a defendant’s forum contacts, even in the absence of a causal link. Concurring opinions by Justices Alito and Gorsuch would have also found personal jurisdiction on the facts of Ford but questioned the meaning of the majority’s “relate to” standard, which will likely be explored in further decisions.

Background on the Ford Decision

The Supreme Court’s decision in Ford grew out of two personal injury lawsuits over car accidents involving used Fords. Plaintiffs filed the cases in their home states of Montana and Minnesota, which was where they purchased the used cars but not where the cars were first sold. Slip Op. at 2-3. Ford did not dispute that it had purposefully availed itself of Montana and Minnesota by conducting business in both states. It argued that both state courts lacked personal jurisdiction, however, because there was no “causal link” between Ford’s conduct in those states and plaintiffs’ claims—Ford had not designed, manufactured, or first sold the cars in plaintiffs’ home states. Id. at 3. Both state supreme courts rejected Ford’s arguments and affirmed lower court decisions that due process permitted the state courts to exercise personal jurisdiction over the claims against Ford. Id. at 3-4.

The Supreme Court unanimously affirmed the existence of personal jurisdiction over Ford in both cases. The eight justices provided different reasoning across three opinions (Justice Barrett joined the Court after oral argument and did not participate). We offer three key takeaways on the decision below.

A Causal Link Is Not Required for Specific Jurisdiction

Justice Kagan’s majority opinion (joined by Chief Justice Roberts and Justices Breyer, Sotomayor, and Kavanaugh) rejected Ford’s proposed “causal link” test that would find specific jurisdiction only if the defendant’s actions in the forum state led to the plaintiff’s claim, holding that Ford’s “causation-only approach finds no support in th[e] Court’s requirement of a ‘connection’ between a plaintiff’s suit and a defendant’s activities.” Id. at 8. While Ford argued that the Court’s test for specific jurisdiction—whether the case “arise[s] out of or relate[s] to” forum conduct—was a single, causal link test, the majority held that the phrase embraces a broader scope of relationships between a defendant’s in-state conduct and a plaintiff’s claims. While the first part of the phrase—“arise out of”—speaks of causation, the second part “contemplates that some relationships will support jurisdiction without a causal showing.” Id. The majority cautioned, however, that its holding “does not mean anything goes.” Id. “[T]he phrase ‘relate to,’” it held, “incorporates real limits, as it must to adequately protect defendants foreign to a forum.” Id. at 9.

Applying this standard to the two cases before it, the majority held that Ford’s activities in Montana and Minnesota, including marketing, selling, and servicing the same models of cars at issue in the cases (with 36 dealerships in Montana and 84 in Minnesota), encouraged residents to purchase Ford cars (whether new or used) and were sufficiently related to the plaintiffs’ claims to create specific jurisdiction over their suits. The Court held: “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. at 12 (citation omitted).

Thus, following Ford, a defendant’s showing that a plaintiff’s claim does not arise out of or is not causally linked to the defendant’s conduct in the forum state may not be enough to establish that a court lacks personal jurisdiction if a plaintiff can show that the claim sufficiently “relates to” the defendant’s conduct in the state. The Supreme Court limited the scope of its holding, disclaiming any intent to address e-commerce contacts and noting that “[n]one of this is to say that any person using any means to sell any good in a State is subject to jurisdiction there if the product malfunctions after arrival.” Id. at 12 n.1. However, “[w]hen a company like Ford serves a market for a product in a State and that product causes injury in the State to one of its residents, the State’s courts may entertain the resulting suit.” Id. at 1-2.

Bristol-Myers Remains Intact

Ford does not disturb the Court’s rejection in Bristol-Myers of specific jurisdiction over claims by non-resident plaintiffs against a non-resident company whose product allegedly injured the plaintiffs. In Ford, the Court distinguished Bristol-Myers on the ground that the plaintiffs there were not residents of the forum state, had not received the product in the forum, and had not sustained any injuries there: “In short, the plaintiffs were engaged in forum-shopping—suing in California because it was thought plaintiff-friendly, even though their cases had no tie to the State.” Id. at 16. In contrast, in Ford, the plaintiffs were residents of the forum states, bought and used the cars there, and alleged they experienced injuries from product malfunctions in the forum.

Thus, nothing in Ford supports a new approach to Bristol-Myers, including its well-settled application to pharmaceutical litigation. Nor did the Supreme Court say anything in Ford that appears to address the application of Bristol-Myers to nationwide class actions, an issue which is currently being litigated in the lower courts.1

Fleshing Out the “Relate to” Standard

Both concurring opinions suggest that the majority opinion’s “relate to” test for specific jurisdiction will prove difficult for lower courts to apply. Justice Alito’s opinion, for example, notes that “[t]he ‘ordinary meaning’ of the phrase ‘relate to’ ‘is a broad one’” and that “[t]o rein in this phrase, limits must be found.” Id. at 4 (Alito, J., concurring) (citation omitted). The majority’s assurance that “relate to” “incorporates real limits” is insufficient, he observed, “without any indication what those limits might be.” Id. Justice Alito, then, would have found that specific jurisdiction requires at minimum a “rough causal connection,” which would have been present on the facts in Ford—for example, “that the vehicles in question here would never have been on the roads in Minnesota and Montana” if Ford had not marketed its products in those states. Id. at 3-4.

Similarly, Justice Gorsuch observed that while “[t]he majority promises that its new test ‘does not mean anything goes,’ … that hardly tells us what does.” Id. at 3 (Gorsuch, J., concurring). As a result, he warned that the new test “may prove more forgiving than the old causation rule” in some cases and “more demanding” in others. Id. Both concurrences also suggested that the Supreme Court’s personal jurisdiction doctrine, developed in the first half of the last century, is not “well suited for the way in which business is now conducted” and may need to be rethought in light of fundamental changes to the nature of business. Id. at 1 (Alito, J., concurring); Id. at 2, 11 (Gorsuch, J., concurring).

Thus, in applying the majority’s approach, courts and practitioners will need to focus on defining the limits of in-forum conduct that is sufficiently “related to” a plaintiff’s claims to support the exercise of jurisdiction over the claims. The precise contours of the Court’s holding will need to be fleshed out in future decisions.

Footnotes

1) The Supreme Court recently denied a petition for certiorari to review a Seventh Circuit decision addressing this issue. Mussat v. IQVIA, Inc., 953 F.3d 441 (7th Cir. 2020), cert. denied, No. 20-510 (U.S. Jan. 11, 2021).

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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