Michigan Court Weighs In On Specific Personal Jurisdiction

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[co-author: Lazaro Aguiar ]

In Murphy v. Viad Corporation, the United States District Court for the Eastern District of Michigan recently considered the issue of specific personal jurisdiction in the context of asbestos claims under the standard set forth by the Supreme Court of the United States in its recent decision in Ford Motor Co. v. Mont. Eighth Judicial Dist. Court. In doing so, the Court reinforced that specific jurisdiction cannot be established where the products at issue were never sold or marketed in that forum.

Background

On April 21, 2021, Timothy Murphy (“Murphy” or “Plaintiff”) filed an asbestos-related product liability action in the United States District Court for the Eastern District of Michigan after being diagnosed with asbestosis in 2018. Murphy alleged asbestos exposure while serving in the US Navy aboard the USS Frank E. Evans (“Evans”) in the 1960s while stationed in Long Beach, California. Murphy sued Defendant Viad Corporation (“Viad”) for liabilities related to freshwater distilling equipment manufactured by Griscom-Russell that was installed aboard the Evans. In his Complaint, Plaintiff asserted that the Court had specific personal jurisdiction over Viad; Plaintiff never claimed that the court had personal jurisdiction via general jurisdiction. Viad subsequently filed a motion to dismiss for lack of personal jurisdiction.

Court’s Decision

The Court began its analysis by stating that in order to demonstrate specific jurisdiction over a Defendant, Plaintiff’s claims must satisfy both Michigan’s long-arm statute and constitutional due process. Here, using the three-prong test established by the 6th Circuit Court of Appeals, the Court determined that specific jurisdiction would be established if:

(1) Viad purposefully availed Michigan;

(2) The cause of action must arise from Viad’s activities in Michigan; and

(3) There is a substantial connection between Viad and Michigan such that exercise of personal jurisdiction is reasonable.

See Intera Corp. v. Henderson, 428 F. 3d 605 (6th Cir.) Plaintiff argued that Viad’s predecessor, Griscom-Russell, manufactured and distributed hundreds of thousands of products from 1912 – 1964 into the stream of commerce and such products specifically flowed into the state of Michigan. Moreover, Plaintiff argued that Defendant “marketed and sold a fungible heat exchanger product line in Michigan and encouraged local businesses to purchase heat exchangers.” While the Court noted that Plaintiff’s complaint lacked “specificity”, the Court nonetheless found that Viad arguably purposefully availed itself of the privileges of Michigan by its transactions in the state, even if these transactions related to a different product than the one that allegedly caused Plaintiff’s injuries.

The Court noted, however, that purposeful availment alone is not sufficient to confer specific jurisdiction, and that there must still exist a substantial connection between Viad and Michigan such that exercise of personal jurisdiction is reasonable. In order for a substantial connection to exist, Plaintiff’s claims must “arise out of” or “relate to” Defendant’s contacts in the state. See Ford Motor Co. v. Mont. Eighth Judicial Dist. Court, 141 S. Ct. 1017 (2021). Plaintiff maintained that, under the Supreme Court’s recent decision in Ford Motor Co. v. Mont. Eighth Judicial Dist. Court, Defendant’s relationship with Michigan was sufficient to establish specific jurisdiction. In Ford, the Supreme Court found that the defendant was subject to personal jurisdiction in Montana for claims arising out of an accident involving one of its vehicles simply because (1) the accident occurred in Montana and (2) the defendant did substantial business by advertising, selling, and servicing the model of the plaintiff’s vehicle in Montana. Therefore, the Supreme Court found that the defendant had a strong relationship with the forum state and the claims related to defendants conduct in Montana.

In the instant case, Plaintiff argued that Viad’s relationship with Michigan was akin to Ford’s contacts with Montana. First, Plaintiff claimed that Viad’s predecessor allegedly targeted Michigan consumers by selling certain asbestos-containing products (heat exchangers) into the state. Second, Plaintiff alleged that Viad’s predecessor produced the asbestos-containing distilling equipment aboard the naval vessel that Plaintiff was exposed to. The Court, however, determined that Plaintiff’s allegations were insufficient to establish specific jurisdiction against Defendant in Michigan. Unlike Ford, where the defendant did substantial business by advertising, selling, and servicing the type of product at issue in the forum state, neither Viad nor their predecessor ever marketed or sold any freshwater distilling equipment in Michigan. Defendants conduct in the state of Michigan pertained to a completely unrelated product line and, as such, the Court determined Viad had no reasonable expectation of being haled into a Michigan court for claims related to its freshwater distilling equipment that was never sold or marketed in the forum state. The Court noted that the fact that two distinct products both contained asbestos has no bearing on the propriety of Michigan exercising personal jurisdiction over Defendant. In such circumstances, the Supreme Court has made clear “specific jurisdiction is lacking regardless of the extent of a defendant’s unconnected activities in the State.” Bristol-Myers Squibb Co. v. Superior Ct. of California, San Francisco Cty., 137 S. Ct. 1773; accord Ford Motor Co., 141 S. Ct. at 1031.

Take Away

Although some have speculated that the Supreme Court’s “related to” standard articulated in Ford will greatly expand specific jurisdiction when dealing with large, national corporations doing business throughout the United States, this decision serves as a reminder of the limitations to personal jurisdiction under the Supreme Court’s jurisprudence set forth in Goodyear, Daimler, and Bristol-Myers. The fact that an unrelated product line may be marketed and sold by a Defendant into the forum does not create specific personal jurisdiction over that defendant; the specific product (or type of product) at issue needs to be the source of the defendant’s contacts within the forum.

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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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