On March 25, 2021, the United States Supreme Court unanimously held that the doctrine of specific personal jurisdiction does not turn solely on whether the defendants' activities in the forum state “gave rise to” the plaintiff’s claims. Instead, a court may exercise personal jurisdiction in certain cases where the defendant’s in-state activities bear a sufficient connection to the plaintiff’s claims to make the exercise of jurisdiction fair and reasonable. While Ford addressed jurisdiction in the context of a product liability case, it threatens to expand jurisdiction in other types of cases and in unforeseen ways. Importantly, the plaintiffs’ and defense bars have already voiced divergent views about the import of the Court’s ruling, and (as Justice Gorsuch noted in his concurrence) Ford promises to sew confusion as lower courts grapple with its reasoning.
- As background, the doctrine of specific personal jurisdiction applies only if the forum state has some connection to the plaintiff’s claims. When assessing specific jurisdiction, courts traditionally examine whether (1) the defendant purposefully directed its activities to the forum state; (2) the claims “arise out of or relate to” the defendant’s forum activities; and (3) the assertion of jurisdiction is reasonable or fair. The Supreme Court’s opinion focuses on the second prong of this test.
- This opinion was issued in the consolidated appeal of two product liability suits against Ford Motor Company. One case was filed in Minnesota and the other in Montana. Both were filed in the state in which the respective plaintiff lived and was allegedly injured. Although Ford generally sells cars in both states, including the models involved in the accidents, Ford did not sell the plaintiffs’ cars in Minnesota or Montana, nor were the cars designed or manufactured there. Only later resales and consumer relocations brought the vehicles to the forum states.
- Ford moved to dismiss both cases for lack of personal jurisdiction, arguing that each state court could only exercise jurisdiction if the company’s conduct in the state gave rise to the resident plaintiff’s claims. According to Ford, that causal link only existed if the company designed, manufactured, or sold the particular cars at issue in the forum states. Both state supreme courts rejected Ford’s argument.
- The Supreme Court affirmed, holding that Ford’s activity in the forum states was “close enough” to support specific personal jurisdiction. Justice Kagan wrote the majority opinion, joined by Chief Justice Roberts and Justices Breyer, Sotomayor, and Kavanaugh. The majority stated that “[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.” Focusing on the “arise out of or relate to” prong of the specific personal jurisdiction test, the majority held—for the first time—that “relate to” has a different (and broader) meaning than the “arise out of” component. According to the Court, the “relate to” component “contemplates that some relationships will support jurisdiction without a causal showing.” Applying this new test, the majority concluded that Ford’s service of Montana and Minnesota markets for the car models at issue created a sufficiently “strong” relationship to establish specific jurisdiction.
- Justices Alito, Gorsuch, and Thomas agreed with the outcome but disagreed with the majority’s analysis. Justice Alito rejected the Court’s separation of the “arise out of” and “relate to” components, cautioning that “[t]his innovation is unnecessary and, in my view, unwise.” Justice Gorsuch, joined by Justice Thomas, seemed to call for a full overhaul of personal jurisdiction jurisprudence for a modern era “when corporations with global reach often have massive operations spread across multiple States.” He also faulted the majority for providing little clarity regarding what kind of forum connection could satisfy the new “relate to” test.
- The Supreme Court’s ruling seemingly creates a new standard for personal jurisdiction that only requires a defendant’s in-state activities to “relate to” the plaintiff’s claims—which, at least in some instances, does not require a causal connection. While the majority stated that this conception of “relate to” still “incorporates real limits,” it did not specify what those limits are. As Justice Gorsuch noted, this articulation of the standard lacks clarity and will undoubtedly generate significant confusion in the lower courts.
- That said, the opinion may not represent the sea change that the plaintiffs’ bar will undoubtedly claim it to be. For starters, the Court distinguished the facts of the case from its watershed opinion in Bristol-Myers Squibb Co. v. Superior Court, 137 S. Ct. 1773 (2017). In that case, the Court explained that specific personal jurisdiction was lacking because “the forum State, and the defendant’s activities there, lacked any connection to the plaintiffs’ claims,” as the plaintiffs were not residents of the forum state, had not used the products there, and were not injured there—none of which was true in Ford. Thus, unlike in Bristol-Myers, the Ford plaintiffs were not “engaged in forum-shopping” but instead brought suit “in the most natural State” (i.e., where the affiliation between the forum and underlying controversy was strongest). Moreover, the Court in Ford reiterated that its holding was limited to the (arguably extreme) facts of the case and did not imply that “any person using any means to sell any good in a State is subject to jurisdiction there if the product malfunctions after arrival.” The majority stressed that, while Ford engaged in “a raft of … in-state activities,” the Court’s personal jurisdiction jurisprudence has “long treated isolated or sporadic transactions differently from continuous ones.” Ultimately, therefore, a court’s determination of whether a defendant’s in-state activities are sufficiently “case-linked” to give rise to specific jurisdiction will remain a fact-bound inquiry.
- The Supreme Court’s opinion in Ford Motor Co. v. Montana Eighth Judicial District, No. 19-369, is available here.