All legal practitioners should be familiar with the concept of personal jurisdiction and its two subsets: general jurisdiction and specific jurisdiction; both of which are juxtaposed with the inalienable Due Process Clause which effectively and simultaneously restricts a given court’s authority to exercise personal jurisdiction over a defendant. It is no surprise that civil litigators are trained to instantly analyze and determine where a defendant corporation is headquartered and incorporated to ascertain whether a particular court maintains general jurisdiction. A substantial amount of time in contemplation is involved when analyzing the “sufficient minimum contacts” needed to advance specific jurisdiction arguments, or whether claims alleged “arise out of or even relate to” those minimum contacts in the first place.
In the past, the United States Supreme Court has generally held that under most circumstances a plaintiff cannot be the single solitary link between an out of state defendant and the state where the lawsuit was filed; the defendant’s conduct complained of must provide the requisite connection to the forum state. See Walden v. Fiore, 571 U.S. 227 (2014). And in cases combining several hundred plaintiffs, where a defendant corporation is not incorporated or does not have its principal place of business, the fact that several plaintiffs may be residents of the forum state and may have been injured by the defendant’s product in the forum state—alone—is not enough for a forum state court to maintain specific personal jurisdiction over the non-resident corporate defendant relative to maintaining a mass tort action. See Bristol-Myers Squibb Co. v. Super. Ct. of Cal., S.F. Cty., 137 S. Ct. 1773 (2017).
Especially when it comes to suing or defending large corporations from lawsuits, until recently , the United States Supreme Court had yet to decide the question of whether “[t]he Due Process Clause [of the Fourteenth Amendment] permits a state court to exercise specific personal jurisdiction over a non-resident defendant only when the plaintiff’s claims ‘arise out of or relate to’ the defendant’s forum activities.” Ford Motor Co. v. Montana Eight Judicial Dist. Court, Docket No. 19-368, Petition for Writ of Cert, p. i. (emphasis added). But now, this intricate issue has been decided.
On March 25, 2021, in a rare overwhelming majority (8-0), the United States Supreme Court affirmed the judgment of the Montana Supreme Court in Ford Motor Co. v. Montana Eighth Judicial District Court, et al., holding Ford Motor Co.’s acts of conducting business in Montana were “sufficiently related” to a product liability Plaintiff’s claims, giving Montana courts specific jurisdiction over Ford Motor Co. in the state of Montana.
In Ford v. Montana, the representative Plaintiff of the deceased filed suit against Ford Motor Co. in Montana State Court alleging claims of design defect strict liability, failure to warn strict liability, and negligence stemming from deadly car accident. Ford moved to dismiss the lawsuit arguing the Montana trial court lacked specific personal jurisdiction over it grounded by the belief that no link existed between Ford’s minimum contacts in Montana and the Plaintiff’s claims. But the trial court disagreed with Ford and denied the motion. On appeal, the Montana Supreme Court affirmed the denial of Ford’s Motion to Dismiss holding and ruled, inter alia:
- that Montana’s “long arm statute” allows for personal jurisdiction over tort defendants whose alleged torts were committed in Montana; and
- Ford invoked Montana’s laws by purposely availing itself of the privilege of selling Ford Motor Co. products in Montana by placing its products into Montana’s “stream-of-commerce.”
Subsequent to the Montana Supreme Court affirmation and denial of the Motion to Dismiss, Ford Motor Co. appealed, and the United States Supreme Court granted cert. to decide the dispute.
According to Ford, in order for the Montana trial court to maintain personal jurisdiction over it, Ford’s activities in Montana had to have a direct link or “give rise to” the Plaintiff’s claims of design defect strict liability, failure to warn strict liability, and negligence. In support, Ford argued that the Plaintiff’s unilateral decision to purchase, register, and operate a used Ford vehicle in Montana alone should not satisfy the specific jurisdiction requirement of existing “suit-related” contacts in a forum state. Ford insisted that its proposed “proximate-cause requirement,” established by the notion of equity and fairness, should require a corporate defendant to be hauled into court only in forums where “suit-related” contacts were created by the corporate defendant itself, e.g., Bristol-Myers Squibb Co. (“For specific jurisdiction, a defendant’s general connections with the forum are not enough. As we have said, a corporation’s continuous activity of some sort within a state . . . is not enough to support the demand that the corporation be amenable to suits unrelated to that activity.”). Candidly, Ford did not contest, that it does substantial business in Montana and actively seeks to serve the market for automobiles, products, and services in the state.
“arise out of or relate to”
Tactically, Plaintiff conceded that the customary legal term “arise out of or relate to” from landmark Supreme Court cases such as Helicopteros Nacionales de Columbia, S.A. does in fact suggest the presence of a causal connection requirement—but only when read together, as a phrase. However, when separated as two distinct separate phrases—“arise out of” and “relate to”—each fragment means something totally different; and in the past, the Court has disjoined the “arise out of or relate to” expression in its rulings holding that a causal connection for purposes of maintaining specific jurisdiction over a defendant was not compulsory, e.g., World-Wide Volkswagen Corp. (“The forum State does not exceed powers under the Due Process Clause if it asserts [specific] personal jurisdiction over a corporation that delivers its products into the stream of commerce with the expectation that they will be purchased by consumers in the forum State.”).
An infrequent all Justice majority held that Ford’s marketing, selling, and performance of maintenance on Ford vehicles while in Montana (including providing maintenance on the same types of vehicles that malfunctioned and formed the basis of the underlying product liability lawsuit) effectively promoted and urged Montana residents to purchase Ford vehicles, products, and services in Montana—and therefore, Ford’s acts of conducting business in Montana was “sufficiently related” to the Plaintiff’s claims to a degree that that Montana courts possess specific jurisdiction over Ford Motor Co. in the state of Montana.
Over the last several years, the Supreme Court has continued to refine the parameters of general and specific personal jurisdiction. Ford is sure to be added to the long list of key personal jurisdiction decisions like “Pennoyer v. Neff,” “International Shoe Co.,” “World-Wide Volkswagen Corp.,” “Goodyear Dunlop Tires,” “Daimler AG,” and “Walden v. Fiore”. Two factors seemed key to the Court’s ruling here in finding specific personal jurisdiction – (1) Ford’s marketing, general sales, and other activities in the jurisdiction; and (2) the accident and Plaintiff’s relationship to the jurisdiction. For civil litigators, this means that a challenge to personal jurisdiction may be an uphill battle even if the specific product was not designed, manufactured, or sold in a given jurisdiction if the company has otherwise purposely availed itself to the privileges of conducting business in that same jurisdiction.