Civil Procedure: Personal Jurisdiction Post-ford Motor Company v. Montana Eighth Judicial District Court
| Publication year | 2021 |
| Author | Ben Siminou |
AUTHORS*
Ben Siminou
Julia C. Shear Kushner
Personal jurisdiction is the double-edged sword of civil justice: Without it, courts are powerless to redress grievances or compensate the injured.1 But when unduly exercised, personal jurisdiction becomes an injustice unto itself.2 For most practitioners, "personal jurisdiction" is synonymous with the U.S. Supreme Court's decision in International Shoe, the law-school staple that made "minimum contacts" the touchstone of personal jurisdiction.3 But while it is well known that personal jurisdiction requires "minimum contacts" with the forum state, less clear is what qualifies. California courts have been on the frontlines of recent efforts to answer that question.
For example, the U.S. Supreme Court's 2014 decision in Daimler AG v. Bauman4 arose out of a lawsuit in California federal court against the foreign manufacturer of Mercedes-Benz vehicles (Daimler) based on allegations that its "Argentinian subsidiary, Mercedes-Benz Argentina (MB Argentina) collaborated with state security forces to kidnap, detain, torture, and kill certain MB Argentina workers."5 By a 2-to-1 vote, the Ninth Circuit recognized general jurisdiction over Daimler in California.6 But the U.S. Supreme Court disagreed, holding that corporations are typically only subject to general jurisdiction in two locations: their "place of incorporation and principal place of business."7
Similarly, the U.S. Supreme Court's 2017 decision in Bristol-Meyers Squibb v. Superior Court8 arose out of a lawsuit in California state court against a New Jersey-based pharmaceutical manufacturer by a group of plaintiffs claiming personal injury from a Bristol-Myers drug, most of whom resided
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(and were injured) in other states. By a 4-to-3 vote, the California Supreme Court recognized specific jurisdiction over Bristol-Myers in California.9 But the U.S. Supreme Court disagreed, holding that "the California approach" to specific jurisdiction—in which "the strength of the requisite connection between the forum and the specific claims at issue is relaxed if the defendant has extensive forum contacts that are unrelated to those claims'—amounted to "a loose and spurious form of general jurisdiction."10
Given that Daimler and Bristol-Meyers both entailed the U.S. Supreme Court replacing a California-based appellate court's expansive view of personal jurisdiction with a narrower one, practitioners might assume this pattern would recur when the U.S. Supreme Court issued its much-anticipated decision in Ford Motor Company v. Montana Eighth Judicial District Court.11 But it appears the trend has reversed: Whereas Ford embraces a more expansive view of specific jurisdiction, California appellate courts continue to cling to the old, narrow view of specific jurisdiction.
Before turning to Ford, this article provides a brief refresher on personal jurisdiction Ever since International Shoe, American courts "have sought to divide the world of personal jurisdiction in two": general jurisdiction and specific jurisdiction.12
As the name implies, a court with general, all-purpose jurisdiction "may hear any claim against that defendant, even if all the incidents underlying the claim occurred in a different State."13 But while defendants subject to general jurisdiction are exposed to a broad array of claims, general jurisdiction only exists in one very narrow circumstance: A defendant is only subject to general jurisdiction where the defendant is "at home."14 And for the most part, a defendant is only ever "at home" (and thus subject to general jurisdiction) "in her place of domicile."15 For a real person, this is the place where she resides; for a corporation, this is generally limited to "its place of incorporation and principal place of business."16
Unlike general jurisdiction, specific (or "case-linked") jurisdiction "covers defendants less intimately connected with a State, but only as to a narrower class of claims."17 Today, "specific jurisdiction has become the centerpiece of modern jurisdiction theory, while general jurisdiction plays a reduced role."18
Courts apply a three-part test to determine whether a defendant is subject to specific jurisdiction in a particular forum: First, the defendant must have "purposefully availed himself or herself of forum."19 Second, "the claim or controversy must relate to or arise out of the defendant's forum-related contacts."20 Third, "the exercise of jurisdiction must be fair and reasonable."21 The party asserting jurisdiction (generally, the plaintiff or petitioner) bears the burden to establish the first two elements; if it does so, the burden shifts to the party opposing jurisdiction (generally, the defendant or respondent) to rebut the third.22
Of the three elements, the second—whether a sufficient link exists between the controversy at hand and defendant's contacts with the forum state—has arguably fostered the most ongoing uncertainty in modern personal-jurisdiction jurisprudence.23 Not coincidentally, it was the subject of the Court's decision in Ford.
Ford arose out of two separate product-liability lawsuits relating to accidents involving two different Ford vehicles. The first arose when a tire on a Ford Explorer failed, causing the vehicle to lose control and crash into a ditch, killing the driver.24 Because the decedent was a Montana resident and the crash occurred in Montana, the corresponding wrongful-death lawsuit against Ford was brought in Montana state court.25 The second case arose when a Ford Crown Victoria lost control on an icy road and crashed into a ditch, resulting in serious injuries to a passenger when his air bag failed to deploy.26 Because the passenger was a Minnesota resident and the crash occurred in Minnesota, the
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corresponding personal-injury lawsuit against Ford was brought in Minnesota state court.27
Ford challenged personal jurisdiction in both cases. In doing so, Ford did not dispute the first element of the three-part test. Indeed, Ford readily conceded "that it has 'purposefully avail[ed] itself of the privilege of conducting activities' in both [states]."28 And it was obvious why: "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) Explorers and Crown Victorias. 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. And apart from sales, Ford works hard to foster ongoing connections to its cars' owners. The company's dealers in Montana and Minnesota (as elsewhere) regularly maintain and repair Ford cars, including those whose warranties have long since expired. And the company distributes replacement parts both to its own dealers and to independent auto shops in the two States."29
Instead, Ford disputed the second element of the test (i.e., whether the lawsuits "relate to or arise out of" Ford's activities in Montana and Minnesota).30 Ford argued that a lawsuit can only ever "relate to or arise out of" a defendant's in-forum activities if those activities were "a but-for cause of the tort plaintiff's injury."31 In the context of a product-defect lawsuit, "a causal test would put jurisdiction in only the States of first sale, manufacture, and design."32 And it was undisputed that neither Montana or Minnesota fell into those categories: The Ford Explorer at issue was designed in Michigan, manufactured in Kentucky, and first sold in Washington.33 And the Ford Crown Victoria at issue was designed in Michigan, manufactured in Canada, and first sold in North Dakota.34 But the trial courts in both cases rejected Ford's narrow view of specific jurisdiction and denied its motions to quash; decisions that were subsequently affirmed by courts of last resort in both Montana and Minnesota.35 Ford then petitioned the U.S. Supreme Court, which granted certiorari only to affirm.
Justice Kagan wrote the opinion for a five-member majority. The Court expressly rejected the notion that "only a strict causal relationship between the defendant's in-state activity and the litigation" will satisfy the requirement that a lawsuit must "arise out of or relate to" a defendant's in-forum activities.36 As the Court explained, while "[t]he first half of that standard asks about causation," the "back half" (i.e., the "or relate to" language) "contemplates that some relationships will support jurisdiction without a causal showing."37 Accordingly, the Court held that the second element of the "specific jurisdiction inquiry" does not require "proof that the plaintiff's claim came about because of the defendant's instate conduct."38 As support, the Court cited its 1980 decision in World-Wide Volkswagen Corporation v. Woodsen,39 where "the Court made clear that systematic contacts in Oklahoma rendered Audi accountable there for an in-state accident, even though it involved a car sold in New York."40 In the majority's view, World-Wide Volkswagen showed that an auto manufacturer that purposefully avails itself of the auto market in a foreign state is subject to suits in that state "arising from local accidents involving its cars," even if the car was not designed, manufactured, or sold in that state.41
Justice Alito concurred in the judgment. In his view, Montana and Minnesota "easily" had jurisdiction over Ford under a causation test because one could "infer that the vehicles in question here would never have been on the roads in Minnesota and Montana" if those models "had never been advertised in those States," and "could not have been easily repaired with parts available in those States."42 Justice Alito concurred because he questioned the majority's decision to recognize personal jurisdiction in cases...
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