FORD MOTOR CO. V. MONTANA EIGHTH JUDICIAL DISTRICT COURT AND "CORPORATE TAG JURISDICTION" IN THE PENNOYER ERA.

• Author: Borchers, Patrick J.

CONTENTS INTRODUCTION I. JUSTICE GORSUCH'S CONCURRENCE IN THE JUDGMENT II. PENNOYER AND ITS MYSTERIES III. NEW YORK'S POPE RULE AND CORPORATE TAG JURISDICTION A. Pope in New York B. Pope and Corporate Tag Jurisdiction Elsewhere IV. SOLUTIONS A. General Law B. Leave it to the States C. Federal Positive Law D. Unite Jurisdictional and Procedural Due Process CONCLUSION INTRODUCTION

A perfectly reasonable response to reading the title might be: who cares? Pennoyer v. Neff (1) was decided in 1878. Since 1945, the "minimum contacts" test has governed personal jurisdiction. (2) What difference does jurisdictional law regarding corporations around the time of Pennoyer make? (3) It's a fair question. However, Justices Gorsuch and Thomas care. (4) Justice Alito seems to as well. (5) Other Justices might come to care. If they care enough, it might usher in a revolutionary change in the Supreme Court's jurisdictional jurisprudence with the promise of greater predictability and fairer results.

Professor Linda Silberman coined the term "tag" jurisdiction to describe the phenomenon of individual defendants being subject to in personam jurisdiction if served with process while in the forum state, no matter how briefly or for what purpose. (6) Once thought to be on the constitutional rocks, (7) in 1990 the Supreme Court unanimously upheld tag jurisdiction over an individual defendant while in the forum state for three days on personal business. (8) "Corporate tag jurisdiction"--as I use the term means obtaining in personam jurisdiction over a corporation by serving a corporate officer, agent or representative while the recipient is in the forum state. (9)

Here a distinction between "casual" and "business" corporate tag jurisdiction becomes crucial. Casual corporate tag jurisdiction is the assertion of jurisdiction over a corporation based on forum-state service of a corporate officer or agent, even if that officer or agent is in the state on personal business and the corporation has no significant presence in the forum state. (10) Business corporate tag jurisdiction is the assertion of jurisdiction based upon forum-state service on an officer while there on corporate business or on a designated agent for service of process, if the corporation has a significant forum-state presence. (11)

Corporations are now likely impossible to tag either in the casual or business sense. (12) Some debate continues as to whether Justice Holmes's century-old opinion in Pennsylvania Fire Insurance Co. v. Gold Issue Mining & Milling Co., (13) allowing states to assert business corporate tag jurisdiction, remains good law. (14) Squaring business tag (to say nothing of casual tag) with recent Supreme Court cases drastically limiting state-court general jurisdiction (15) over corporations is--to put it mildly--a challenge. (16) But before the Supreme Court's decision in Pennoyer, and well after, corporations were fairly easy to tag. States widely allowed business corporate tag, (17) and some allowed casual tag. (18) Ford Motor Co. v. Montana Eighth Judicial District Court (19) provides a reason to think again about corporate tag jurisdiction in all its forms. In its seventh personal-jurisdiction opinion since 2011, the Supreme Court found (in two consolidated cases) that defendant Ford Motor Company had minimum contacts with the forum states in products-liability actions brought by plaintiffs injured there by Ford's vehicles. (20) After six straight Supreme Court victories for defendants, (21) plaintiffs got one in the win column--this time unanimously. The majority opinion held Ford's forum-state contacts were purposeful and sufficiently related to the plaintiffs' suits to allow specific jurisdiction, (22) even though the allegedly defective vehicles were initially sold in another state and reached the forum state via private resales. (23) Justice Alito "quibble[d]" with the majority's definition of a related contact and so concurred only in the judgment. (24)

Then came Justice Gorsuch's concurrence in the judgment, joined by Justice Thomas. (25) Justice Gorsuch, like Alito, did not join the majority's minimum-contacts analysis, even though he concluded Ford Motor Company had minimum contacts with the forum states. (26) However, in the second part of his opinion, he questioned on textualist and originalist grounds the foundations of the minimum-contacts test and wondered about the legitimacy of the solicitous treatment corporate defendants receive under modern jurisdictional law. (27)

In this article I devote little attention to the Court's competing minimum-contacts analyses. I do not denigrate scholarly attention to this aspect of Ford, but it surely will receive thorough examination in other law review articles. Instead, I focus on Justice Gorsuch's tentative inquiry into the originalist case--or lack thereof--for imposing significant due-process constraints on state-court jurisdiction, particularly over corporations.

In Part I, I review the second portion of Justice Gorsuch's opinion. In Part II, I review the Pennoyer-era Supreme Court jurisdictional cases and related scholarship; I conclude, as I have before, that the conventional view of Pennoyer--establishing the Due Process Clause itself as a limitation on state-court jurisdiction--might be a "giant misunderstanding." (28) In Part III, I examine state decisions on corporate tag jurisdiction (particularly casual tag) in the time immediately following Pennoyer to see what lessons can be learned from the now-severe restraints on state-court long-arm jurisdiction over out-of-state corporations. I focus on New York's Pope (29) rule, which allowed casual corporate tag jurisdiction (in Pope, the corporate president was served while passing through New York on family vacation). (30) Finally, in Part IV, I address what might come if the Supreme Court were to accept the invitation of Justice Gorsuch--and that of some law professors (including me)--to fundamentally reconsider jurisdictional due process. I suggest that, rather than continuing to attempt to refine the doctrinally suspect minimum-contacts test, it be abandoned and jurisdictional due process be united with procedural-due-process norms.

Justice Gorsuch is on the right track. Termites infest the house of constitutionalized personal jurisdiction and the minimum-contacts test. Recent scholarship has laid bare its practical shortcomings. (31) A growing body of work shows that the conventional account of Pennoyer invoking the Due Process Clause to "fix[] in constitutional amber" (32) the then-accepted general bases of personal jurisdiction is at best highly problematic. (33) If the house collapses, something better might be built in its place.

1. JUSTICE GORSUCH'S CONCURRENCE IN THE JUDGMENT

   In Ford, Justice Gorsuch, joined by Justice Thomas, concurred in the judgment, finding Ford Motor Company subject to jurisdiction in the forum states. (34) The second part of his opinion focused on the original understanding of the Fourteenth Amendment and its intended limitations (if any) on jurisdiction over out-of-state corporations. (35) Justice Gorsuch wondered why current law allows tag jurisdiction over individuals, but probably not corporations, although it once did in some circumstances. (36)

   Early in his concurrence, Gorsuch described the "old guardrails" of the minimum contacts test as "look[ing] a little battered." (37) After critiquing the majority's minimum-contacts analysis, he suggested, "it's hard not to ask how we got here and where we might be headed." (38) Justice Gorsuch began by observing that, pre-International Shoe, "it seems due process was usually understood to guarantee that only a court of competent jurisdiction could deprive a defendant of his life, liberty, or property." (39)

   By "competent jurisdiction" Justice Gorsuch presumably meant a court having both personal and subject-matter jurisdiction, though his emphasis was on the former. However, competence is a commonly used term for subject-matter jurisdiction (40) and Pennoyer--in its famous due-process paragraph--cited personal and subject-matter jurisdiction cases. (41) The concurrence continued: "In turn, a court's competency normally depended on the defendant's presence in, or consent to, the sovereign's jurisdiction." (42)

   Pausing here to consider these two critical sentences, Justice Gorsuch must mean that, pre-International Shoe, the Due Process Clause was not universally understood to require states to adhere to any particular jurisdictional regime. Otherwise, his use of "normally" would make no sense. State courts don't just "normally" follow constitutional decisions of the United States Supreme Court; ever since the Supreme Court declared itself the final arbiter of the meaning of the Constitution, states must adhere to its decisions. (43) For instance, when the Supreme Court announced a constitutional right to same-sex marriage, it became the rule in all fifty states, regardless of what state law might say. (44)

   In an important article cited by Justice Gorsuch, Professor Sachs argues that Pennoyer's invocation of the Due Process Clause gave defendants the constitutional right to enforce the general law of jurisdiction on direct--not just collateral--attack, but due process did not create jurisdictional rules. (45) By general law he means the law--drawn from English common law, customary international law, and other sources--that federal courts heavily participated in developing prior to Erie Railroad Co. v. Tompkins. (46) In a 1990 article, I advanced a related thesis. (47) I argued that Pennoyer is open to a "limited" interpretation. (48) Under this limited view of Pennoyer, due process guaranteed a defendant a chance to challenge state-court jurisdiction under state law. (49) I suggested that it would be practically wiser, and doctrinally sound, if the Court would pull back due process to invalidate state-court assertions of jurisdiction only if the...