Have You Considered Ford Lately? How to “Relate to” Specific Personal Jurisdiction, 1021 COBJ, Vol. 50, No. 9 Pg. 18

• Author: by James Juo
• Position: Vol. 50, 9 [Page 18]

50 Colo.Law. 18

Have You Considered Ford Lately? How to “Relate to” Specific Personal Jurisdiction

No. Vol. 50, No. 9 [Page 18]

Colorado Lawyer

October, 2021

THE CIVIL LITIGATOR

by James Juo

Specific personal jurisdiction requires that a defendant has purposefully availed itself of the benefits of doing business in a particular state (e.g., by expressly aiming conduct at that forum state) such that it may reasonably anticipate being haled into court there. But a plaintiff must also show that the claims brought against the defendant "arise out of or relate to" the defendant's activities in that state.' This article focuses on Ford Motor Co. v. Montana Eighth Judicial District Court,^[2] a recent US Supreme Court opinion that expands the considerations that "relate to" specific personal jurisdiction beyond those involving causation.

The Causation Backdrop

Traditionally, the phrase "arising out of" has been "given a broad reading such as 'originating from' or 'growing out of or 'flowing from' or 'done in connection with'—that is, it requires some causal connection to the injuries suffered, but does not require proximate cause in the legal sense."³

The Tenth Circuit has wrestled with what causation-based principles should be applied in the "arise out of or relate to" prong of the specific personal jurisdiction analysis.⁴ In Dudnikov v. Chalk and Vermilion Fine Arts, Inc.,^[5the Tenth Circuit noted that under a but for approach, "any event in the causal chain leading to the plaintiff's injury is sufficiently related to the claim to support the exercise of specific jurisdiction," but a proximate cause approach "is considerably more restrictive" in "examin[ing] whether any of the defendant's contacts with the forum are relevant to the merits of the plaintiff's claim."⁶ Some courts also have considered a third approach that "instead asks whether there is a 'substantial connection' or 'discernible relationship' between the contacts and the suit."⁷ Dudnikov rejected this third approach because it inappropriately blurred the distinction between specific and general jurisdiction.^[8] The Tenth Circuit then declined to choose between "but for" and "proximate" causation, finding that neither was outcome determinative for that case.⁹

Enter Ford Motor Co.

Against this backdrop, the US Supreme Court took up Ford Motor Co., a case concerning specific personal jurisdiction in two separate product liability lawsuits from Montana and Minnesota against Ford Motor Company (Ford). The lawsuits arose from car accidents in those states. The cars at issue had been sold initially in other states, but subsequent resales brought the vehicles to Montana and Minnesota. The state courts in each case held that there was specific personal jurisdiction over Ford because the accidents occurred in the state in which the suit was brought, the plaintiffs were residents of that state, and Ford did substantial business with respect to the allegedly defective vehicle model in each state.¹⁰

Ford argued that jurisdiction was improper because there was no causal connection between its specific activities and the alleged injuries. The cars were first sold in other states and were neither designed nor manufactured in the states where the accidents occurred, so there was no strict causal link, even though the alleged vehicle malfunctions occurred in the forum states. Because personal jurisdiction attaches only if the plaintiff's claims arose out of the defendant's forum conduct, Ford argued that specific jurisdiction was limited to "where the vehicles in question were assembled (Kentucky and Canada), designed (Michigan), or first sold (Washington and North Dakota), or where Ford is incorporated (Delaware) or has its principal place of business (Michigan)."¹¹

The US Supreme Court unanimously rejected this argument, but with a split in the reasoning, Justice Kagan's majority opinion explained that a strict causal relationship between a defendant's in-state activities and the litigation was not the only way to satisfy due process. Instead, the Court noted that the most common formulation of the minimum contacts rule for specific personal jurisdiction requires that the suit in question "arise out of or relate to the defendant's contacts with the forum."¹²While the first half of that standard focuses on causation, the second disjunctive half after the word "or" contemplates that some relationships will support jurisdiction without a strict causal showing.¹³

The Court noted that while Ford designed the cars in Michigan, "its business is everywhere."¹⁴ Ford's promotional marketing ("Have you driven a Ford lately?"); dealerships in Montana and Minnesota for selling, repairing, and maintaining Ford cars; and distribution of Ford replacement parts to auto shops in those two states and nationwide (urging consumers to "Keep your Ford a Ford") were all activities designed to "encourage Montanans and Minnesotans to become lifelong Ford drivers."¹⁵ Because Ford systematically served a market in Montana and Minnesota for the vehicles that the plaintiffs alleged malfunctioned and injured them in those states, there was "a strong 'relationship among the defendant, the forum, and the litigation'—the 'essential foundation' of specific jurisdiction."¹⁶ Ford's conduct as a global car company that extensively served the state market for vehicle models that were involved in an in-state accident was "a paradigm example"¹⁷ of how specific jurisdiction works.

The Court pointed out in a footnote that "[n]one of this is to say that any person using any means to sell any good in a State is subject to jurisdiction there if the product malfunctions after arrival," and that the Court's jurisprudence has "long treated isolated or sporadic transactions differently from continuous ones."¹⁸ But by firmly rejecting a strict causation approach, the Court's approach to the "relate to" prong in Ford Motor Co. has expanded the realm of factors that may be considered for purposes of establishing specific personal jurisdiction.

Distinguishing Precedent

The Court distinguished two of its recent decisions, Bristol-Myers Squibb Co. v. Superior Court of California^[19]and Walden v. Fiore,^[20]both of which Ford had cited in support of its position. These cases provide examples of contacts that were insufficient to establish personal jurisdiction.

In Bristol-Meyers, plaintiffs brought mass tort claims in California state court against Bristol-Myers Squibb, the manufacturer of the drug Plavix. The plaintiffs included nonresidents who had not been prescribed Plavixin California, had not ingested Plavix in California, and had not suffered their injuries in California.²¹ This violated the Fourteenth Amendment because the defendant's activities in the forum state lacked any connection to the plaintiffs' claims.²² "In short, the plaintiffs were engaged in forum-shopping—suing in California because it was thought plaintiff-friendly, even though their cases had no tie to the State."²³ The plaintiffs' lack of any real relationship with the forum state thus doomed the "arising out of or relating to" prong for specific jurisdiction.

In Walden, a Georgia police officer searched and...