Of car accidents and specific jurisdiction in US courts

Supreme Court of the United States, c. FORD MOTOR CO. v. MONTANA EIGHTH JUDICIAL DISTRICT COURT ET AL., March 25, 202

Ford Motor, a global auto company, incorporated in Delaware and headquartered in Michigan, markets, sells, and services its products across the United States and overseas. It also encourages a resale market for its vehicles. In each of these two cases, a state court exercised jurisdiction over Ford in a products-liability suit stemming from a car accident that injured a resident in the State. The first suit alleged that a 1996 Ford Explorer had malfunctioned, killing Markkaya Gullett near her home in Montana. In the second suit, Adam Bandemer claimed that he was injured in a collision on a Min-nesota road involving a defective 1994 Crown Victoria.

Ford moved to dismiss both suits for lack of personal jurisdiction, arguing that each state court had jurisdiction only if the company’s conduct in the State had given rise to the plaintiff’s claims. And that causal link existed, according to Ford, only if the company had designed, manufactured, or sold in the State the particular vehicle involved in the accident. In neither suit could the plaintiff make that showing: the vehicles were designed and manufactured elsewhere, and the company had origi-nally sold the cars at issue outside the forum States. Only later resales and relocations by consumers had brought the vehicles to Montana and Minnesota.

Both States’ supreme courts rejected Ford’s argument. Each held that the company’s activities in the State had the needed connection to the plaintiff’s allegations that a defective Ford caused in-state injury.

The Supreme Court held the the connection between the plaintiffs’ claims and Ford’s activities

in the forum States was close enough to support specific jurisdiction.

The Court reminds that the Fourteenth Amendment’s Due Process Clause limits a state court’s power to exercise jurisdiction over a defendant. In International Shoe Co. v. Washington, the Court held that a tribunal’s authority depends on the defendant’s having such “contacts” with the forum State that “the maintenance of the suit” is “reasonable” and “does not offend traditional notions of fair play and substantial justice.” In applying that formulation, the Court has long focused on the nature and extent of “the defendant’s relationship to the forum State.” That focus has led to the recognition of two types of personal jurisdiction: general and specific jurisdiction.

A state court may exercise general jurisdiction only when a defendant is “essentially at home” in the State. Specific jurisdiction covers defendants less intimately connected with a State, but only as to a narrower class of claims. To be subject to that kind of jurisdiction, the defendant must take “some act by which [it] purposefully avails itself of the privilege of conducting activities within the forum State.” And the plaintiff’s claims “must arise out of or relate to the defendant’s contacts” with the forum.

Ford admitted that it has “purposefully avail[ed] itself of the privilege of conducting activities” in both States but claimed that those activities were insufficiently connected to the suits. In Ford’s view, due process requires a causal link locating jurisdiction only in the State where Ford sold the car in question, or the States where Ford designed and manufactured the vehicle. And because none of these things occurred in Montana or Minnesota, those States’ courts have no power over these cases.

Ford’s causation-only approach however found no support in this Court’s requirement of a “connection” between a plaintiff’s suit and a defendant’s activities. The most common formulation of that rule demands that the suit “arise out of or relate to the defendant’s contacts with the forum.” The second half of that formulation, following the word “or,” extends beyond causality. So the inquiry is not over if a causal test would put jurisdiction elsewhere. Another State’s courts may yet have jurisdiction, because of a non-causal “affiliation between the forum and the underlying controversy, principally, [an] activity or an occurrence involving the defendant that takes place within the State’s borders.” As a matter of fact, the Supreme Court has stated that specific jurisdiction attaches in cases identical to this one when a company cultivates a market for a prod-uct in the forum State and the product malfunctions there: see World-Wide Volkswagen Corp. v. Woodson, 444 U. S. 286. Because Ford had systemati-cally served a market in Montana and Minnesota for the very vehicles that the plaintiffs allege malfunctioned and injured them in those States, there is a strong “relationship among the defendant, the forum, and the litigation” —the “essential foundation” of specific jurisdiction. According to the Court, allowing jurisdiction in these circumstances both treats Ford fairly and serves principles of “interstate federalism.”

Unlike in Bristol-Myers and Walden v. Fiore, 571 U. S. 277 (where the Court found jurisdiction improper because the forum State, and the defendant’s activities there, lacked any connection to the plaintiffs’ claims), in the cases at hand, the plaintiffs were residents of the forum States, used the allegedly defective products in the forum States, and suffered injuries when those products malfunctioned there.

In conclusion, Ford, had a host of forum connections and the place of a plain-tiff’s injury and residence may be relevant in assessing the link be-tween those connections and the plaintiff’s suit. 

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