Is a Corporation’s Home Still its Castle? An Update on Developments in Personal Jurisdiction Case Law

When a defendant has been sued, one of the first steps it should take is to ask whether the court even has authority to hear the complaint. This is a requirement that a defendant must?address at the outset of a case, or else its rights not to be subject to that court may be waived.

A court’s authority over a corporate defendant is broadest where the corporation is at home—which, as recent cases have instructed, means where it is incorporated, or where it has its principal place of business. Where lawsuits are brought in other states, courts must evaluate whether the corporation has sufficient contacts with the state, and whether the lawsuit sufficiently arises from or relates to those contacts, to allow the suit to proceed against the out-of-state corporate defendant.

A recent Supreme Court case, Ford Motor Co. v. Montana Eighth Jud. Dist. Ct, clarified courts’ authority over defendants in cases where the claims relate to the defendant’s contacts in a foreign state. In that case, the company’s contacts with the state, including marketing and selling the very kinds of vehicles that were at issue, were so extensive and systematic that the courts of those states could exercise jurisdiction over it, even though the company had not actually sold the specific vehicles at issue in those states. Some Justices, though agreeing with the majority’s decision, voiced concerns that the decision might actually make the applicable standards less clear, and called on lower courts to provide needed guidance.

Since the Ford decision, thousands of cases have considered and applied its ruling. These later decisions show, in some instances, clear fault lines that show when personal jurisdiction is and is not established. But in other instances, the differences were matters of degree rather than kind; the defendants’ contacts in the state simply did not rise to the level of Ford’s. It is simple enough to tell the difference between a megalithic corporation like Ford and small mom-and-pop-type shops; but exactly where on the spectrum between them the line is to be drawn remains unclear. The concurring justices’ questions have yet to be fully answered.

In light of these decisions, the decision of where to incorporate remains a meaningful factor corporations should consider in the context of mitigating the risk of litigation. But corporations should nevertheless be aware of an increasing risk that extensive contacts outside of their home states may permit out-of-state courts to exercise authority over cases against them.

Bristol-Myers Squibb and Other Background Cases

The ACC Docket’s May 2020 edition included an article, “Home is Where You’re Incorporated,” that discussed developments in the law on personal jurisdiction, the authority of a court to exercise power over a specific defendant in a case.

To recap that article, recent United States Supreme Court cases—in particular, Bristol-Myers Squibb Company v. Superior Court of California, San Francisco County—reinforced important limits on when a court could exercise jurisdiction over a defendant that was not a resident of the forum state. First, when a court has “general jurisdiction” over a defendant, it can hear claims of any kind against the corporation. But a court can exercise general jurisdiction over a corporate defendant only where the defendant is a resident of the state—as, for corporations, when they are incorporated under that state’s laws, or have their primary place of business in that state. If the defendant is not a resident of the state, the Court can exercise only “specific jurisdiction” over the defendant. This requires some sort of affiliation between the forum and the underlying controversy, meaning that the case must arise from or relate to the defendant’s contacts with the state.

These cases scaled back in a significant way the prior understanding of an out-of-state court’s jurisdictional reach. Even extensive operations and presence within a state would not be enough to render a corporation “at home” beyond its state of incorporation or primary place of business; lawsuits brought in those other states therefore had to fit the narrower test for specific jurisdiction, or be subject to dismissal. This, predictably, has limited plaintiffs’ ability to shop for friendly forums and driven litigation toward defendants’ home forums, making even more important the decision of where corporations should be located.

Ford Motor Co.

The United Supreme Court then issued Ford Motor Co. v. Montana Eighth Jud. Dist. Ct., 141 S.Ct. 1017 (Mar. 25, 2021).

In Ford, plaintiffs in Minnesota and Montana brought suit in their respective states, alleging that defects in their Ford vehicles caused accidents resulting in harm in those states. But in both cases, Ford sold the allegedly defective cars in other states; the cars’ defects led to the accidents only after moving to Montana and Minnesota, where they were resold to the plaintiffs.

Ford argued that because neither injury arose from actions Ford undertook in those states, neither Montana nor Minnesota had specific personal jurisdiction over it, and the lawsuits therefore could not proceed. True, Ford operates in both states, advertising, selling, and servicing Ford vehicles—including the very models that were at issue. But Ford’s manufacture and sale of the specific vehicles involved occurred entirely outside of those states. Ford therefore argued that it did not have sufficient contacts with those states for the respective courts to exercise specific jurisdiction over it in those cases. In other words, Ford suggested that for a court to exercise specific jurisdiction over a defendant, there must be a “causal relationship” between the defendant’s contacts and the specific litigation.

The Supreme Court disagreed. Specific jurisdiction, the Court noted in a majority opinion authored by Justice Kagan, requires a plaintiff to show that the defendant “purposefully avails itself of the privilege of conducting activities within the forum state.” Id. at 1025. The plaintiff must also show that its claims “arise out of or relate to the defendant’s contacts” with the forum. Id. (quoting, among others, Bristol-Myers, 137 S.Ct., 1780). “The first half of that standard,” the Court observed, “asks about causation; but the back half, after the ‘or,’ contemplates that some relationships will support jurisdiction without a causal showing.” Id. at 1026. Plaintiffs alleged they suffered in-state injuries “because of defective products that Ford extensively promoted, sold, and serviced in Montana and Minnesota,” thereby establishing a sufficient “connection between the plaintiffs’ claims and Ford’s activities in those states” to “support specific jurisdiction.” Id. at 1032.

Though there were no dissenters, three concurring Justices noted concerns.

Justice Alito, for example, approved the majority’s rejection of Ford’s argument that “a defendant’s contacts with the forum State must be proven to have been a but-for cause of the tort plaintiff’s injury.” But he found the majority’s separate treatment of the clauses “arise out of” and “relate to” an “unnecessary” and “unwise” “innovation” that “risks needless complications.” Id. at 1033. And while the majority asserted that the term “relate to” “incorporates real limits,” Justice Alito found no “indication what those limits might be.” Id. at 1033–34. Instead, he suggested, Ford’s extensive activities in the states, the whole point of which “was to put more Fords (including those in question here) on Minnesota and Montana roads,” forged a “common-sense relationship between Ford’s activities and these suits” which was “causal in a broad sense of the concept” and forged a sufficient link on which personal jurisdiction could rest. Id. at 1033.

Justice Gorsuch, joined by Justice Thomas, expressed similar concerns:

For a case to “relate to” the defendant’s forum contacts, the majority says, it is enough if an “affiliation” or “relationship” or “connection” exists between them. But what does this assortment of nouns mean? Loosed from any causation standard, we are left to guess. The majority promises that its new test does not mean “anything goes,” but that hardly tells us what does.

Id. at 1034–35 (Gorsuch, J., concurring). Absent “meaningful guidance about what kind or how much of an ‘affiliation’ will suffice,” Justice Gorsuch predicted, there was “litigation sure to follow.” Id. at 1035.

His predictions went further. The “sufficient contacts” standard of past Supreme Court cases, he noted, were in part motivated to account for the in-state presence of out-of-state corporations seeking to conduct business in a jurisdiction other than its home state. But perhaps the majority believed “the old test no longer seems a reliable proxy for determining corporate presence as it once did.” If so, he surmised, the new “affiliation” rule “might be understood as seeking to recreate in new terms a jurisprudence about corporate jurisdiction that was developing before this Court's muscular interventions in the early 20th century.” Id. at 1038–39. “If that is the logic at play here, I cannot help but wonder if we are destined to return where we began.” Id.

“Hopefully,” he suggested, “future litigants and lower courts will help us face these tangles and sort out a responsible way to address the challenges posed by our changing economy in light of the Constitution's text and the lessons of history.”

Lower Court Decisions Following Ford

As Justice Gorsuch expected, thousands of cases have cited to Ford even in the short time since it was issued. As for his request for guidance, the results are mixed.

Many of these later cases are unremarkable; the discussion of Ford had little import, because the courts found that the alleged contacts were a but-for cause of injury. That meant that personal jurisdiction likely would have been established even under the strict-causation route that Ford advocated. See, e.g., In re ZF-TRW Airbag Control Units Prod. Liab. Litig., No. LAML1902905JAKFFMX, 2022 WL 522484 (C.D. Cal. Feb. 9, 2022) (“Because HMA's forum-related conduct is alleged to be the but-for cause of Plaintiffs' injuries, the relatedness requirement is satisfied.”)

In other cases, a causal link to the forum state was more tenuous—yet the connection, causal or otherwise, was nonetheless evident. For example, in Choi v. Gen. Motors LLC, No. CV 21-5925-GW-MRWX, 2021 WL 4133735 (C.D. Cal. Sept. 9, 2021), the defendant was alleged to have delivered its vehicle for sale in California via an affiliated dealership. Plaintiffs, citizens of Colorado, purchased the vehicle from the California dealer. Though most relevant subsequent events, particularly the crash of the vehicle, occurred in Colorado, the sale of the offending vehicle in California was deemed “affirmative conduct directed at California for purposes of the purposeful availment/direction analysis.” Indeed, it was “hard for this Court to understand how their claims against GM could not arise out of GM’s role in the California sale of the Vehicle to Plaintiffs.”

Along similar lines, in Bibbs v. Molson Coors Beverage Co. USA, LLC, No. 4:22-CV-0200-P, 2022 WL 2900275 (N.D. Tex. July 22, 2022), a truck driver engaged by a beverage company to transport a trailer load was injured in a rollover accident in West Virginia, while en route from Virginia to Texas. Alleging that the accident occurred because of negligence in securing the load, the plaintiff brought suit in Texas. The court found that the defendant conducted substantial business in Texas, including maintaining a brewery, actively seeking to sell into and serve the market there, and (critical for purposes of this case) directing the plaintiff to ship product into the state. The Court thus found that the defendant’s “overall business activities in Texas serve as the clear backdrop” for the plaintiff’s claim, showing a sufficient relationship to establishing specific jurisdiction.

On the other hand, in cases that refused to find personal jurisdiction, many found clear, almost binary factual differences distinguishing their cases from Ford. Of particular importance is whether the injury (or, failing that, some other activity relevant to the claims) occurred within the state. For example:

• Devon Energy Corp. v. Moreno, No. 01-21-00084-CV, 2022 WL 547641, at *7 (Tex. App. Feb. 24, 2022): the complained-of liability and injuries occurred in New Mexico, and though defendant owned land and had operations in Texas, the claims had little to do with and thus did not relate to those contacts.
• Martins v. Bridgestone Americas Tire Operations, LLC, 266 A.3d 753, 760–61 (R.I. 2022): while the decedent was a resident of and ultimately died in Rhode Island, the injury allegedly was caused by a defective tire manufactured and installed in Tennessee, and the injury occurred in Connecticut. Here, the Court specifically noted that the location of the injury was “key in Ford” in support of its decision finding a lack of personal jurisdiction.
• Murphy v. Viad Corp., No. 21-10897, 2021 WL 4504229 (E.D. Mich. Oct. 1, 2021): freshwater distilling plants alleged to be defective and thereby causing plaintiff’s injuries “had absolutely no connection to Michigan,” and had never “been marketed in Michigan or ever crossed Michigan’s borders”; defendants could not reasonably expect that the “saltwater evaporators would eventually cause them to be summoned to litigate in a state that is surrounded by Earth’s largest system of freshwater lakes, salt-free since c. 14,000 b.c.e.”
• C.T. v. Red Roof Inns, Inc., No. 2:19-CV-5384, 2021 WL 2942483 (S.D. Ohio July 1, 2021): a sex trafficking victim brought claims against hotel chains owning the hotels where underlying injuries were suffered, but brought claims in Ohio rather than Florida, the location of the injury. The court recognized that it likely could have exercised jurisdiction had the incidents occurred in Ohio; had that been the case, the plaintiff would have been “injured by a product the out-of-state defendants marketed in all fifty states, including the forum state, and at least one of her injuries [would have] occurred in the forum state.” As it was, “[t]he suit would involve all but one party based out-of-state, an out-of-state venture, and out-of-state injuries.”
• Douglass v. Nippon Yusen Kabushiki Kaisha, 46 F.4th 226, 235 (5th Cir. 2022): personal injury and wrongful death claims were “caused in foreign waters by a foreign logistics company’s chartered, foreign-registered vessel bound for a foreign country.” If such claims “are sufficiently related to that corporation's shipping-related contacts with the United States,” the Court asked, “then what isn't?”

In other cases where personal jurisdiction was not found, the courts noted that the defendant had effectively no contacts with the forum state. The only connection with the state came from the unilateral actions of the plaintiff or other third parties:

• Morrison v. JSK Transp., Ltd., 2022 IL App (4th) 210542-U: the defendant performed maintenance work on the plaintiff’s vehicle in Arkansas, after which the plaintiff drove to and was injured in Illinois. Though the defendant had service centers in Illinois, the Court found the claim for negligence did not arise out of or relate to those contacts. This case was therefore distinct from Ford because “plaintiff, not defendant, established a relationship among the forum and the litigation.”
• Ditter v. Subaru Corp., No. 20-CV-02908-PAB-MEH, 2022 WL 889102 (D. Colo. Mar. 25, 2022), distinguishing between Subaru Corporation, a Japanese company, and Subaru of America, the American company that controls the distribution of Subaru vehicles in the United States, the court observed there were no facts showing that the former, as distinct from the latter, sold, distributed, or marketed the vehicles in the forum state.
• Ethridge v. Samsung SDI Co., No. 3:21-CV-306, 2022 WL 2920429 (S.D. Tex. July 26, 2022): plaintiff brought claims against the manufacturer and designer of a lithium battery he claimed exploded and caught fire in his pants pocket. Though the defendant’s batteries had been shipped to companies in Texas engaged in the manufacturing or repair of other products, there was no evidence the defendant designed and manufactured its batteries for the Texas market, advertised them in Texas, or marketed and sold them in Texas through a wholly owned distributor. Thus, the Court found no evidence “that the presence of the offending battery in Texas was the result of purposeful availment by Samsung as opposed to an unauthorized act by third parties.”
• Robinson Helicopter Co., Inc. v. Gangapersaud, 346 So. 3d 134 (Fla. Dist. Ct. App. 2022): the defendant, a comparatively small company with a single factory in California,” manufactured a helicopter that plaintiffs purchased in Indiana and then brought into Florida, where it malfunctioned. The defendant, the Court noted, “is no Ford Motor Company”—“a universally acknowledged household name” that “markets and advertises its products daily throughout the country.” Further, it did not engage in any targeted advertising in Florida or maintain employees or representatives in the state.
• Papineau v. Brake Supply Co., Inc., No. 4:18-CV-168, 2022 WL 1444463, at *5 (W.D. Ky. May 6, 2022): “Unlike Ford, Fras-Le never marketed, serviced, or sold its products directly into Kentucky.” Rather, “its only connection [with Kentucky] comes from the unilateral actions of two intermediaries.”
• Miller v. LG Chem, Ltd., 2022-NCCOA-55, 281 N.C. App. 531, 537: “LG Chem has no contacts whatsoever with or within North Carolina, other than products it manufactured ending up in North Carolina, solely through the actions of unrelated third-parties of its products for uses LG Chem never intended. . . . “LG Chem never advertised, sold, or distributed any lithium-ion cells to anyone for sale to individual consumers for use as standalone, removable batteries for the devices Plaintiff purchased.”
• Cameron v. Thomson Int'l, Inc., No. CV 21-17-BLG-SPW-TJC, 2021 WL 3409999 (D. Mont. July 19, 2021): defendant did not market products to Montana or direct advertising to Montana residents. Nor did it have direct customers in Montana, or attempt to foster a relationship with Montana customers. Defendant’s “miniscule sales to Montana through an independent non-resident wholesaler do not rise to the level of purposeful availment.”

In other instances, the defendant did have contacts with the forum state—sometimes meaningful and extensive contacts. Yet there was not a sufficient relationship between those contacts and the litigation to support a finding of specific personal jurisdiction:

• Baton v. Ledger SAS, No. 21-CV-02470-EMC, 2021 WL 5226315 (N.D. Cal. Nov. 9, 2021): purchasers of a hardware wallet to protect cryptocurrency assets brought a class action rising from harms suffered from a data breach. Rejecting plaintiffs’ efforts to establish specific personal jurisdiction, the Court found that “[t]he scale and magnitude of Ledger’s alleged activities in the California pale in comparison with that undertaken by Ford.” In addition, “the relationship between Ledger’s California sales of its product and the hack of the database of its customers from the files of a third party is attenuated and indirect.”
• Specialized Transp. & Rigging, LLC v. Nat'l Union Fire Ins. Co. of Pittsburgh, No. 3:20-CV-00188-TMB, 2022 WL 603034 (D. Alaska Feb. 28, 2022): though defendant sold trailers to other Alaska companies, these were not “the same model” or “even similar” to the one at issue, distinguishing Ford from cases where “a defendant perhaps sells similar, but not identical, products in the forum.” In addition, the defendants’ contacts with Alaska were totally unlike Ford, which had a “veritable truckload of contacts” with the forum state.
• LNS Enterprises LLC v. Cont'l Motors, Inc., 22 F.4th 852 (9th Cir. 2022): the existence of “four repair shops,” none of which was alleged to have worked on the engine in Plaintiffs’ aircraft or the type of engine at issue in this case, was “insufficient” to show that the defendant “continuously and deliberately exploited” the forum’s market “with respect to the specific type of engine at issue.” “There is no indication that Continental advertised, sold, or serviced the type of Continental engine at issue here in Arizona, much less to the extreme degree that Ford advertised, sold, and serviced its vehicles in Montana and Minnesota.”
• Cox v. HP Inc., 317 Or. App. 27 (2022): the defendant, a manufacturer of a drain trap used in a hydrogen generator, was sued in Oregon after the generator exploded. The defendant did not dispute that it purposefully availed itself of the privilege of directly conducting business in Oregon, having sold over $1 million of products in Oregon over the preceding years. But there was little evidence that the defendant “marketed its drain taps as component parts in hydrogen generators to other customers in Oregon.” In particular, its “nontargeted internet presence and the possibility that a customer in Oregon would purchase” the product was “too tenuous to help support a nexus between that advertising and this litigation.” Nor had it “purposefully cultivated a reputation as a reliable drain tap manufacturer in the state so as to motivate HO’s purchase of the hydrogen generator in Oregon.” Nor, finally, did defendant benefit from the protection of Oregon laws based on its sale of drain taps from its headquarters in South Carolina to the generator’s manufacturing facility in Connecticut.
• Johnson v. TheHuffingtonPost.com, Inc., 21 F.4th 314 (5th Cir. 2021): defendant in libel action did not direct actions to Texas through third-party ads; rather, “it treats Texans like everyone else. To target every user everywhere, as those ads do, is to target no place at all.”
• Hepp v. Facebook, 14 F.4th 204 (3d Cir. 2021): Imgur and Reddit targeted advertising business to Pennsylvania; Imgur has an online merchandise store that sells products to Pennsylvanians; and Reddit has a premium membership business and online community organized around Philadelphia. Nevertheless, “none of those contacts forms a strong connection to the missapropriation of Hepp’s likeness.” In particular, none of the merchandise was alleged to feature her photo, nor did the advertising use her likeness. Nor was the photo taken, uploaded, or hosted in Pennsylvania.
• Massie v. Gen. Motors Co., No. 1:20-CV-01560-JLT, 2021 WL 2142728 (E.D. Cal. May 26, 2021): plaintiffs’ claims “have nothing to do with GM’s sales of vehicles in California or any other conduct by GM aimed at California.” Instead, they “allege claims for invasion of privacy based on software used to improve user experience and functionality on a nationally accessible website that is operated from Michigan,” and “[t]he relevant events and alleged injury all occurred online.”

For anyone seeking guidance on where to draw the line between what is and is not sufficiently “related” for purposes of showing personal jurisdiction, this last set of cases may seem frustrating. It is hard to take issue with any of the specific outcomes; these companies simply are nothing like Ford. Yet the distinctions between the defendants and Ford are not binary, but are often a matter of degree. Where Ford’s contacts were extensive and systematic, pushing itself into the forum state for purposes of establishing a presence and relationship there, these other defendants had at most a fleeting presence, at least as far as it concerned the subject matter of the claims. That is all well and good, as far as reaching the outcome in the individual cases; yet these decisions do little to show when a company is so much like Ford, and so much unlike these smaller defendants, that the exercise of personal jurisdiction is appropriate.

Not that this seems to be causing any issues at the outset. As Justice Kagan’s majority opinion assured, the specific jurisdiction standards described in Ford do not mean “anything goes”; sure enough, the lower courts have so far had little trouble identifying distinguishing facts and screening out cases against defendants with few or no contacts with the forum. But as the concurring Justices pointed out, assuring that not everything goes does not answer the question of what does.

To date, we have seen only partial responses to that question. Future cases may well have to confront when a defendant, though not an industry titan along the lines of Ford, has nevertheless done so much to establish a presence in a market that it is fair to expect to answer for its conduct in that market’s courts. Whether the Ford decision marks a first step toward a broader expansion of the scope of personal jurisdiction, where establishing a presence in states away from the corporation’s home will subject the corporation to a wide range of additional claims, remains to be seen.

Key Takeaways

In the meantime, future litigants would do well to watch for how Ford and its progeny affects the legal landscape.

As far as personal jurisdiction goes, the safest place for plaintiffs to bring claims against a corporate defendant remains the home forum of the corporation, where courts can exercise authority to hear claims of any kind against that defendant. We expect to continue to see litigation driven toward corporate defendants’ home states, including their state of incorporation.

Ford may increase the potential for plaintiffs to bring claims outside of the defendant’s home state, by showing that the defendant’s contacts with the state relate to the plaintiffs’ claims even if that relationship is not a causal one. Even so, it is not a free-for-all; early indications show that courts still require meaningful ties to the forum state and reject attempts to establish personal jurisdiction when the defendant has few to no contacts with the state, or when claims bear only a scant relationship to those contacts.

Corporations nevertheless need to be mindful of the increased risk that establishing a presence in a jurisdiction beyond their state of incorporation may lead to litigation in that forum. Plaintiffs will surely continue to look for ways around restrictions on general jurisdiction so they can bring their claims in plaintiff-friendly courts. As plaintiffs continue to press the issue, courts and corporate defendants must clearly define when claims are so distinct from the corporation’s ties to the forum that the claims not only do not arise from, but do not even relate to the corporation’s contacts with the states.

What comes next—and whether, as Justice Gorsuch predicted, we will see a reversion to the era where claims of all kinds could be brought where a corporation has established a significant presence—time will tell.