Manufacturer’s Substantial Business Supports Finding of Specific Jurisdiction
On March 25, 2021, the U.S. Supreme Court issued its decisions in Ford Motor Co. v. Montana Eight Judicial District Court et al., and Ford Motor Co. v. Bandemer.
By way of brief background, in both cases, the states exercised jurisdiction over Ford in products-liability actions stemming from auto accidents. In both cases, the Ford involved in the accident was brought to the state via the used-vehicle market. Specifically, in Ford Motor Co. v. Montana Eighth Judicial District et al., the lawsuit alleged Markkaya Gullett (“Gullett”) was killed in Montana when a 1996 Ford Explorer malfunctioned; in Ford Motor Co. v. Bandemer, Adam Bandemer (“Bandemer”) asserted injuries stemming from a collision in Minnesota involving a 1994 Crown Victoria.
In both lawsuits, Ford moved to dismiss for lack of personal jurisdiction. Ford argued that a state could only exercise jurisdiction over Ford if Ford’s conduct in that specific state gave rise to the plaintiff’s claims. In other words, Ford asserted that a causal link only existed if the vehicle involved in the accident was designed, manufactured or sold by Ford in the state where the specific accident took place. In both cases, Ford did not manufacture or sell the vehicles in the forum state where the accident took place; instead, the involved vehicle was brought to the state through resales and relocations by consumers. The Supreme Court in both states rejected Ford’s argument, since Ford’s activities in the state were sufficient to establish the necessary connection to the plaintiff’s claims that a defective Ford motor vehicle caused the in-state injury.
In an 8-0 decision, the Supreme Court affirmed the Supreme Court of Montana’s and Supreme Court of Minnesota’s holdings that the connection between Ford’s activities in the forum state and the plaintiff’s claims was close enough to support specific jurisdiction, as Ford systematically served markets in Montana and Minnesota for the specific vehicles involved in the accidents. In doing so, the Supreme Court held that to establish personal jurisdiction over a non-resident defendant, plaintiffs no longer need to establish a causal link between the defendants’ actions and the plaintiffs’ specific cause of action. Put another way, a manufacturer’s business in the forum state supports a finding of specific jurisdiction.
This decision is significant because it represents a departure from the Supreme Court’s previous holding that a corporation is not subject to a lawsuit in a state where it was not incorporated or headquartered unless the lawsuit arose “out of or relate[s] to the defendant’s contacts” with the state. While it is unclear how this decision will apply outside of this context, in cases where a defendant has significant operations in the forum state, the decision suggests significant weight will be given to the location of the accident and the plaintiff’s place of residence.
Thanks to Lauren Berenbaum for her contribution to this post. Please contact Heather Aquino with any questions.