On Thursday, March 25, 2021, the Supreme Court of the United States issued its decision in Ford Motor Co. v. Montana Eighth Judicial District Court. The Court unanimously rejected Ford’s argument that it was only subject to personal jurisdiction in a state if the particular vehicle involved was designed, manufactured, or sold in that state.
This case arose out of two separate car accidents that were allegedly caused by defects in the products involved. One accident occurred in Montana and involved a 1996 Ford Explorer. The estate of a Montana resident brought suit against Ford in Montana state court. The other accident occurred in Minnesota and involved a 1994 Ford Crown Victoria. The plaintiff was a resident of Minnesota and brought suit against Ford in Minnesota state court.
Ford sought to dismiss both suits on the grounds that the state courts involved did not have personal jurisdiction over the claim. Ford argued that jurisdiction is proper only if its conduct in the forum state had given rise to the claims. Ford further argued that this causal link did not exist in either suit because the vehicles involved were not designed, manufactured, or sold in the forum state.
Justice Kagan wrote the opinion for the Court and affirmed the decisions of the Montana and the Minnesota Supreme Courts rejecting Ford’s argument. The Court quoted its decision in International Shoe Co. v. Washington, 326 U.S. 310 (1945), in which the Court held that a state’s jurisdiction over a defendant “depends on the defendant’s having such ‘contacts’ with the forum State that ‘the maintenance of the suit’ is ‘reasonable, in the context of our federal system of government,’ and does not offend the traditional notions of fair play and substantial justice.”
The Court discussed the differences between general and specific jurisdiction, which was at issue in these cases. The Court further explored its prior decisions on specific jurisdiction, which have held that the defendant must act such that it “purposefully avails itself of the privilege of conducting activities within the forum State.” Hanson v. Denckla, 357 U.S. 235, 253 (1958). Additionally, the plaintiff’s claims must “arise out of or relate to the defendant’s contacts” with the state. Bristol-Myers Squibb Co. v. Superior Court of Cal., San Francisco Cty., 582 U.S. __, __ (2017) (slip op., at 5).
The Court used the precedent cited above in its finding that Ford’s argument was unpersuasive. Ford conceded that it “purposefully availed itself of the privilege of conducting” business in both Montana and Minnesota. It actively seeks to serve the market for automobiles and related products in both states. However, Ford argued that these contacts were not sufficient to establish personal jurisdiction because there was no causal link between these contacts and the accidents. Ford argued that this causal link is only found if the defendant’s conduct in the forum state gave rise to the claims. Ford further purports that specific jurisdiction is only found in the state in which the vehicle at issue was sold, or where the vehicle was designed or manufactured.
The Court was unpersuaded by this limited interpretation of specific jurisdiction, as precedent has found specific jurisdiction is proper when the suit “arise[s] out of or relate[s] to the defendant’s contacts with the forum.” Bristol-Myers, 582 U.S., at __ (slip op., at 8). Therefore, causation does not have to be shown in every case. Ford has advertised, sold, and serviced both car models at issue in both Montana and Minnesota for several years. This demonstrates that “Ford had systematically served a market in Montana and Minnesota for the very vehicles that the plaintiffs allege malfunctioned and injured them in those States.”
The Court further found that allowing jurisdiction in these cases treats Ford fairly and is supported by the principles of “interstate federalism.” Ford “enjoys the benefits and protection of the laws” of Montana and Minnesota. Additionally, the states have significant interests involved in the claims since they involve residents of and accidents occurring within their states.
The Court concluded that because “Ford extensively promoted, sold, and served in Montana and Minnesota. . . the ‘relationship among the defendant, the forum[s], and the litigation’–is close enough to support specific jurisdiction.”
This case is notable for companies and manufacturers who distribute and advertise their product nationally. A company can be brought to court in a state where the product at issue was not sold, manufactured, or distributed if its other contacts with the state are such that it purposefully avails itself of the privilege of conducting business in the state and the claim relates to these contacts.
If you have any questions about this legal update please reach out to a member of the Products Liability team.
