Ford v. Montana: Supreme Court on the Scope of Personal Jurisdiction

Note – this is a civil procedure case that I’ve been following. Many lawyers will be interested, even if not directly related to intellectual property. Dennis Crouch

Ford Motor Co. v. Montana 8th Judicial District (Supreme Court 2021)

Markkaya Gullett was killed in a Ford Explorer crash near her home in Montana.  Gullett’s estate sued Ford on a product liability type claims.  Ford argued that the state lacks personal jurisdiction over the global auto company.  The Supreme Court has sided with Gullett’s estate — finding that the 14th Amendment does not prohibit this case from moving forward.

Over the past decade, the Supreme Court has tightened-up the 14th Amendment personal jurisdiction test both in terms of General Jurisdiction and Specific Jurisdiction.  Although the U.S. Constitution serves as the foundational basis for the large number of precedential cases, the text is quite short: “nor shall any State deprive any person of life, liberty, or property, without due process of law.”  The Constitutional requirements of personal jurisdiction are due process requirements.

General Jurisdiction: Ford has a longstanding permanent relationship with Montana, advertises heavily in the state, and receives hundreds-of-millions-of-dollars in revenue from in-state sales. Still, under Daimler AG v. Bauman, 571 U. S. 117 (2014), state courts will not have General Jurisdiction over the the company since it still isn’t “at home” in the state.

With Specific Jurisdiction, the Court’s recent decision in Bristol-Myers Squibb Co. v. Superior Court of Cal., San Francisco Cty., 582 U. S. ___ (2017) refocused attention on a required nexus between the the defendant’s contacts with the forum state and the cause of action.  The decision suggested to many that defendant’s connections should have a causal-link with the cause of action.  BMS also rejected a sliding-scale approach that would allow for fewer related minimum contacts in situations where the defendant has many ongoing unrelated contacts with the forum state.

Although Ford sells Explorers in Montana, the particular Ford Explorer here was not designed, manufactured, or sold in Montana. The vehicle ended-up in Montana after a series of re-sellings and relocations.  The plaintiff alleges that Ford designed, manufactured & sold a defective product (and failed to warn), but none of those actions – with respect to this particular vehicle – were directed to the state of Montana.  As such, Ford argued that it lacked minimum contacts with the state because the action did not “arise out of or relate to the defendant’s contacts.”

The Supreme Court rejected Ford’s causal-link requirement and put emphasis on the “or relates to” portion of the quote above.

None of our precedents has suggested that only a strict causal relationship between the defendant’s in-state activity and the litigation will do. As just noted, our most common formulation of the rule demands that the suit “arise out of or relate to the defendant’s contacts with the forum.” The first half of that standard asks about causation; but the back half, after the “or,” contemplates that some relationships will support jurisdiction without a causal showing.

Slip Op.  One thing interesting here is that the court suggested that its prior case in this area should construed “as though we [are] dealing with language of a statute.” Quoting Reiter (1979).  The “or” has meaning.

Now we have a line-drawing problem with what counts as “relating to,” and the majority opinion wrote that “real limits” can be discerned from precedent.

Those who have read BMS know that it was about sales of Plavix.  Although BMS sold the Plavix in California, the none of plaintiffs associated with the Supreme Court case bought Plavix in California or were injured in California.  In that case, the court found no minimum contacts.  In Ford, the distinction appears to be that the defendant was injured in Montana. The court writes: “Ford serves a market for a product in the forum State and the product malfunctions there.”  The problem with this distinction is that the difference has to do with the plaintiff’s activity, not the defendant’s activity. Yet, it still qualifies as a minimum contact by the defendant.  I think the answer is perhaps that “minimum contacts” is a term of art that means more than what it might imply from the two words themselves.  The court’s express concern in BMS was federalism — we should be cautious about California handling product liability cases about injury/sales that occurred in other states.  In this case Federalism points to Montana being an appropriate forum because a Montana citizen was injured while driving a car registered in Montana on a Montana road.

The majority opinion was authored by Justice Kagan and joined by Chief Justice Roberts and Justices Breyer, Sotomayor, and Kavanaugh.  Justices Alito and Gorsuch both wrote concurring opinions with Justice Thomas joining Justice Justice Gorsuch’s opinion.

Justice Alito, who penned the BMS decision explained that the difference between those cases is whether the state has a “legitimate interest” in hearing the case at hand.  Here, he found that no question — injury on Montana roads is enough to give Montana a state interest.  And, there is nothing fundamentally unfair about having Ford litigate these cases in the state.

Justice Gorsuch wrote an interesting concurring opinion suggesting that it is time for a new Shoe. “International Shoe just doesn’t work quite as well as it once did.”

14 thoughts on “Ford v. Montana: Supreme Court on the Scope of Personal Jurisdiction

  1. 6

    RE: “were directed to the state of Minnesota” probably spell check changed this from “Montana”?

    1. 6.1

      Thanks Frederic. This decision had a companion case out of Minnesota and that’s where that came from.

      1. 6.1.1

        Sounds good. Thanks.

  2. 5

    > The proposed statute calls for the director to collect “demographic
    > information” and then that “demographic information is not made
    > available to examiners.” Is it really reasonable to interpret this as
    > firewalling any demographic information from examiners …

    Ben, yes, that is a reasonable interpretation based on the specific language of the proposed IDEA Act, Section 124(b):

    ‘‘(b) PROTECTION OF INFORMATION.—The Director shall—
    (1) keep any information submitted under subsection (a) confidential and separate from the application for patent; and
    (2) establish appropriate procedures to ensure—
    (A) the confidentiality of any information submitted under subsection (a); and
    (B) that demographic information is not made available to examiners or considered in the examination of any application for patent.”

    “Subsection (a)” refers to Section 124(a), which provides for the voluntary collection of demographic information by applicants.

    The key provision here is the last clause of 124(b)(2)(B), which obligates the Director to “establish appropriate procedures to ensure… that demographic information is not made available to examiners or considered in the examination of any application for patent.” Notice that unlike other parts of Section 124(b), this subsection simply refers to “demographic information,” without any qualification as to the source of the information or how it was made available to the examiner. One could argue that this provision simply prohibits demographic information, from any source, from being made available to examiners–period. Putting aside whether it’s feasible to firewall demographic information from examiners based on the mechanics of the current patent examination process, the plain text could reasonably be interpreted as imposing such a firewalling requirement.

    It isn’t clear if that was the intent of the proposal; the drafters could have simply intended that Section 124(b)(2)(B) prevent examiners from obtaining the demographic information that was specifically collected under the voluntary collection provision of Section 124(a), and in that case, the provision would not apply to demographic information that came from some other source. The problem with such a narrower interpretation is that 124(b)(2)(A) just says “demographic information,” and is not limited to the information collected under 124(a). Other portions of Section 124(b) specifically refer back to the “information submitted under [124(a)],” including 124(b)(2)(A) requiring that voluntarily-collected demographic information be kept confidential. One could argue that the omission of any such qualification from “demographic information” in 124(b)(2)(B) supports the broader reading above, that demographic information cannot be made available to examiners from any source.

    1. 5.1

      “One could argue that the omission of any such qualification from “demographic information” in 124(b)(2)(B) supports the broader reading above, that demographic information cannot be made available to examiners from any source.”

      I get that, but doesn’t the absurdity of this one line preventing the office’s agents from evaluating key sections like 102(b)(1) strongly weigh against that interpretation?

      In other words, if there are two “reasonable” interpretations, and one would substantially undermine the functioning of the statute… isn’t there really only one reasonable interpretation?

      1. 5.1.1

        Ben, the principle of avoiding absurdities is a narrow doctrine and rarely applied. I don’t see how the broader interpretation creates a legal absurdity; an “absurdity” is not simply an interpretation that produces a result that one might regard as silly, anomalous or illogical. It generally requires a result so preposterous that no reasonable legislator could have intended it. Here, it is entirely conceivable that the legislature intended to prevent examiners from obtaining demographic information (regardless of its source) to ensure it would play no part in the examination process.

        But I think the better way of addressing the problems you envision is to focus more on what “demographic information” is, rather than where it came from. Your argument about 102(b)(1) appears to assume that an applicant’s name would be “demographic information,” but I don’t think that necessarily follows. Demographic information is usually understood as information that directly identifies an applicant’s race, gender, national origin, orientation, marital status, etc., but doesn’t include information from which you might be able to indirectly discern those characteristics. A person’s name by itself, for example, is often not regarded as “demographic information” even though you might be able to discern sex/gender, national origin, etc., from it. And physically meeting with an applicant during an interview and thus being exposed to their appearance, speaking accents, etc., does not qualify as the examiner receiving “demographic information” even if the examiner might be able to discern demographic characteristics from those interactions.

        Because “demographic information” is not defined in the statute, the Director would be able to make these distinctions clear through the governing regulations. I think Katznelson’s criticisms were focused too much on rhetoric; certainly there may be people who support the IDEA Act who want inventor names redacted, but that rhetoric needs to be kept separate from the statutory language itself. There is nothing in the structure or language of this particular statute suggesting that it was intended to uproot longstanding patent examination processes, let alone mandate an anonymous examination regime.

        1. 5.1.1.1

          “Your argument about 102(b)(1) appears to assume that an applicant’s name would be “demographic information,” but I don’t think that necessarily follows.”

          To be clear, the argument should be attributed to Katznelson. He expressly states that “to comply with the Act would necessitate removal of the inventor’s name from any document that examiners consider.” He similarly suggests that interviews including inventors would need to be prohibited.

          If your point is that such an interpretation is unreasonable, I wholeheartedly agree. The purpose of my original query was to find out whether I was missing any reason why his interpretation could be reasonable.

          1. 5.1.1.1.1

            “You sound like one o’ them anti-innovation Yankee patent examiners!”

            Poor Ron.

  3. 4

    DC: “The problem with this distinction [between one set of facts and another set of facts] is that the difference has to do with the plaintiff’s activity, not the defendant’s activity.”

    I’m not sure why this real distinction is a real “problem” for anybody except for Ford’s attorney’s. What’s next? Ford is going to argue that it could not have known that THIS car would be driven across state lines?

    Interesting case though. Another reason not to buy a Ford.

  4. 3

    “In Ford, the distinction appears to be that the defendant was injured in Montana. The court writes: ‘Ford serves a market for a product in the forum State and the product malfunctions there.’ The problem with this distinction is that the difference has to do with the plaintiff’s activity, not the defendant’s activity. Yet, it still qualifies as a minimum contact by the defendant.”

    I think you’ve nailed how Ford distinguishes BMS — injury occured in the forum. But, in my reading, you misattribute that distinction to the “minimum contacts” portion of the inquiry, when it is more properly attributed to the nature of plaintiff’s claim/”relating to” portion of the inquiry (which is the Court’s focus in Ford).

    Do you think it’s fair to say that the due process inquiry for specific personal jurisdiction now distills down to three sequential steps: (1) are plaintiff’s claims sufficiently connected to the forum; (2) are defendant’s sufficiently connected to the forum (i.e. minimum contacts); (3) and is there a sufficient relationship between the connections in step 1 and the connections in step 2?

    WWVW’s facts failed at step 2. BMS’s facts failed at step 1. Ford’s facts pass all three. And the distinction you note goes to step 1, not 2.

    1. 3.1

      R.R., that complex analysis was confusing to me, perhaps from never having dealt with this kind of case. Isn’t the historic proper forum test for personal injury tort cases based on where the defendant was injured, as held here? I.e., are there sufficiently good reasons to make the subset of product personal injury tort cases differ?

  5. 2

    Question for your law students: is there any way in which fully complying with the patent venue statute 28 U.S.C. §1400(b)* would not also provide “specific jurisdiction” per this new Ford v Montana Sup. Ct. decision?
    *”[a]ny civil action for patent infringement may be brought in the judicial district where the defendant resides, or where the defendant has committed acts of infringement and has a regular and established place of business.”]

  6. 1

    Totally off topic:

    At the Other Place, Ron Katnzelson says regarding the IDEA act:

    “Proposed § 124(b)(2)(B) would require the USPTO to “establish appropriate procedures to ensure … that demographic information is not made available to examiners or considered in the examination of any application for patent.” But concealing such information from examiners is virtually impossible without turning on their head the Patent Act, the USPTO regulations, and its long-established examination procedures.”

    I happily joined the mocking of the Biden administration’s idea of “anonymous examination” back in January, but it’s not clear to me that the proposed statute is actually implementing that idea.

    The proposed statute calls for the director to collect “demographic information” and then that “demographic information is not made available to examiners.” Is it really reasonable to interpret this as firewalling any demographic information from examiners?

    1. 1.1

      Ben, my response to your message somehow got pushed to the top instead of under your message.

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