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.”