Supreme Court Unanimously Affirms Specific Personal Jurisdiction Over Automobile Company In Product Liability Suits
On March 25, 2021, the United States Supreme Court unanimously affirmed decisions by the Montana and Minnesota Supreme Courts holding that their lower courts had properly exercised specific personal jurisdiction over an automobile company in product liability suits arising from accidents in those states involving the company’s vehicles, even though those particular vehicles had not been designed, manufactured, or sold in those states. Ford Motor Co. v. Montana Eighth Jud. Dist. Ct., Nos. 19-368, 19-369, 2021 WL 1132515 (U.S. Mar. 25, 2021). In a consolidated appeal, the company challenged the State supreme court decisions, arguing that specific personal jurisdiction is only proper where there is a strict causal relationship between the defendant’s activities in the forum state and the plaintiff’s claim. The Court rejected the company’s argument, holding that the exercise of personal jurisdiction in those states was proper under the circumstances.
The company, incorporated in Delaware and headquartered in Michigan, manufactures, markets, and sells automobiles throughout the United States. It also allegedly encouraged resale markets for its vehicles, with nearly all its dealerships buying and selling used cars. The lawsuits arose from accidents involving a 1996 model (in the Montana case) and a 1994 model (in the Minnesota case). In neither case had the company designed, manufactured, or sold the vehicle involved in the accident in the state where the accident occurred and where plaintiff (a resident of the forum) filed suit.
The company moved to dismiss both suits for lack of personal jurisdiction. The company conceded that it had “purposefully avail[ed] itself of the privilege of conducting activities” in both states, including selling and marketing the specific vehicle model involved in the accidents in the states where those accidents occurred. The company maintained, however, that a state court may exercise specific personal jurisdiction only if the defendant’s conduct in that state “gave rise” to the plaintiff’s claims and that, in these particular cases, no such causal link existed because the company had not designed, manufactured, or sold the specific vehicles at issue in the states where the accidents occurred. Both State Supreme Courts rejected the company’s argument.
The U.S. Supreme Court also rejected the company’s argument for a “causation-only approach.” Rather, the Court opined, it is sufficient for the exercise of specific jurisdiction that the suit “arise out of or relate to the defendant’s contacts with the forum.” The Court thus found jurisdiction was proper because the company conceded that it purposefully availed itself of the privilege of conducting activities in both states (in the form of marketing, sales of cars and parts, and repairs) for the same types of vehicles involved in the accidents; as a result, the company’s conduct and the subject of the litigation were sufficiently related. In the Court’s words: “[The company] had systematically served a market in Montana and Minnesota for the very vehicles that the plaintiffs allege malfunctioned and injured them in those States. So there is a strong ‘relationship among the defendant, the forum, and the litigation’—the ‘essential foundation’ of specific jurisdiction.” 2021 WL 1132515, at *7 (quoting Helicopteros Nacionales de Colombia, S. A. v. Hall, 466 U.S. 408, 414 (1984)). Accordingly, the Court held that while other states could also properly have jurisdiction (such as the states where the cars were sold), this does not foreclose jurisdiction from being proper in the states where plaintiffs resided and where the accidents occurred, given the company’s suit-related activities in those states.