The U.S. Supreme Court recently addressed the scope of personal jurisdiction over defendants in products-liability actions in Ford Motor Co. v. Montana Eighth Judicial District Court et al., 141 S. Ct. 1017 (2021). The decision gives guidance on where companies can potentially be sued for injuries arising from their products and is particularly relevant for companies with nationwide markets.
In a pair of consolidated lawsuits against Ford Motor Company, the Court considered whether a plaintiff harmed by a defective product must show that the defendant designed, manufactured, or originally sold the specific injury-causing product in the forum state for courts in that state to exercise personal jurisdiction over the defendant. Ford Motor Co. v. Montana Eighth Judicial District involved a car accident in Montana involving a Ford Explorer. Ford Motor Co. v. Bandemer likewise arose from a car accident, one that occurred in Minnesota involving a Ford Crown Victoria. Neither car at issue was designed, manufactured, or originally sold by Ford in the respective forum state. Instead, Ford designed, manufactured, and sold both vehicles in other jurisdictions. Both vehicles arrived in the respective forum states only after a chain of customer resales and relocations.
In concluding that specific personal jurisdiction existed in both cases, the Supreme Court rejected Ford’s argument that because its contacts with Montana and Minnesota were not the but-for causes of the plaintiffs’ claims, Ford was not subject to personal jurisdiction in those states. Justice Elena Kagan, writing for the Court, found it sufficient that “Ford has a veritable truckload of contacts with Montana and Minnesota” that could support personal jurisdiction, including, for example, support of a used car market through establishment of authorized dealerships and the sale of replacement parts, pervasive advertisement in the forum, and sales at numerous dealerships in the forum states. The Court found these extensive contacts were sufficiently related to the alleged injuries to create a basis for specific personal jurisdiction. Surveying its specific jurisdiction precedent, the Court observed that specific jurisdiction exists not only when a suit “arises out of” a defendant’s contacts with the forum state, but also when the suit “relates to” the defendant’s contacts with the forum. And because these cases involved products that Ford actively marketed in the forum state (including by supporting the used car market), that was enough to support specific personal jurisdiction.
While the Court’s holding relates to specific personal jurisdiction, it highlights interesting interactions with principles of general jurisdiction. Justice Gorsuch stated in his opinion concurring in the judgment that while the Supreme Court has often treated general and specific concepts of jurisdiction as “distinct, some of the old guardrails have begun to look a little battered.” By holding that a defendant’s contacts with the forum state need not be the but-for cause of a plaintiff’s injuries to support specific personal jurisdiction (at least in sufficient quantity), the Court has arguably blurred the lines between general jurisdiction (which looks to the overall weight of the defendant’s contacts with the forum) and specific jurisdiction. In his concurrence, Justice Gorsuch muses that these doctrinal trends in personal jurisdiction may be reflective of the changing economic realities of modern, twenty-first-century commerce.
Ford Motor Company leaves open many questions about what personal jurisdiction looks like in this interconnected market environment, such as:
When do forum contacts sufficiently “relate to” a cause of action and when has a manufacturer “created a market” in a certain state?
Does Ford Motor Company apply where a defendant has created a market for a product that is similar, but not identical, to the one that caused an injury in the forum state?
How far, if at all, does the holding expand beyond the products-liability context?
Plaintiffs’ counsel will no doubt be emboldened by Ford Motor Company in selecting forums for filing suit. Companies should keep this in mind when entering or creating new markets for their products, and those operating on a nationwide basis should maintain a clear understanding of where their products are sold (and re-sold) and consider the legal implications of those markets.