On March 25, 2021, the U.S. Supreme Court handed down a decision which rejected a narrow construction of specific personal jurisdiction under the Due Process Clause. In Ford Motor Co. v. Mont. Eighth Judicial Dist. Court, the Supreme Court clarified the limits of specific personal jurisdiction and litigants’ due process rights and held that Ford Motor Co. can be sued in Montana and Minnesota over accidents involving used cars in those states even though the cars were not designed, manufactured, or sold in those states. The decision has significant implications for the scope of personal jurisdiction under the Due Process Clause, including for aviation manufacturers in product liability actions that are filed outside of their home jurisdiction.
The court’s ruling was 8-0, with Justice Alito filing a concurring opinion and Justice Gorsuch filing a separate concurring opinion that was joined by Justice Thomas. Justice Barrett did not participate.
In 2017, the Supreme Court held in Bristol-Myers Squibb Co. v. Superior Court of California, 137 S. Ct. 1773 (2019), that specific personal jurisdiction can be exercised over a defendant pursuant to the Due Process Clause only when (1) a defendant “ha[s] purposefully availed itself of the privilege of conducting activities within the forum state” and (2) when the plaintiff’s claim “arise[s] out of or relate[s] to” the defendant’s forum conduct. The Supreme Court’s decision in Ford Motor Co. examined the limits of the second prong—that a plaintiff’s claim must “arise out of or relate to” the defendant’s forum conduct.
Ford Motor Co. had objected to the exercise of specific personal jurisdiction over it in Montana and Minnesota on due process grounds. Although it admitted that it “purposefully avail[ed] itself of the privileges of conducting activities” in both states, it argued that the plaintiffs’ claims did not “arise out of or relate to [Ford’s] contacts with forum” because it did not design, manufacture, or sell the purportedly defective vehicles in the forum states. Specifically, Ford argued that due process requires a causal link between the forum jurisdiction which locates jurisdiction in only the states where it designed, manufactured, or sold the allegedly defective vehicles.
The Court held that Ford’s causation approach improperly narrowed the requirement that the claims at issue “arise out of or relate to” a defendant’s contacts with the forum. Examining the “arise out of or relate to” language, the Court found that the first part of the standard, “arise out of,” invokes a causal inquiry but the second part, “relate to,” should be read more broadly. Properly construed, a claim may “relate to” a forum jurisdiction because of an “affiliation between the forum and the underlying controversy, principally, [an] activity or an occurrence involving the defendant that takes place within the State’s borders.”
In making its forum affiliation inquiry, the Court emphasized that Ford cultivated a market in each state by advertising, marketing, selling and servicing its vehicles. Put another way, Ford had systematically created a market in Montana and Minnesota for the type of vehicles that the plaintiffs asserted had malfunctioned and caused their injuries. Therefore, there was a strong “relationship among the defendant, the forum, and the litigation”—the “essential foundation” of specific jurisdiction. The Court also observed that the exercise of jurisdiction treated Ford fairly because, in conducting so much business in the forum states, Ford “enjoys the benefits and protection of [their] laws” and the exercise of jurisdiction served the principles of interstate federalism.
In reaching these conclusions, the Supreme Court specifically rejected Ford’s argument that the Supreme Court’s decisions in Bristol-Myers and Walden v. Fiore, 571 U.S. 277 (2014) foreclosed the exercise of jurisdiction over Ford. The Court’s treatment of both these precedents is worthy of note.
Looking at Bristol-Myers, the Court found it to be a classic case of forum shopping. The out-of-state plaintiffs’ claims in question had no connection to the forum state, California. They did not buy their pharmaceutical products in California, were not injured there, and Bristol-Myers had no reason to foresee it would be sued in California by those plaintiffs. Without any relevant connection for the claims themselves, Bristol-Myers’ substantial presence in California was not enough to support jurisdiction. The difference in Ford Motor Co., however, was apparent. The plaintiffs lived in Minnesota and Montana, they operated and serviced their cars in their respective states, and they were injured in their home states as well. Ford, having carved out a substantial presence in each state for the marketing, sale, and servicing of cars, also had reason to foresee that it could be sued on a claim involving a Ford automobile in either state.
Turning to Walden, Ford argued, based on Walden, that the plaintiffs’ presence in their chosen forum was not enough to confer jurisdiction absent Ford having manufactured or sold the allegedly defective automobiles in the state. In Walden, however, the Court noted that it found the plaintiffs’ residence insufficient to sustain jurisdiction in a case when the defendant had never been to plaintiffs’ home state and had no presence there at all. Ford Motor Co. again was different. Ford had substantial connections to the respective home forums and those connections were carved out by Ford for purpose of marketing, selling and repairing the very type of product in question.
The concurring opinions by Justice Alito and Justice Gorsuch, the latter joined by Justice Thomas, agreed with the assertion of jurisdiction over Ford. Justice Alito expressed reservations over the majority’s treatment of “related to,” indicating that a broad reading of that phrase could create problems in a case where a defendant had cultivated a presence in a forum to a much lesser degree than Ford. Justice Gorsuch had reservations about the construction of “relate to” as well, but not because he saw it as too expansive. He believed that trying to determine when the defendant’s contacts were sufficiently “related to” the controversy would unduly complicate the analysis of when the requisite connection to the forum was present.
In a series of decisions preceding Ford Motor Co. the Supreme Court gave the indication that it was ready to resort to the Due Process Clause to cut back on the assertion of jurisdiction over an out-of-state defendant unless there was a direct connection between the controversy and the defendant’s conduct in the forum. Ford Motor Co. — unanimously — brought that notion to an abrupt halt. Forum shopping, as reflected in Bristol-Myers, will not be tolerated. But where the plaintiff has connections to the forum, the defendant has purposefully availed itself of the privilege of doing business in the forum, and the defendant’s forum contacts can be rationally related to the controversy, Ford Motor Co. indicates that an assertion of jurisdiction can be upheld. Due process apparently is not offended when the relationship between the controversy and the forum is sufficient to make the assertion of jurisdiction rational and foreseeable, and there is no overt unfairness to the defendant in being sued in the chosen state.
What does this mean for aviation manufacturers?
Ultimately, the ruling in Ford Motor Co. is likely to lead to more product liability suits filed against aviation manufacturers and other defendants in the forum states where plaintiffs live and are injured. The majority’s holding that the “arise out of relate to” standard only requires an “affiliation between the forum and the underlying controversy” will undoubtedly lead to more suits which test the contours of the Due Process Clause. Without specific language from the majority which cabins the limits of specific personal jurisdiction, lower courts will be left to their own devices on how to apply this standard. For their part, plaintiffs who bring lawsuits where no overt forum shopping is involved, can employ the reasoning in the decision to assert jurisdiction where their lawsuit has a factual connection to their chosen forum and the defendant has, on its own volition, established a substantial business connection with the forum.
The case name is Ford Motor Co. v. Montana Eighth Judicial Dist. Court, 141 S. Ct. 1017 (2021).