Is Personal Jurisdiction “Built For The Road Ahead?” A Closer Look At Ford v. Montana – Litigation, Mediation & Arbitration

To print this article, all you need is to be registered or login on Mondaq.com.

On March 25, 2021, the Supreme Court held in Ford Motor
Company v. Montana Eighth Judicial District Court that Montana
and Minnesota courts could exercise jurisdiction over the global
auto manufacturer for certain in-state vehicle accidents, even if
Ford sold, designed, and manufactured the allegedly defective
automobiles outside those forums.1 The Ford
decision sparked immediate questions about the direction of the
Court’s personal jurisdiction jurisprudence, especially after a
decade of decisions restricting the exercise of jurisdiction over
out-of-state defendants. Does Ford signal a return to the
days of expansive jurisdiction or was it simply a tried-and-true
application of existing principles? In other words, how worried
should defendants be that the International Shoe is now on
the other foot? In this analysis, we look under Ford’s
hood to see what lies ahead for personal jurisdiction and begin
thinking about Ford’s practical impact.

A “Paradigm” Fact Pattern

Plaintiffs in the two consolidated actions were injured, one
fatally, when components of the Ford vehicles they were driving or
riding in allegedly malfunctioned, either causing a crash (the
Montana case) or increasing the severity of one (Minnesota). Ford
moved to dismiss both lawsuits on the grounds that the Montana and
Minnesota courts lacked personal jurisdiction over Ford because
Ford’s conduct in each state had not given rise to the
plaintiffs’ claims.

The high courts of both states disagreed, and the US Supreme
Court affirmed, holding that Ford’s contacts with the two
states were sufficient to establish personal jurisdiction. Because
Ford is neither incorporated nor headquartered in Montana or
Minnesota, those states lacked “general” jurisdiction
over Ford for claims that arise elsewhere. (General jurisdiction
permits an out-of-state defendant to be sued for any and all
claims, even if the claim has nothing to do with the
defendant’s activities in the forum state. Because of its
all-encompassing nature, the Supreme Court previously limited
general jurisdiction to only those places where the defendant is
“essentially at home” in the forum. For companies, that
largely means in its principal place of business or place of
incorporation.) With general jurisdiction off the table, the
question was whether Ford’s contacts with Montana and Minnesota
were sufficient to permit “specific” jurisdiction, which
requires that “[t]he plaintiff’s claims . . . ‘arise
out of or relate to the defendant’s contacts’ with the
forum.”2

This test, the Court explained, has two components. First, the
defendant must have purposefully availed itself of the privilege of
conducting activities in the forum state. Or put another way, the
defendant must have “deliberately ‘reached out beyond’
its home—by, for example, ‘exploiting a market’ in
the forum State or entering a contractual relationship centered
there.”3 Here, Ford conceded that it does extensive
business in Montana and Minnesota and has purposefully availed
itself of the privilege of conducting activities in both states by,
among other things, advertising, selling and servicing the vehicle
models at issue in these lawsuits.

Ford’s concession focused the Court’s attention on the
second element: whether the plaintiffs’ claims “arise out
of or relate to” Ford’s in-state activities. Ford
maintained these lawsuits did not arise from its general commercial
dealings in the two states. According to Ford, the Supreme
Court’s prior cases imposed a causal connection requirement,
meaning that the defendant’s conduct in the forum must give
rise to the plaintiffs’ claims. Ford asserted that personal
jurisdiction was thus precluded because Ford first sold the
vehicles at issue in Washington and North Dakota rather than in the
forum states. In other words, Ford’s activities with respect to
these particular vehicles took place exclusively outside
Montana and Minnesota. The vehicles’ original owners
subsequently sold them to individuals who, unbeknownst to Ford,
later relocated or resold the vehicles, which ended up in Montana
and Minnesota.

The Court rejected Ford’s argument, holding that
“Ford’s causation-only approach finds no support in this
Court’s requirement of a ‘connection’ between a
plaintiff’s suit and a defendant’s
activities.”4 The Court explained that its specific
jurisdiction test, as articulated in prior cases, can be satisfied
when the suit either “arises out of” or
“relates 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.'”5

Stated otherwise, a plaintiff need not prove that a claim
“came about because of the defendant’s in-state
conduct” as long as the claim “relates to” that
conduct.6 The Court left the precise contours of
“relate to” unclear, though cautioned that “in the
sphere of specific jurisdiction, the phrase ‘relate to’
incorporates real limits, as it must to adequately protect
defendants foreign to a forum.”

Having disposed of Ford’s causation argument, the Court
concluded that Ford was subject to specific jurisdiction. Ford
“regularly conducts [business] in Montana and Minnesota”
by advertising its vehicles heavily in both states, including the
models at issue here; selling its vehicles, both new and used, at
dozens of dealerships in the states; repairing its vehicles at
those dealerships, including older vehicles; and distributing
replacement parts to its own dealers and independent repair
shops.7 These practices “mak[e] it easier to own a
Ford” and “encourage Montanans and Minnesotans to become
lifelong Ford drivers.”8

These forum activities, the Court held, were sufficiently
“related” to the plaintiffs’ claims—for
in-state injuries caused by defective manufacturing of Ford
automobiles—to subject Ford to suit there. In short,
“Ford had systematically served a market in Montana and
Minnesota for the very vehicles that the plaintiffs alleged
malfunctioned and injured them in those states,” thus
establishing a “strong ‘relationship among the defendant,
the forum, and the litigation’—the ‘essential
foundation’ of specific jurisdiction.”9 Indeed,
the Court emphasized that “this exact fact pattern (a
resident-plaintiff sues a global car company, extensively serving
the state market in a vehicle, for an in-state accident)”
constituted “a paradigm example . . . of how specific
jurisdiction works.”10

A New Test for Personal Jurisdiction?

One pressing question is whether Ford announces a new,
expanded test for assessing specific jurisdiction. The Court’s
opinion disclaims any doctrinal shift, insisting that the Court is
adhering to historical and recent precedents. The concurring
opinions of Justices Alito and Gorsuch imply otherwise, suggesting
that the Court’s “relate to” test unnecessarily (and
imprudently) expands the number of forums that may exercise
jurisdiction over a defendant.

To parse this question, let’s take stock of what we know and
don’t know from the Ford opinion.

What We Know

Causation is not necessary. In order to
establish specific jurisdiction, a plaintiff does not need to prove
that his injury was caused by the defendant’s in-state
activity. Throughout the case, Ford maintained that its activities
in Montana and Minnesota had no “causal link” to the
plaintiffs’ injuries because Ford did not design, manufacture
or sell the particular vehicles involved in the accidents in those
states. Ford may have marketed and serviced the very same vehicle
models in Montana and Minnesota, but (in Ford’s view) the
plaintiffs’ injuries would have happened regardless of
its activities—thus, no causation. Justice Kagan did not beat
around the bush in rejecting this theory: “Ford’s
causation-only approach finds no support in this Court’s
requirement of a ‘connection’ between a plaintiff’s
suit and a defendant’s activities.”11 Going
forward, plaintiffs need not establish that their claims “came
about because of the defendant’s in-state
conduct.”12

Relatedness is key. Though plaintiffs don’t
need to show causation, Justice Kagan emphasized that the specific
jurisdiction test still “incorporates real limits, as it must
to adequately protect defendants foreign to a
forum.”13 It’s not true that
“anything goes.”14 The relationship between
the forum state, the parties, and the case still matters, and if
the relationship isn’t strong enough, there will be no
jurisdiction.

To flesh out this point, the Court articulated some types of
“relatedness” that will matter in future tort cases. Two
relevant connections include the location of the injury and the
residency of the plaintiff. Justice Kagan thought it obvious that a
California court could not hear a claim against Ford brought by an
Ohio plaintiff based on an accident occurring in Ohio involving a
car purchased in Ohio.15 That claim, according to
Justice Kagan, did not sufficiently “relate to”
Ford’s business dealings in California. In contrast
here, the Court emphasized that Ford had “served a market in
Montana and Minnesota for the very vehicles that the plaintiffs
allege malfunctioned and injured them in those
States.”16 As such, manufacturers in future cases
likely will argue that the marketing of products or services in the
forum that differ from those that injured the plaintiff are
insufficient to establish the necessary relationship with the
forum. (Though as discussed below, just how different the
product or service must be remains an open question.)

The Court also took pains to emphasize that relatedness between
a defendant’s in-state contacts and the claim at issue will
prevent blurring the line between general and specific
jurisdiction. Simply doing business in a forum—even extensive
business—will not subject a defendant to suit there for
claims unrelated to the forum. For such “general
jurisdiction” to lie, a defendant must be “essentially at
home” there. The Court’s decision in Ford dealt
only with specific jurisdiction. Thus, even after Ford,
general jurisdiction over corporations is almost always limited to
suits filed in their place of incorporation or principal place of
business.

Jurisdictional facts matter, maybe a lot. The
Court did not purport to impose any new bright-line rule about
specific jurisdiction. Indeed, the Court was careful to avoid
implying that marketing one type of good in a state
automatically opens a manufacturer to liability claims for
any type of good marketed in that state. Quite the
opposite—the Court emphasized several additional factors that
supported jurisdiction in Montana and Minnesota: (1) the plaintiffs
were state residents; (2) Ford had “systematically
served” the markets in those states; (3) Ford marketed
“the very vehicles that the plaintiffs allege
malfunctioned”; and (4) these particular types of vehicle
injured the plaintiffs in each state.17 From the
Court’s discussion of these factors, it seems likely that,
going forward, lower courts should consider: whether the plaintiff
is a state resident; the pervasiveness of the defendant’s
contacts with the state; the closeness of the type of product or
service marketed to the one that injured the plaintiff; and the
location of the events that injured the plaintiff.

In future cases where the location of the plaintiff and injury
are objectively ascertainable—and with causation no longer
serving as a limitation—courts will likely focus on the
pervasiveness of the defendant’s contacts and the degree of
similarity between the products or services marketed in the forum
and those at issue in the lawsuit. The Court’s opinion in a
footnote previewed the type of line-drawing dispute likely to come
next: Justice Kagan contrasted Ford’s extensive activities in
Montana and Minnesota with “sporadic transactions” that a
business might have with another state that likely would not
suffice to support specific jurisdiction.18 Echoing a
hypothetical discussed at oral argument, Justice Kagan suggested
that a Maine resident who sells defective duck decoys on the
Internet probably can’t be sued in each and every state where
the decoy causes harm.19 In other words, contacts made
through “internet transactions” might not be systematic
in the same way as Ford’s contacts, although the Court
expressly declined to “consider internet transactions, which
may raise doctrinal questions of their own.”20

What We Don’t Know

What constitutes a sufficient “connection”
between contacts and claims? We know that the relatedness
test does not require a showing of factual causation. But how
strong or “related” must the connection be between a
defendant’s forum contacts and the claims?

Justice Kagan’s opinion made it clear that Ford was not some
fly-by-night operator in Montana and Minnesota. She repeatedly
emphasized that “Ford did substantial business in the
State—among other things, advertising, selling, and servicing
the model of vehicle the suit claims is
defective,”21 noting that the company
“conceded [its] ‘purposeful availment’ of the two
States’ markets.”22 The Court further concluded
that Ford’s purposeful availment created strong bonds with
Montana and Minnesota and its customers there. The company’s
advertising in the states “urg[ed] Montanans and Minnesotans
to buy its vehicles, including (at all relevant times) Explorers
and Crown Victorias,” the precise models at
issue.23 Plus, Ford cars, including these models, are
available for sale “at 36 dealerships in Montana and 84 in
Minnesota,” and Ford also “works hard to foster ongoing
connections to its car owners” by distributing replacement
parts and, through its dealers, maintaining and repairing
cars.24 These activities not only make Ford money, they
also make it easier for customers in Montana and Minnesota to own
Ford cars, even “encourag[ing] Montanans and Minnesotans to
become lifelong Ford drivers.”25

It is telling the extent to which the Court emphasized these
connections that Ford sought to foster with Montana and Minnesota
and its customers in those states. (Justice Kagan’s impassioned
recitation of the emotional bonds formed by Ford’s advertising
campaigns evokes images of Don Draper and his Mad Men
cohort.26) But there is reason to think this description
is more than just narrative color; rather, parties and courts will
likely rely on this discussion to help demarcate the boundaries of
specific jurisdiction.

The relatedness requirement raises other issues worth
considering. First, in emphasizing that Ford had
“systematically served a market in Montana and Minnesota for
the very vehicles that the plaintiffs alleged malfunctioned and
injured them in those States,” the Court stated that it was
not addressing a situation where Ford marketed the models only in a
different state or region.27 Maybe the outcome would
have been different if Ford had never sold the models at issue in
Montana or Minnesota? Lower courts will need to clarify this issue,
just as they will need to consider a second, related point. The
Court repeatedly stated that Ford had extensively marketed in the
forums “the very vehicles” that caused the
plaintiffs’ injuries. Would it have made a difference to the
outcome if Ford had only marketed the 1995 and 1997 Explorers, but
not the 1996 model year, in Montana? Again, the Court’s opinion
does not provide a great deal of guidance on just how similar the
products need to be in order to support specific jurisdiction.

Finally, Justice Kagan observed that the two jurisdictions where
the vehicles at issue were sold originally by Ford—Washington
and North Dakota—arguably had even less connection to the
claims at issue than Montana and Minnesota. She pointed out how
anomalous it seemed for Ford to offer the place of original sale as
the proper forum for litigation of the plaintiffs’ claims. But,
as Justice Gorsuch pointed out in his concurring opinion, the Court
did not say that those states would lack specific jurisdiction over
Ford for the plaintiffs’ claims. This suggests that relatedness
may be somewhat more encompassing than the Court’s opinion
implies, or it could mean that the line between when a claim
“arises out of” or “relates to” the
defendant’s conduct is not clearly demarcated.

How will the fact-intensive inquiry affect threshold
pleading and defenses? The Ford opinion does not
offer guidance on how challenges to personal jurisdiction might
unfold going forward, including when and what sort of
jurisdictional discovery courts should permit. When a defendant
uses a declaration or other evidence to dispute the plaintiff’s
jurisdictional allegations in support of a motion to dismiss for
lack of personal jurisdiction, plaintiffs often seek permission to
conduct jurisdictional discovery. But mindful that jurisdictional
discovery can easily morph into full-blown merits discovery, many
courts have attempted to maintain limits on the availability and
scope of discovery that they allow before ruling on a
defendant’s challenge to personal jurisdiction.

Will Ford change this, altering how parties litigate
and courts decide personal jurisdiction motions? The Court did not
mention jurisdictional discovery in Ford—in fact,
the word “discovery” does not appear in any of the three
opinions. But it does not take a crystal ball to envision what will
happen next. If personal jurisdiction after Ford
increasingly turns on whether a defendant has pervasive contacts
with a forum—including the type of its products that are sold
in a forum and the relationships it cultivates within the forum
with dealers and customers alike—then it is easy to see
plaintiffs increasingly attempting to use jurisdictional discovery
to explore disputed factual issues that relate to the merits, as
well. This outcome could also invite forum shopping, making it more
likely that plaintiffs file suit in their preferred forum and then
use jurisdictional discovery to fill in the blanks to determine the
extent of a defendant’s forum contacts. If so, perhaps wary
judges will become even more diligent in supervising jurisdictional
discovery while trying to discourage the filing of lawsuits on
jurisdictionally questionable grounds.

What about contracts? Does the Court’s
analysis of “relatedness” govern only in cases involving
single-product tort injuries, like the ones against Ford? Much of
the Court’s analysis was tort-specific but not expressly so.
Will Ford shake up the specific jurisdiction inquiry in
contract and commercial cases, too? Traditionally, specific
jurisdiction in these cases will focus on the place where the
contract is performed or possibly where it was negotiated or
executed. But is that focus now too narrow? Consider, for example,
a contract dispute involving a product’s purchaser and a
manufacturer-supplier. Under Ford, would there be specific
jurisdiction in the place where the manufacturer-supplier designed
and manufactured the product, even if the purchaser is not located
there and the contract was not negotiated or executed there?

Courts will have to wrestle with these questions in the coming
weeks, months and perhaps years to come.

Changing of the Guard

For the past decade, Justice Ruth Bader Ginsburg has been the
Court’s standard-bearer on issues of personal jurisdiction. And
she did so through consensus. Among her notable decisions, Justice
Ginsburg wrote for a unanimous Court in Goodyear Dunlop Tires
Operations, S.A. v. Brown28 and Daimler AG v.
Bauman,29 and her opinion in BNSF Railway Co.
v. Tyrell30 was joined by seven colleagues. Each of
those decisions placed meaningful limits on courts’ exercise of
jurisdiction over out-of-state defendants. Those opinions also
added welcome clarity in an area of law that often felt like
we-know-it-when-we-see-it.

Ford is the current Court’s first personal
jurisdiction decision without Justice Ginsburg and it may signal a
changing of the guard. Justice Kagan’s opinion for the Court,
like those of Justice Ginsburg, did not generate any dissent. That
unanimity is particularly striking because Ford reverses
the Court’s modern trend of limiting a court’s
jurisdictional reach. Perhaps that unanimity signals that
Ford is not a watershed moment for personal jurisdiction
after all, but simply the application of established doctrinal
principles to a familiar fact pattern. Certainly that is what
Justice Alito thought; he concurred separately to emphasize that
the Ford case could be decided without shifting anything
in existing precedent.

One thing is certain, however. Battles over personal
jurisdiction are far from over.

Arnold & Porter has a distinguished history of advising
and representing clients on cross-border issues and personal
jurisdiction, including the firm’s win in the landmark case
Bristol-Myers Squibb Co. v. Superior Court of California, 137 S.
Ct. 1773 (2017).

Footnotes

1 Ford Motor Co. v. Mont. Eighth Judicial Dist.
Ct., 592 U.S. —, — S. Ct. —, 2021 WL 1132515 (Mar. 25,
2021).

2 Id., slip op. at 6
(quoting Bristol-Myers Squibb Co. v.
Superior Ct. of Cal., San Francisco Cty.,137 S. Ct. 1773, 1780
(2017)).

3 Id. (quoting Walden v.
Fiore, 571 U.S. 277, 285 (2014)).

4 Id., slip op. at 8
(quoting Bristol-Myers Squibb Co., 137 S. Ct. at
1781).

5 Id.

6 Id., slip op. at 9.

7 Id., slip op. at 11–12.

8 Id., slip op. at 12.

9 Id. (quoting Helicopteros
Nacionales de Colombia, S.A. v. Hall, 466 U.S. 408, 414
(1984)).

10 Id. (citing Daimler AG v.
Bauman, 571 U.S. 117, 127 n.5 (2014)).

11 Id., slip op. at 8
(quoting Bristol-Myers Squibb Co., 137 S. Ct. at
1781).

12 Id., slip op. at 9.

13 Id.

14 Id., slip op. at 8.

15 Id., slip op. at 9 n.3.

16 Id., slip op. at 12.

17 Id.

18 Id., slip op. at 12 n.4.

19 Id., slip op. at 12–13 n.4.

20 Id.

21 Id., slip op. at 1.

22 Id., slip op. at 11.

23 Id.

24 Id., slip op. at 11–12.

25 Id., slip op. at 12.

26 Id., slip op. at 2 (discussing various Ford
advertising slogans).

27 Id., slip op. at 12.

28 564 U.S. 915 (2011).

29 571 U.S. 117 (2014).

30 137 S. Ct. 1549 (2017).

The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.