Have State Courts Expanded Personal Jurisdiction Too Far?

The Due Process Clause of the Fourteenth Amendment, U.S. Const. amend. XIV, § 1, provides: “[N]or shall any State deprive any person of life, liberty, or property, without due process of law.” Ford Motor Company believes both the Minnesota Supreme Court and the Montana Supreme Court violated the Fourteenth Amendment by ruling their state courts have personal jurisdiction over Ford in two product liability actions. This issue now is before the United States Supreme Court.1

The Bandemer Case (No. 19-369): In 2015, plaintiff Adam Bandemer, a Minnesota resident, was a passenger in a 1994 Ford Crown Victoria. He alleges the car’s passenger-side airbag did not deploy in a crash and that he suffered a severe brain injury as a result. He sued Ford, the vehicle’s driver, and the vehicle’s owner in Minnesota state court. Ford moved to dismiss the claims for lack of personal jurisdiction. The Crown Victoria was not designed, manufactured, or originally sold in Minnesota. It was first registered in Minnesota in 2011, seventeen years after it was manufactured, by its fourth owner. The Minnesota Supreme Court (Adam Bandemer v. Ford Motor Co., No. A17-1182 (Minn. July 31, 2019), 931 N.W.2d 744) affirmed the denial of Ford’s motion to dismiss for lack of personal jurisdiction.

The Lucero Case (No. 19-368): In 2015, plaintiff Markkaya Gullett, a Montana resident, was driving a Ford Explorer along a Montana highway when the tread on one of the tires separated. Gullett died in the resulting accident. The personal representative of her estate sued Ford in Montana state district court. Ford assembled the vehicle in Kentucky and first sold it in Washington State. The Explorer subsequently was sold to an Oregon resident and later was purchased and brought to Montana. Ford moved to dismiss the claims for lack of personal jurisdiction. The Montana Supreme Court (Ford Motor Co. v. Lucero, No. OP 19-0099 (Mont. May 21, 2019), 443 P.3d 407) affirmed the denial of Ford’s motion to dismiss for lack of personal jurisdiction.

Personal Jurisdiction: SCOTUS decisions recognize two types of personal jurisdiction: general jurisdiction (sometimes called all-purpose jurisdiction) and specific jurisdiction (sometimes called case-linked or limited jurisdiction). Under a general jurisdiction analysis, plaintiffs may sue defendants on causes of action unrelated to their activities in the state. General jurisdiction can be exercised in states in which the corporate defendant “is fairly regarded as at home”. Daimler AG v. Bauman, (2014) 571 US 117, at 137. The most common general jurisdiction states are the states of incorporation and principal place of business. The parties in Bandemer and Lucero agreed that Ford, which is based in Michigan and incorporated under Delaware law, is not subject to general personal jurisdiction in Minnesota and Montana.

If a defendant’s contacts with a forum state are not sufficient to establish general jurisdiction, the defendant still might be subject to personal jurisdiction on claims related to its activities in the forum state under a specific personal jurisdiction analysis. Burger King v. Rudzewicz, 105 S.Ct. 2174 (1985). The plaintiff’s cause of action must arise out of or relate to the foreign corporation’s activities in the forum state. The analysis focuses on the relationship between the defendant, the forum state, and the litigation. Defining “arise out of or relate to” has not been easy.

The question presented in the Bandemer and Lucero cases is whether there is a link between the plaintiffs’ suits and anything Ford has done in Montana and Minnesota that will support specific personal jurisdiction over Ford on plaintiffs’ claims.

Ford’s Position: Ford argues that state supreme courts have adopted varying approaches to making specific personal jurisdiction decisions and that SCOTUS should adopt a single, simple, straightforward test courts can apply to assure themselves of their power to hear cases. It also believes court decisions have eviscerated the distinction between general and specific personal jurisdiction. Ford advocates for a test that requires a finding that the nonresident defendant’s in-state conduct directly caused or gave rise to the plaintiff’s claims.

The Minnesota Supreme Court held that so long as a defendant’s in-forum actions merely relate in some unspecified way to a plaintiff’s claim that there is specific jurisdiction. The court focused on the facts that Ford sold thousands of Crown Victoria vehicles to Minnesota dealerships, collects data on how its cars perform, and uses that data to inform improvements to its designs and to train mechanics. Ford also directs marketing and advertisements directly to Minnesotans, and a Minnesotan bought the Ford vehicle in question.

The Montana Supreme Court held that when the plaintiff would have suffered the same injuries and thus had the same claims, even if the defendant had never made contact with the forum state, specific jurisdiction exists. The court’s position is that so long as Ford advertises, sells, and services vehicles in Montana, Ford may be sued in the state on any claim involving a Ford vehicle, even if Ford took no action in Montana involving the subject vehicle. The Montana Supreme Court focused on the facts that Ford delivers vehicles and parts into the state with the expectation Montanans will purchase them and that Ford advertises in Montana and sells and repairs vehicles in the state. Given these facts, the plaintiff’s claims relate to Ford’s Montana activities and Ford could reasonably foresee the vehicle in question being used in Montana. Furthermore, the court determined Montana’s exercise of personal jurisdiction is reasonable as Montana has an interest in adjudication disputes involving Montanans occurring in the state.

Ford advocates for a specific jurisdiction test that does not focus on the plaintiff’s contacts with the forum state, but that requires some causal connection to a specific act the defendant took in, or aimed at the forum state. There must be a causal connection between the defendant’s forum state contacts and the plaintiff’s claims. Due process limits are supposed to give a degree of predictability so potential defendants can structure their conduct with some minimum assurance as to where that conduct will and will not render them liable to suit. The two court decisions in question do not accomplish that goal.

Respondents’ Position: Respondents argue Ford’s position will result in irrational results. For example, a Montana resident who bought a vehicle in Montana could hold Ford accountable for injuries sustained in-state. However, a Montana neighbor who purchased an identical vehicle and suffered identical injures in Montana could not bring the same claim if the vehicle was originally purchased in a different state. The jurisdictional standard should not be a required showing that the particular individual product that caused the injury can be traced to the defendant’s direct contacts with the forum state such as designing, manufacturing, or originally selling the particular product that caused the injury.