Chemerinsky: Despite SCOTUS ruling, questions of personal jurisdiction remain unsettled
Erwin Chemerinsky. Photo by Jim Block.
For the last two decades, the U.S. Supreme Court has consistently restricted the ability to sue out-of-state defendants without their consent. But in Ford Motor Co. v. Montana Eighth Judicial District, the court allowed an out-of-state company to be sued.
The decision, handed down in March, is important in clarifying the law of personal jurisdiction, but it also raises many questions that will confront lower state and federal courts and ultimately need Supreme Court resolution.
Every first-year law student in civil procedure reads the famous case of International Shoe v. State of Washington (1945). Before this case, the court long had ruled that due process limits the ability to sue an out-of-state defendant without its consent. In International Shoe, the Supreme Court held that unless the defendant consents to jurisdiction of the court, an out-of-state defendant can be sued only if it has “minimum contacts” with a state.
The court found that the activities of the sales personnel of an out-of-state shoe company—exhibiting samples of merchandise and soliciting orders from prospective buyers—were systematic and continuous and resulted in a large volume of interstate business. The court thus found personal jurisdiction and concluded that it is constitutionally permissible when a defendant has minimum contacts with the state where a lawsuit is brought such that notions of fair play and substantial justice would not be offended.
In the decades after International Shoe, the court found two ways of finding minimum contacts: general jurisdiction and specific jurisdiction. Both have been greatly narrowed in recent years. It used to be that general jurisdiction could be found if the defendant, in the words of International Shoe, had “continuous and systematic” contacts with the state.
But in cases such as Goodyear Dunlop Tires Operations v. Brown (2011) and Daimler AG v. Bauman (2014), the court held that general jurisdiction exists only when a defendant is “essentially at home” in the state. An individual is subject to general jurisdiction in his or her state of domicile, and a corporation is “home” in the state where it is incorporated or has its principal place of business.
Specific jurisdiction exists where the defendant’s contacts with the state give rise to the cause of action. The court has restricted this, too, in recent years. For example, in Walden v. Fiore (2014), the court stressed that it is not enough that the defendant’s conduct would foreseeably cause injury in a state; there is not personal jurisdiction if the defendant did not have the contacts with the state where the suit is brought.
Most recently in Bristol-Myers Squibb Co. v. Superior Court of California, San Francisco County, (2017), the Supreme Court refused to allow out-of-state plaintiffs to sue a drug company for harms they suffered, even though they were part of a lawsuit brought by plaintiffs of the state who had suffered the same injury.
The court said, quoting Goodyear, that for specific jurisdiction, “there must be ‘an affiliation between the forum and the underlying controversy,’ principally, [an] activity or an occurrence that takes place in the forum state and is therefore subject to the state’s regulation.’” The court stressed that personal jurisdiction is not only about fairness to the defendant; it also is about the constitutional reach of a state’s territorial authority.
There is no doubt that this trend in the law greatly favors defendants, making it harder to hale them to other states to be sued and making it more difficult for plaintiffs to bring suits in forums that are most convenient for them. In light of this trend, the question was how much further the court would go in limiting personal jurisdiction.
Suits against Ford Motor Co.
Two cases came to the Supreme Court together that involved individuals who had been injured in Ford motor vehicles. Markkaya Gullett was driving a 1996 Ford Explorer near her home in Montana when the tread separated from a rear tire. The vehicle spun out, rolled, and came to rest upside down. She died in the accident, and her estate sued Ford in Montana.
Adam Bandemer was a passenger in his friend’s Ford Crown Victoria in Minnesota, where he lived. The car was in an accident, and Bandemer’s air bag failed to deploy. He was severely injured, suffering serious brain damage. He sued Ford in Minnesota state court.
Ford moved to dismiss both suits for lack of personal jurisdiction. There was no general jurisdiction because Ford was not incorporated and did not have its principal place of business in either Montana or Minnesota. Ford argued that there was not specific jurisdiction because in neither case had its contact with the states given rise to the cause of action there.
Ford emphasized that in neither instance had it sold the cars in the state where the accident occurred; the Explorer was initially sold in Washington and the Crown Victoria in North Dakota. As the court noted, “only later resales and relocations by consumers had brought the vehicles to Montana and Minnesota.” Ford said that it had designed the Explorer and Crown Victoria in Michigan, and it had manufactured the cars in (respectively) Kentucky and Canada.
Supreme Court finds personal jurisdiction
The high court ruled against Ford in both cases, issuing a single opinion. The result was unanimous, with Justice Elena Kagan writing for five justices. Justice Samuel A. Alito wrote an opinion concurring in the judgment, as did Justice Neil M. Gorsuch joined by Justice Clarence Thomas. Justice Amy Coney Barrett did not participate because she was not on the bench when the cases were argued in October 2020.
The court declared: “When a company like Ford serves a market for a product in a state, and that product causes injury in the state to one of its residents, the state’s courts may entertain the resulting suit.” Kagan’s majority opinion stressed two factors in finding specific jurisdiction: purposeful availment and relatedness.
As for the former, the court said that Ford had purposely availed itself of both Montana and Minnesota in its marketing, sales and servicing of cars in those states. The court noted: “By every means imaginable—among them, billboards, TV and radio spots, print ads, and direct mail—Ford urges Montanans and Minnesotans to buy its vehicles, including (at all relevant times) Explorers and Crown Victorias. Ford cars—again including those two models—are available for sale, whether new or used, throughout the states, at 36 dealerships in Montana and 84 in Minnesota.”
As for relatedness, the court stressed that “Ford 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.”
The fact that the vehicles were purchased in other states did not matter. The court explained that Ford’s marketing in these states and the availability of its service there well could have caused these plaintiffs to purchase the Ford vehicles.
Questions left open
The court’s decision is notable, in part, simply because for the first time in years the justices were willing to find personal jurisdiction over an out-of-state defendant. The decision will be important in countless cases for its clarification that specific jurisdiction is to be determined by purposeful availment and relatedness.
But many questions remain. First, how is this case different from Bristol Myers Squibb v. Superior Court, decided just four years earlier? That case involved out-of-state plaintiffs (as well as in-state plaintiffs) suing a major corporation that aggressively marketed and sold drugs in the state where it was sued. And the lawsuit was for a particular drug that it regularly sold in that state.
In her opinion in Ford Motor Co. v. Montana Eighth Judicial District, Kagan distinguished the case based on the plaintiffs. She said that in Bristol Myers Squibb, the plaintiffs had not been prescribed the drug, Plavix, in California, and they had not ingested it there or been injured there.
She said: “In short, the plaintiffs were engaged in forum-shopping—suing in California because it was thought plaintiff-friendly, even though their cases had no tie to the state.” But personal jurisdiction always has focused on the defendant’s contacts with the forum state. Now has the court explicitly made the plaintiff’s contacts important in personal jurisdiction analysis as well?
Second, what does it mean to “serve the market”? What does it mean to “[cause] injury in the state”? This was an easy case given Ford Motor Company’s size and aggressive marketing in these states. But there is going to be much litigation over how to apply the court’s holding and how these lines are to be drawn.
Third, what will be the importance of the opinions concurring in the judgment, especially Gorsuch’s? Gorsuch questions International Shoe and especially the distinction between general and specific jurisdiction (which he mistakenly attributes to that decision).
Alito, in his opinion, says, “To be sure, for the reasons outlined in Justice Gorsuch’s thoughtful opinion, there are grounds for questioning the standard that the court adopted in International Shoe Co. v. Washington.” Might this suggest future, even more major changes in the law of personal jurisdiction in the future?
Erwin Chemerinsky is dean of the University of California at Berkeley School of Law. He is an expert in constitutional law, federal practice, civil rights and civil liberties, and appellate litigation. He’s the author of several books, including The Case Against the Supreme Court (Viking, 2014). His latest book is The Religion Clauses: The Case for Separating Church and State, written with Howard Gillman (Oxford University Press, 2020).