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It’s Déjà Vu All Over Again: Supreme Court To Revisit the Scope of Specific Jurisdiction

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    February 3, 2020

    For the seventh time in the past ten years, the United States Supreme Court has agreed to address the contours of personal jurisdiction over out-of-state defendants. The question presented, in two consolidated product liability cases, is whether a lawsuit can be said to “arise out of or relate to” a defendant’s contacts with the forum state1 when none of those contacts caused the plaintiff’s claims. The Court’s decision may help clarify where specific jurisdiction lies over manufacturers of nationally distributed products or portable products that may be sold in one state and then transported to another. 

    On January 17, the Court granted certiorari in cases from Montana and Minnesota involving crashes of Ford vehicles.2 The plaintiff in the Montana case was killed when a tire tread on her Ford Explorer separated and the vehicle rolled into a ditch. Her Explorer had been manufactured in Kentucky, and a dealership in Washington State had first sold it to a resident of Oregon. In the Minnesota case, the plaintiff suffered a severe brain injury when the Crown Victoria in which he was riding rear-ended a snow plow. He alleged that the passenger-side airbag had failed to deploy. The vehicle was designed in Michigan and assembled in Canada; its fourth owner registered it in Minnesota 17 years later. Each accident occurred in the forum state.

    Neither plaintiff’s accident involved a vehicle designed, manufactured, or originally sold in the forum state. Nevertheless, both the Montana and Minnesota courts affirmed findings of specific jurisdiction over Ford. The Montana Supreme Court applied a “stream of commerce plus” theory, citing Ford’s advertising and sales in Montana, to hold that Ford had “purposefully availed itself” of the privilege of doing business in the state. The Minnesota Supreme Court ruled that no causal connection is required between the defendant’s contacts with the forum and the plaintiff’s claims. Rather, due process was satisfied by such factors as Ford’s sales of thousands of Crown Victorias in the state, the location of the accident, the registration of the car in Minnesota, and the plaintiff’s treatment in the state.

    Ford’s certiorari petitions pointed to “a deep conflict,” unanswered by the Court in its most recent specific jurisdiction decision, Bristol-Myers Squibb Co. v. Superior Court of California, 137 S. Ct. 1773 ( 2017), about the degree of connection between the plaintiff’s claims and the defendant’s contacts that must be shown if the exercise of specific jurisdiction is to satisfy due process. Ford identified four different approaches to the issue in the federal circuits and the highest courts of several states.

    Over the past decade, the Roberts Court has repeatedly revisited both general and specific jurisdiction, using the Due Process Clause to limit the reach of lawsuits against non-residents. It has held that, absent exceptional circumstances, corporations are “at home,” and therefore subject to general jurisdiction, only in their states of incorporation or principal place of business.3 It has rejected the “stream-of-commerce” metaphor as a basis for jurisdiction.4 It has ruled that jurisdiction can be based only on the defendant’s contacts with the forum, not those of the plaintiff.5 And in Bristol-Myers Squibb, it refused to allow state courts to assert specific jurisdiction over the claims of non-resident mass tort plaintiffs who did not allege any harm within the state.6

    Still, there are significant unanswered questions beyond those presented in the two cases to be reviewed: Does Bristol-Myers Squibb apply to class actions?7  Does it apply in federal courts?8 Does registering to do business in the state constitute consent to be sued there on claims unrelated to the state or the defendant’s contacts with the state?9 Answers to any or all of these questions could have a dramatic impact on manufacturers and other nationwide businesses. As cases raising these questions work their way through trial and appellate courts, look to the Supreme Court’s decision in the Ford cases for a signal of what may next come before the Court and, possibly, of how the Court might be inclined to rule.

    For more information, please contact the professional(s) listed below, or your regular Crowell & Moring contact.

    1 Burger King Corp. v. Rudzewicz, 471 U.S. 462, 472 (1985).

    2 Ford Motor Co. v. Montana Eighth Judicial District Ct., 443 P.3d 407 (Mont. 2019); Bandemer v. Ford Motor Co., 931 N.W.2d 744 (Minn. 2019).

    3 Daimler AG v. Bauman, 571 U.S. 117, 132, 137 (2014); BNSF Railway Co. v. Tyrell, 137 S. Ct. 1549, 1559 (2017).

    4 Goodyear Dunlop Tires Ops., S.A. v. Brown, 564 U.S. 915, 926-27 (2011); J. McIntyre Machinery, Ltd. v. Nicastro, 564 U.S. 873, 882-83 (2011).

    5 Walden v. Fiore, 571 U.S. 277, 285 (2014).

    6 Bristol-Myers Squibb Co. v. Superior Ct., 137 S. Ct. 1773, 1780 (2017).

    7 E.g., Molock v. Whole Foods Mkt., Inc., 297 F. Supp. 3d 114, 126-27 (D.D.C. 2018) (finding “a substantial ground for difference of opinion” and certifying interlocutory appeal); Mussat v. IQVIA Inc., No. 17 C 8841, 2018 WL 5311903, at *5 (N.D. Ill. Oct. 26, 2018) (applying Bristol-Myers Squibb and granting motion to strike claims of out-of-state class members).

    8 See Bristol-Myers Squibb, 137 S. Ct. at 1784 (“[W]e leave open the question whether the Fifth Amendment imposes the same restrictions on the exercise of personal jurisdiction by a federal court.”).

    9 See, e.g., Allstate Ins. Co. v. Klein, 422 S.E.2d 863 (Ga. 1992) (finding that registration to do business was sufficient basis on which to found the fiction of corporate defendant’s “presence” in Georgia for purposes of general jurisdiction); Webb-Benjamin, LLC v. Int’l Rug Group, LLC, 192 A.3d 1133 (Pa. Super. 2018) (holding that registration subjected foreign corporation to general jurisdiction under Pennsylvania’s jurisdictional statute).

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