Case preview: Defining “relatedness” in private jurisdiction

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From 1990 to 2010, the Supreme Court did not rule cases on personal jurisdiction, the legal doctrine that controls when a defendant can be compelled to litigate within a state. For the sake of perspective, Judge David Souter joined the court in the fall of 1990 and retired in the summer of 2009 without hearing a case of personal jurisdiction. However, since 2010, personal jurisdiction has been a hot topic on the court record. The most recent case, Ford Motor Co. v Montana Eighth Judicial District (consolidated with Ford Motor Co. v Bandemer), examines whether the state courts in Montana and Minnesota have personal jurisdiction over two lawsuits against Ford, which sells cars in both states produced and sold the specific cars in question outside of the state. The court has postponed this case from last term and will argue by phone on Wednesday.

background

Ford Motor Co. is headquartered in Michigan and incorporated in Delaware. The company designs and manufactures automobiles which it sells to independent dealers across the country.

The eighth judicial district of Montana emerged from a 2015 accident in Montana that involved a 1996 Ford Explorer that killed driver Markkaya Jean Gullet. Ford sued her estate in a state court in Montana for construction defects, lack of warning and negligence. Gullett's car was assembled in Kentucky, sold to a Washington car dealership, and originally sold to an Oregon consumer. It went through numerous sales before reaching Gullett in Montana.

Bandemer originated in a 2015 Minnesota accident with a 1994 Ford Crown Victoria that injured passenger Adam Bandemer. Bandemer sued Ford in a Minnesota state court, claiming product liability, negligence, and breach of warranty. The car involved in the accident was designed in Michigan, assembled in Ontario, Canada, and sold to a North Dakota dealership. The vehicle was with its fifth owner when it was registered in Minnesota in 2013.

Personal responsibility

The basic analytical framework for personal jurisdiction is known and undisputed.

The exercise of personal jurisdiction of a state court must be consistent with the requirements of Amendment 14, which does not require a person to be deprived of life, liberty or property without due process. To be subject to jurisdiction in a state consistent with due process, a defendant must have "certain minimum contacts so that the continuation of the lawsuit does not violate traditional ideas of fair play and substantive justice". The court distinguishes general personal jurisdiction from specific personal jurisdiction. General jurisdiction means that a defendant must bring an action in a state for all claims, while specific jurisdiction means that a defendant is subject to actions that are in some way related to the defendant's contacts with the state.

The touchstone for general jurisdiction is when the defendant is “home,” which is the company's principal place of business and state of incorporation. Ford is not "at home" in Montana or Minnesota.

The plaintiffs must therefore establish a specific jurisdiction for Ford, which includes a three-stage investigation. Ford must have contacts with the forum state, for example by selling, marketing, advertising or otherwise providing services to that state or by placing its products in the state's "trade flow". These contacts with the state must “establish or relate to” the claim (or, in other words, the claim must “arise from or relate to the contacts”). And it can't be inappropriate to ask Ford to litigate. It is undisputed that Ford has minimal contact with both states due to the sale, marketing and shipping of cars there. Nor can Ford raise the necessary “imperative” that it would be unreasonably burdensome to litigate in either state.

This case concerns the second point of the investigation into the specific jurisdiction: When do the contacts of a defendant give rise to or relate to the claim?

Ford's arguments

Ford focuses on the fact that it did nothing in either state regarding the cars involved in the accidents. Ford didn't play a role in getting a car into forum status. Gullett's car was assembled in Kentucky, sold by Ford to a Washington dealership, and brought to Montana through several sales, none of which were related to Ford. The car that Bandemer drove in was designed in Michigan, assembled in Canada, sold to a North Dakota dealership, and went through multiple owners, none of whom were associated with Ford, before reaching an owner in Minnesota in 2013.

Ford argues that "giving rise to" and "relating to" are synonyms that define a single concept. Although they are grouped into a single standard – contacts must “substantiate or relate to” the claim – the terms are no different, the company said. In some recent cases the latter term is omitted in favor of the former. And two sentences don't have to mean two concepts; The law often repeats accompanying terms to express an idea and a standard – for example, “fair play and substantial justice”, also within the scope of personal responsibility.

Although two avenues are given, the singular concept requires a causal relationship between the contacts and the litigation. The accused's state contact must be “complaint-related”. It cannot be conduct towards third parties that is "similar" to the conduct in question in the lawsuit. Ford's contacts with the states must have roughly caused Gullett and Bandemer's claims – Ford must have taken or directed action against the states, and those actions must be what the plaintiffs are trying to remedy by taking their claims to a state Bring judgment. This approach, Ford argues, ensures that defendants are adequately warned where certain activities may bring them under the jurisdiction of a state's judicial system. Knowing what it has done and where, Ford can structure its behavior so that a particular forum will not be sued if so requested.

According to Ford, the lower courts have made a mistake in treating "referring to" as a clear standard that does not require causality. This flawed approach, writes Ford, inadmissibly allows jurisdiction based on the defendant's contacts with third parties in the forum states if enough of those third-party contacts are “similar” or similar to the subject of the lawsuit.

Ford admits it does business in both states; It does marketing and advertising in both states, provides services in both states, and delivers cars to dealerships in both states. However, in these cases, it is not under the jurisdiction as these government business activities did not cause either of the violations. Ford did not sell or ship the cars in question to the forum states; Ford's actions that caused the injuries were outside of the state. The claims of Gullett's estate and Bandemer would be "exactly the same if Ford had never done anything in Montana and Minnesota".

USA as Amicus Curiae

The United States appears as a "friend of the court" in support of Ford, even though the court denied the lawyer access to the general dispute.

The United States argues that a state court cannot have specific jurisdiction over a claim arising out of the sale of a product outside of the state; It is just a coincidence that the manufacturer sells the same type of product within the state or has extensive general connections with the state. This is the essential distinction between general and specific jurisdiction – the former is the power of a state over its citizens and corporations, while the latter is the power of a state over extra-state corporations in litigation related to that corporation's state business.

But the United States rejects Ford's call for a causal link between contacts and claim as "not valid". This approach ignores Ford's behavior towards the state as a whole. It would create different standards of personal jurisdiction for different types of cases, while the court requires that the same general rules apply to all. This would make the analysis more difficult due to the introduction of complex factual questions.

The government concludes by emphasizing that these cases include jurisdiction restrictions on state courts under the 14th Amendment, not jurisdiction restrictions on federal courts under the Fifth Amendment. While federal law generally expands personal jurisdiction in federal courts to include personal jurisdiction in a state court in that state, Congress has given federal courts broader jurisdiction in some situations. The government urges the Supreme Court to continue to reserve the right to ask whether federal courts have any restrictions on the jurisdiction of state courts.

Arguments of the plaintiffs

Gullett and Bandemer offer a "simple" test: "If a defendant intentionally cultivates a particular state as a market for a product, he can be sued in that state for injuries caused by that product in that state." This test would Establish a sufficient relationship between their injuries and Ford's behavior – the automaker sells the same product in the state, even if not the specific entities involved in the lawsuit. That test would give a fair indication – Ford would know that it could be sued in one state for injuries caused by a product it sells in that state. And it would promote the interest of states in protecting their citizens from corporations that have established a lasting relationship with the people of the state and thus made a commitment not to harm these people.

Plaintiffs identify a number of flaws in Ford's test for the immediate cause that would "radically change the jurisdiction landscape." Ford, they claim, misinterprets language "arising from or relating to language". This, as Ford argues, is not an example of Legalese repeating two synonymous sentences to capture a concept. Rather, the terms are disjunctive – "arise from" and "relate to" are alternative concepts with different meanings – and not a conjunctive repetition of the same idea. While “arising from” means causality, “relate to” indicates something further.

Car accidents provide a common ground for litigation in which injured parties seek compensation from manufacturers of cars, tires and parts. Ford's causal test would result in claims from the state in which plaintiffs were injured (and often reside) being passed on to another forum, such as the state where the manufacturer made the first sale (North Dakota in Bandemer, Washington or Oregon in Montana) Eighth Judicial District). But these states would not be more convenient for Ford, while they would be far more onerous for the plaintiffs. Alternatively, it would shuffle cases to Ford's Michigan home. In both cases, the "only advantage for Ford is an inadmissible one: the possibility that the process load is so high that many plaintiffs give up their claims".

Amicus briefs

In addition to the involvement of the federal government, the case has attracted the interest of a wide range of amici, many of whom take unexpected positions. A cross section of states, some controlled by Republicans and some controlled by Democrats, filed a pleading in support of Gullett and Bandemer, calling on judges to accept a comprehensive concept of state sovereignty that allows their courts to reach defendants who cause harm within their limits. The National Association of Home Builders also supports plaintiffs on the grounds that preventing the out-of-state manufacturer from having jurisdiction would concentrate liability on a potentially innocent intermediary in the state, forcing that intermediary to have duplicate litigation outside of the state . It provides the example of a domestic construction company having a third party claim, likely outside of the state, against a liable outside of state supplier (such as a Chinese drywall manufacturer) because the supplier is not subject to the jurisdiction where the plaintiff was injured.

Posted in Ford Motor Company v Montana Eighth Judicial District Court, Ford Motor Company v Bandemer, Featured, Merits Cases

Recommended citation:
Howard M. Wasserman,
Case preview: defining "kinship" in personal responsibility,
SCOTUSblog (October 6, 2020, 11:20 a.m.),
https://www.scotusblog.com/2020/10/case-preview-defining-relatedness-in-personal-jurisdiction/