On March 25, 2021, the United States Supreme Court rejected Ford Motor Company’s objections to the exercise of personal jurisdiction based on specific jurisdiction. In Ford Motor Co. vs. Montana Eighth Judicial District Court, et al., the Supreme Court heard two cases consolidated for purposes of certiorari involving Ford vehicles. One case was filed in Montana, while the other was filed in Minnesota.
In the Montana case, surviving heirs of a driver who died in an accident while operating a 1996 Ford Explorer in Montana sued Ford under various theories, including negligence and defective design, arising out of allegedly defective tires. The heirs alleged the tread separated from a rear tire on the vehicle, causing loss of control and a collision. The vehicle was designed in Michigan, manufactured in Kentucky, and was originally sold to a different owner/consumer in Washington State.
In the Minnesota case, a plaintiff alleged he suffered a brain injury when his airbag failed to deploy during a collision that occurred while operating a 1994 Crown Victoria in Minnesota. The vehicle was designed in Michigan, manufactured in Canada, and was originally sold to a different owner/consumer in North Dakota.
Ford is a Delaware company with its principal place of business in Michigan. The Court’s opinion notes that both models of the vehicles in the underlying cases have been marketed in each of the two forum states, that Ford services other vehicles of those models in each state, and generally encourages residents of the states to drive Ford vehicles.
In personal jurisdiction disputes, courts generally assess whether two “flavors” of jurisdiction can constitutionally be exercised — those are general jurisdiction and specific jurisdiction. If general jurisdiction over a defendant exists, that defendant may be sued in the forum for any purpose, whether its existence in the forum relates to the claims or not. In essence, this type of jurisdiction is reserved for individuals who are domiciled in the state or, in the case of corporations, if the company was formed in the state or has its principal place of business/headquarters there. While there are exceptional cases where a temporary domicile may be established, this rarely occurs. No party in the recent Ford case argued general jurisdiction existed over Ford in Montana or Minnesota.
Under specific jurisdiction, a defendant can be sued in the forum state if the claims at issue “arise out of or relate to” the defendant’s purposeful contacts with the forum. In this case, Ford argued that specific jurisdiction was lacking because Ford’s contacts with Montana and Minnesota — generally conducting its business there — were not causally connected to the two vehicles involved in the underlying lawsuits.
The Supreme Court rejected Ford’s argument in this regard. In doing so, the Court noted Ford actively marketed both models of cars in each state, provided service to those models for the residents in those states, and generally encouraged the states’ residents to drive Ford vehicles. In the justices’ eyes, these factors “relate to” the claims at issue. The Court’s opinion even notes that perhaps the decedent and plaintiff purchased Ford vehicles because of Ford’s marketing within each state. Thus, Ford’s argument was rejected and all justices but Justice Barrett (who abstained) agreed. Justice Kagan wrote the Court’s opinion with Justices Roberts, Breyer, Sotomayor, and Kavanaugh joining. Justice Alito wrote a concurring opinion and Justice Thomas did as well.
Article by GOT principal attorney, Derek Ruzicka