JOSH SCHULSTER—The Supreme Court’s recent decision in Ford Motor Co. v. Montana Eighth Judicial District Court was one of the most anticipated in recent memory. In assessing whether the plaintiff’s causes of action arose out of or related to Ford’s contacts with the forum states (Montana and Minnesota), the Court’s majority opinion held that Ford’s contacts in those states sufficiently related to plaintiff’s injuries. However, the Court’s decision may pave a road of uncertainty in personal jurisdiction jurisprudence for years to come.
The case was a consolidated action involving two independent car accidents, one of which occurred in Montana, and the other in Minnesota. Markkaya Gullet, the driver of a 1996 Ford Explorer, was killed after her car flipped over in Montana. Adam Bandemer, a passenger in his friend’s 1994 Crown Victoria, suffered serious brain damage after his airbag failed to deploy. The plaintiffs sued Ford in their respective state courts where the injury occurred. Ford moved to dismiss the two suits for lack of personal jurisdiction, on fundamentally indistinguishable grounds. According to Ford, it could not be haled into Montana and Minnesota state courts because the vehicles involved in the accidents were not manufactured, designed, or sold in the state where plaintiffs brought their claims.
Personal jurisdiction refers to the authority and power of a court to render a decision that will bind the parties in a particular case. In determining if a court has personal jurisdiction, courts will focus on the defendant because the plaintiff chooses the forum and thus voluntarily consents to the chosen forum’s exercise of jurisdiction. Personal jurisdiction exists if the defendant has consented to jurisdiction or if the plaintiff can establish that a court has general jurisdiction and/or specific jurisdiction over a defendant.
A court possesses general jurisdiction over a corporate defendant if the defendant’s headquarters or place of incorporation is located within the state. For a court to have specific jurisdiction over a corporate defendant, plaintiff’s claims must be sufficiently related to the defendant’s activities within the state. Rooted in the Fourteenth Amendment’s Due Process Clause, a court’s exercise of personal jurisdiction over a defendant must not offend the norms of “fair play and substantial justice.”
The central issue in the Ford case was whether a causal link is required for a court to have specific jurisdiction. The Court applied the test set out in International Shoe Co. v. Washington and its progeny: (1) the defendant must have sufficient minimum contacts with the forum state, (2) the plaintiff’s cause of action must “arise out of or relate to” the defendant’s contacts with the forum state, and (3) maintenance of the suit must not offend traditional notions of fair play and substantial justice. A defendant’s minimum contacts are measured by the quality and nature of the activity. For example, if the defendant purposefully avails itself of the benefits and privileges of a forum state so as to foresee being haled into court there, then it is fair play to do so.
Before the Ford decision, corporate defendants could avoid plaintiff forum-shopping by showing that the plaintiff’s cause of action lacks a causal connection with the defendant’s contacts in that forum. According to the Ford majority – which included Justices Elena Kagan, Stephen Breyer, Sonia Sotomayor, Brett Kavanaugh, and Chief Justice John Roberts – now a court may find specific jurisdiction over a defendant without a causal connection, even when a defendant’s activities in a particular forum did not cause the plaintiff’s injuries in that forum.
As Justice Gorsuch alludes to in his concurrence (which Justice Thomas joined), the Court’s personal jurisdiction doctrine is likely to crack under immense pressure from rapid transformations to how businesses engage in commerce. When the Court crafted its personal jurisdiction jurisprudence in the 20th century, it likely did not consider the possibility that someday, people and products will be able to travel to any location in the world in just under three hours. So too could it not predict that companies will be able to deliver goods via drones and reach consumers from all corners of the country via augmented reality shopping experiences.
Problematically, the Court’s decision in Ford will only further complicate personal jurisdiction challenges. As Justice Gorsuch writes, the Court’s “affiliation” test makes unclear the threshold level of connection required between a business’s contacts with the forum state and the plaintiff’s injuries. Gorsuch further expressed that because of this confusion, lower courts may apply the test leniently, which could subject corporate defendants – such as e-commerce businesses – to far-away courts.
In the wake of the Ford decision, the jurisdictional lines for corporate defendants will face challenges. Coupled with rapid technological advancement and the advent of e-commerce, the Ford decision will likely not change how multinational conglomerates are treated under personal jurisdiction analysis, especially given the Court’s opinion that Montana and Minnesota state courts could exercise specific jurisdiction over Ford without the adoption of the “affiliation” test. Instead, now new entrants to commerce and small businesses may face increased litigation costs by having to defend themselves in every state across the country.
Maybe it’s time for the Court to abandon its preconceptions regarding traditional notions of fair play and substantial justice. In the modern era, where corporations have global reach and tout their multiple headquarters in the U.S., it can hardly be seen as unfair to haul such defendants into courts across the country. Instead of “adding new layers of confusion to our personal jurisdiction jurisprudence,” the Court should consider reiterating how the personal jurisdiction tests we all learned in our 1L Civil Procedure courses apply to the new age of rapid technological and e-commerce development. More importantly, the Ford decision will likely require the Supreme Court to revisit the causation issue when lower courts begin to struggle with pinpointing where businesses fall on “a spectrum from an individual making an isolated online sale and a company like Ford.”