Is a nonresident defendant subject to specific personal jurisdiction in state court where the plaintiff’s claim is not causally related to the defendant’s in-state contacts?
This case asks the U.S. Supreme Court to reconsider the extent to which a defendant’s contacts with a forum state must be related to the claim at issue in order to establish specific jurisdiction over the defendant. Petitioner Ford argues that there must be a causal relationship between the defendant’s in-state contacts and the plaintiff’s injury because the court in Bristol-Meyers Squibb Co. v. Superior Court of California disregarded the existence of similar causal relationships between the defendant’s in-state contacts and the injuries of third parties. Respondent Charles Lucero counters that a causal connection is not necessary to support specific jurisdiction in cases such as this where the defendant has marketed its products in the forum state and a person suffers an injury from one of those products within that state. The outcome of this case will clarify where manufacturers may expect to be subject to suit and will impact litigants’ ability to engage in forum shopping.
Questions as Framed for the Court by the Parties
Whether the “arise out of or relate to” requirement for a state court to exercise specific personal jurisdiction over a nonresident defendant under Burger King Corp. v. Rudzewicz is met when none of the defendant’s forum contacts caused the plaintiff’s claims, such that the plaintiff’s claims would be the same even if the defendant had no forum contacts.
In 2015, Montana resident Markkaya Jean Gullett (“Gullett”) was driving her 1996 Ford Explorer (the “Explorer”) on a Montana interstate when one of the vehicle’s tires had a tread/belt separation, causing the vehicle to fall into a ditch upside down. Ford Motor Co. v. Mont. Eighth Judicial Dist. Court at 482–83. Gullett died from this accident, and her personal representative Charles Lucero (“Lucero”) filed a lawsuit against Ford Motor Co. (“Ford”) in a Montana state district court on Gullett’s behalf, claiming strict liability for design defect, strict liability for failure to warn, and negligence. Id. at 483. Ford moved to dismiss the lawsuit, arguing that it was not subject to specific personal jurisdiction in Montana because its Montana “contacts” are not related to the lawsuit’s claims. Id. Ford designed and manufactured the Explorer outside of Montana, assembled it in Kentucky, and originally sold it in Washington. Id. at 482. The Explorer was not resold and registered in Montana until more than 10 years later. Id. at 482–83. The district court denied the motion to dismiss and Ford appealed to the Supreme Court of Montana. Id. at 483.
On appeal, the court explained that for Montana to exercise specific personal jurisdiction over Ford, there must be a substantial connection between Ford’s “suit-related conduct” and the state of Montana. Id. at 484. To assess whether such a connection existed, the court conducted a two-step inquiry: first, it determined whether specific personal jurisdiction existed under Montana’s long-arm statute, and second, it determined whether exercising such personal jurisdiction was constitutional. Id. at 484–85. The court answered the first question in the affirmative, finding that Montana’s long-arm statute permits personal jurisdiction over defendants who commit any action “resulting in accrual within Montana of a tort action.” Id. at 485. That standard was met here, the court reasoned, because Ford’s alleged wrongdoing resulted in a car accident in Montana. Id.
Turning to the second question, the court explained that the Due Process Clause of the Fourteenth Amendment requires that the defendant have “certain minimum contacts” with the forum state. Id. at 485–86. The court considered three factors in that regard: (1) whether Ford “purposefully availed” itself of the privileges and benefits of Montana, (2) whether Lucero’s claims “arise out of or relate to” Ford’s Montana-related activities, and (3) whether exercising personal jurisdiction would be reasonable. Id. at 486. The court found all three factors present here, determining that Ford purposefully availed itself of Montana by placing its products into Montana’s “stream of commerce” and targeting Montana customers via its in-state activities. Id. at 488. According to the court, these activities included advertising to Montana customers, registering to do business in Montana, operating thirty-six dealerships, selling cars and parts, and providing repair services. Id.
The court then found that Lucero’s claims were sufficiently related to Ford’s Montana-related activities. Id. at 489–90. Although the court conceded that Ford’s activities within Montana did not directly result in Gullett’s use of the Explorer in Montana and the ensuing accident, the court explained that due process does not require such a direct connection. Id. at 490. The court reasoned that Ford’s manufacture and sale of vehicles designed for interstate travel made it foreseeable that its vehicles would be used in Montana. Id. at 491. The court determined that this sufficiently connected Ford to Montana when considering the complementary nature of Ford’s in-state activities, such as vehicle sales and repair. Id. Finally, the court stated that Ford failed to demonstrate that exercising personal jurisdiction would be unreasonable here, and thereby concluded that due process was satisfied. Id. at 493–94.
The court accordingly affirmed the state district court’s denial of Ford’s motion to dismiss. Id. at 494. The Supreme Court of the United States granted certiorari on January 17, 2020. Orders and Proceedings, 19-369.
DOES SPECIFIC JURISDICTION REQUIRE A CAUSAL CONNECTION?
Petitioner Ford argues that specific jurisdiction requires that it have “suit-related” contacts with Montana. Brief for Petitioner, Ford Motor Co. at 18. In other words, Ford continues, its activities within Montana must “give rise to” or somehow cause the claim at issue; a plaintiff’s “unilateral” activities within Montana cannot alone support such a causal connection. Id. at 18–19. For example, Ford explains that in World-Wide Volkswagen Corp. v. Woodson, the Court held that plaintiffs who bought a car in New York and got into an accident in Oklahoma could not assert specific jurisdiction in Oklahoma over the out-of-state manufacturer. Id. Ford argues that Gullett’s unilateral decision to drive within Montana should similarly fail to justify specific jurisdiction here. Id. Ford also points out that the Court has previously rejected claims of specific jurisdiction asserted on the basis that individuals in the forum state can bring similar claims that are causally related to the defendant's conduct. Id. Ford draws attention to Bristol-Myers Squibb Co. v. Superior Court of California, San Francisco County, where the Court rejected a California state court's assertion of specific jurisdiction over nonresident claimants who could not trace their claims to the defendant’s activities in that state, despite that the nonresident plaintiffs were seeking to join a class action by California-resident plaintiffs who could in fact do so. Id. at 19–20, 31–32. In other words, Ford concludes, the mere “resembl[ance]” between a plaintiff's claim against the defendant and the defendant’s in-state relationship with third parties fails to justify specific jurisdiction. Id. at 31.
Ford argues that fairness requires that a defendant be subject to suit only in those forums where the defendant itself creates forum contacts and those contacts are “suit-related.” Id. at 23. While recognizing that the Court often uses the phrase “arise out of or relate to” to describe this relatedness, Ford contends that “relate to” should not be read to excuse the lack of a causal connection. Id. at 36–37. According to Ford, the Court merely uses “relate to” as another way to describe a causal connection. Id. Ford asserts that the Court often uses redundant phrasing when describing a single concept, such as the requirement that the exercise of specific jurisdiction must comport with “fair play and substantial justice.” Id. at 37. Ford also points out that the Court has often omitted the phrase “relate to” in its opinions, indicating that “relate to” is superfluous legalese. Id at 36–37. Indeed, Ford continues, the Court has expressly cautioned against reading the phrase “arise out of or relate to” as encompassing two separate standards. Id. at 37.
Respondent Lucero counters that a causal relationship between a plaintiff’s claim and a defendant’s in-state contacts is not required to support specific jurisdiction. Brief for Respondent, Charles Lucero at 13–14. Lucero notes that in Bristol-Myers Squibb, the Court itself declined an invitation to adopt causal language and instead opted for looser terms such as “connection” and “affiliation” to describe the relatedness required between the claim and the defendant’s contacts in the forum state. Id. at 26. Lucero argues that this relatedness is present where, as here, a defendant “deliberately cultivate[s] a market” for a product in a particular state and one of those products causes an injury in that state. Id. at 16. It does not matter, Lucero maintains, that the particular product that caused the injury was not sold in the forum state; if the defendant “routinely sells” the injury-causing product in the forum state, then the claim may be said to “arise out of or relate to” the defendant’s in-state contacts. Id. at 17–18. Lucero accordingly asserts that specific jurisdiction exists here because (a) Ford cultivated a market for the Explorer in Montana, and (b) an Explorer injured Gullet in Montana––where Gullet bought the Explorer is irrelevant. See id. at 16. Further, Lucero points out, even the United States, as amicus curiae in support of Ford, while otherwise agreeing that Ford’s contacts insufficiently relate to Lucero’s claim, does not go so far as to read the Court’s precedents as requiring a causal link. Id. at 24; see Brief of Amicus Curiae the United States, in support of Petitioner at 29–32.
Lucero insists that the phrase “arise out of or relate to” must be read disjunctively in that “arise out of” and “relate to” have distinct meanings. Id. at 23. While conceding that “arise out of” implies a causal relationship, Lucero asserts that “relate to” carries no such implication. Id. at 23–24. Lucero claims that the Court has regularly employed this or similar disjunctive language for almost 75 years as a way of emphasizing that a causal connection is not required. Id. at 24–25. For example, Lucero notes, the Court has alternatively used the phrases “arise out of or are connected with,” “deriving from, or connected with,” and “related to or arises out of” when describing the relatedness requirement. Id. at 23. Lucero goes on to point out cases where specific jurisdiction existed despite the lack of a causal connection, drawing attention to Goodyear Dunlop Tires Operations v. Brown, where the Court recognized that “the flow of a manufacturer’s products into the forum” establishes a connection sufficient to support specific jurisdiction. Id. It is not necessary, Lucero contends, that a plaintiff be able to trace the particular injury-causing product to a source within the forum state. See id. at 24.
FEDERALISM AND DUE PROCESS CONCERNS
Ford contends that a causal rule best addresses the due process concerns fundamental to specific jurisdiction. Brief for Petitioner at 23. According to Ford, specific jurisdiction serves an important “jurisdiction-allocating function” that underscores the principle of federalism. Brief for Petitioner at 23–24. Ford explains that because states are coequal sovereigns, the Court must clearly demarcate the bounds of their authority in order to prevent a state from interfering with the interests of another state in regulating actions taken within or directed toward its territory. Id. Otherwise, Ford contends, states could use a defendant’s unrelated conduct within its borders as a “hook” to regulate the defendant’s conduct outside of the state. Id. at 25. Ford contends that it is especially important to set clear boundaries for each state’s authority where, as here, the defendant is a corporation with nationwide marketing. Id. Under a non-causal rule, Ford contends, so long as a state can show that a defendant's activities within its borders resemble the defendant’s conduct in another state, the former state could potentially draw the defendant into court for conduct committed anywhere in the country. Id. Ford explains that the result would be a “jurisdictional free for all,” undermining any concern for federalism. Id. Ford thus concludes that requiring a causal relationship between a plaintiff’s claim and the defendant’s in-state activities is the best way to affect a “sensible division of authority” between the states. Id. at 24. In fact, the United States, in support of Ford, contends that most states have disavowed a strong state interest in regulating conduct in cases such as this one. Brief of the United States at 24–25. The United States explains that about forty states, including Montana, have abandoned the choice-of-law rule under which the law of the place of injury applies. Id. The United States points out that Montana’s courts have explicitly noted that the place of a car accident is too arbitrary a basis for a choice of law determination. Id. at 25.
Lucero counters a causal rule would actually work to undercut federalism. Brief for Respondent at 27. According to Lucero, a state has a strong interest in protecting persons injured within its borders by providing them with a “convenient forum” in which to seek relief. Id. Lucero concedes that while there are circumstances in which another state might have a greater interest in regulating a defendant’s particular conduct, those circumstances are not present here. Id. at 29. Indeed, Lucero argues, the circumstances here especially support Montana having jurisdiction over Ford. Id. at 20. Lucero asserts that because the fatal crash here took place within Montana's borders, Montana has a compelling interest in adjudicating the dispute. Id. at 29. Furthermore, as Lucero explains, Ford “cultivated” not only a first-sale market in Montana, but also a market for replacement parts and for servicing used vehicles. Id. at 20. Lucero moreover notes that Ford’s market relating to used vehicles is an essential complement to its first-sale business, helping it to recoup costs in the latter market. Id. Through its deliberate cultivation of the used vehicle market, Lucero argues, Ford established a “continuing relationship” with anyone driving one of its vehicles in Montana, and thereby obligated itself not to negligently injure any person in Montana with whom it was in that relationship, regardless of where the person may have brought the vehicle. Id. at 20–21. This obligation, Lucero contends, links the claims here to Ford’s contacts in Montana in a manner that justifies specific personal jurisdiction. See id. at 20. Ford’s causal rule, which would permit jurisdiction in the state of the “first sale,” Lucero contends, produces arbitrary results in cases such as this one involving used vehicles purchased from a third party. Id. at 30. Applying Ford's causal rule, Lucero argues, would thus undermine Montana’s ability to enforce its own laws. Id. at 28.
EFFECT ON BUSINESSES AND CONSUMERS
The Products Liability Advisory Council, Inc. (“PLAC”), in support of Ford, argues that requiring a causal relationship to establish specific jurisdiction saves money for businesses and consumers. Brief of Amicus Curiae Products Liability Advisory Council, Inc. (“PLAC”), in Support of Petitioner at 19. According to the PLAC, a business’s litigation costs are typically passed on to consumers through higher prices for products or services. Id. The PLAC asserts that a broad rule requiring only that contacts be “related to” the forum and the litigation will increase businesses’ exposure to expensive litigation, particularly in “high-liability” states that are known for large damage awards. Id. at 20. The result, the PLAC continues, is that businesses will pass on their increased litigation costs to all consumers, not only to those in high-liability states but even to those in low-liability states who typically benefit from lower prices. Id. The PLAC contends that when companies can reasonably predict where their exposure to litigation lies and set prices accordingly, companies are able to reduce costs for consumers in low-liability states. Id. at 20-21. In addition, the PLAC explains, a more predictable rule would allow businesses to structure their affairs to minimize their activities in high-liability states, thereby reducing litigation costs. Id. at 20. According to the PLAC, those savings can in turn be passed onto consumers in the form of lower prices or reinvested into the development of new and improved products. Id.
The Main Street Alliance (“Main Street”), in support of Lucero, counters that a causal rule would operate to shield manufacturers like Ford from liability. See Brief of Amicus Curiae Main Street Alliance, in Support of Respondent at 9. Main Street explains that if manufacturers cannot be sued in certain states, then a party injured from a defective product would be forced to seek redress from a retailer or distributor who merely sold them the defective product. Id. Main Street argues that retailers and distributors would thus be “left holding the bag” with little practical ability to shift liability to the culpable manufacturer. Id. at 9–10. In turn, Main Street maintains, retailers and distributors would likely react by purchasing more liability insurance and passing this additional cost to consumers, or by seeking contractual indemnification from out-of-state manufacturers. Id. at 10. Main Street cautions, however, that these responses are out of reach for the small businesses that “form the backbone” of the economy. Id. at 10, 13. Main Street asserts that small businesses can rarely afford to defend against product liability lawsuits or seek indemnification from the responsible manufacturer after the fact. See id. at 13–14. A causal requirement for specific jurisdiction, Main Street concludes, would prove detrimental to small businesses who would become the main targets of lawsuits for defective products. Id. at 14. And because small businesses are so vital to the financial health of their communities, Main Street continues, local economies would suffer greatly. Id. at 12–15.
POTENTIAL FOR FORUM SHOPPING
The Washington Legal Foundation (“WLF”), in support of Ford, cautions against creating jurisdictional rules that increase the potential for forum shopping, which can occur whenever a party can choose from among several forums that apply different laws. See Brief of Amicus Curiae Washington Legal Foundation, in Support of Petitioner at 17. Creating a clear rule that predicates specific personal jurisdiction on a causal connection, the WLF contends, would foster predictability by narrowing the number of available forums and thereby minimize the likelihood of forum shopping. Id. at 17–18. The WLF argues that a causal requirement for specific jurisdiction best comports with due process because it helps companies reasonably predict in which forums they might be subject to suit. Id. at 16–17. This predictability, the WLF continues, would also allow companies to make more informed business decisions. Id. at 16. The WLF points out that the judiciary also benefits from clear jurisdiction rules because courts are better able to determine when they have authority to adjudicate a dispute. Id. at 17. The Pharmaceutical Research and Manufacturers of America, also in support of Ford, echoes these concerns, explaining that a more relaxed standard for specific jurisdiction encourages product liability claimants to funnel their lawsuits into whatever forum is most advantageous. Brief of Amici Curiae the Pharmaceutical Research and Manufacturers of America, in Support of Petitioner at 17.
Professor Jonathan R. Nash (“Nash”), in support of Lucero, de-emphasizes the likelihood of forum shopping. See Brief of Amicus Curiae Professor Jonathan R. Nash, in Support of Respondent at 7–8. Nash points out that defendants choose where to market their products and thus can control where they might be subject to suit whereas plaintiffs cannot control where they are injured. Id. at 8. The Center for Auto Safety (the “Center”) agrees, and warns that a jurisdictional rule that is too relaxed might actually encourage defendants to engage in forum shopping. Brief of Amicus Curiae the Center for Auto Safety, in Support of Respondent at 17. Manufacturers like Ford, the Center argues, could exploit a “causal connection” rule by selectively delivering their products only to the “friendliest forums,” thereby shielding themselves from lawsuits in other forums where their defective products cause harm. Id. In addition, the Civil Procedure Professors (the “Professors”), also in support of Lucero, point out that factors other than the relatedness of a defendant’s forum state contacts influence the jurisdictional determination. Brief of Amici Curiae Civil Procedure Professors, in Support of Respondent at 18. As an example, the Professors note that any exercise of specific jurisdiction must be “reasonable” regardless of whether minimum contacts exist. Id. This overarching reasonableness requirement, the Professors explain, is a backstop against unfair exercises of jurisdiction. Id.
The authors would like to thank Professor Maggie Gardner for her helpful guidance on this case. Professor Gardner contributed to an amicus brief in support of Respondent Lucero.
- Supreme Court Will Address Personal Jurisdiction After States Courts Interpret BMS Decision, National Law Review (Apr. 7, 2020).
- Grant J. Esposito and Brian R. Matsui, Start Your Engines: The U.S. Supreme Court Will Yet Again Review the Constitutional Limits of Personal Jurisdiction in a Pair of Cases Involving Ford Motor Company, Morrison & Foerster (Jan. 21, 2020).
- Martina Barash, Ford Will Get High Court Input on Where It Can Be Sued, Bloomberg Law (Jan. 17, 2020).