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Product Liability Update – December 2021

Ford Motor Co. v. Montana Eighth Judicial District Court

On March 25, 2021, the United States Supreme Court unanimously affirmed the finding of personal jurisdiction over Ford Motor Company in two state court cases involving automobile accidents.  Ford Motor Co. v. Montana Eighth Judicial District Court, 141 S. Ct. 1017 (2021).  In both cases, the Court found personal jurisdiction in state courts for product liability claims by in-state plaintiffs for injuries occurring in-state against an out-of-state defendant that did not design, manufacture, or sell the product in question within the state.  Id. at 1026.  The Court rejected the argument that the Supreme Court’s 2017 Bristol-Myers opinion required a “causal link” between the defendant’s forum contacts and the plaintiffs’ claims to support specific jurisdiction.  The majority held that it is sufficient to find specific jurisdiction if the claims sufficiently “relate to” the defendant’s forum contacts.  This significantly broadens the circumstances in which a manufacturer may find itself subject to specific jurisdiction.

Key Facts

The facts of the two underlying cases were similar.  In the first, the plaintiff was driving her 1996 Ford Explorer in Montana when the tread separated from her rear tire.  She died in the ensuing accident.  In the second, a 1994 Ford Crown Victoria rear ended a snowplow in Minnesota.  A passenger in the car suffered a serious brain injury when the air bag failed to deploy.  Id.  Neither car had been originally sold in the states where the injuries occurred.  However, in both cases, the state courts found personal jurisdiction over Ford.  Ford appealed, arguing that “the state court (whether in Montana or Minnesota) had jurisdiction only if the company’s conduct in the State had given rise to plaintiff’s claims.”  Id.  Because the cars were not designed, manufactured, or sold in the state where the accidents occurred, Ford argued that it was not subject to liability in state courts in those jurisdictions. 

            Ford did not dispute that it purposefully availed itself of the states at issue by conducting business there.  Rather, it argued, based upon the Supreme Court’s decision in Bristol-Myers Squibb Co. v. Superior Court, 137 S. Ct. 1773 (2017), that there needed to be a “causal link” between Ford’s conduct in the state and plaintiffs’ claims.  Because the conduct Ford engaged in the states was not causally related to the injuries, it argued that jurisdiction was improper.  The Supreme Court rejected Ford’s argument 8-0 in three separate opinions (Justice Barrett took no part in consideration or decision of the cases). 

Bristol-Myers Decision

In Bristol-Myers, the United States Supreme Court held that California lacked personal jurisdiction over claims brought by nonresident plaintiffs that did not allege they had obtained the prescription medication Plavix from a California source, that they suffered injury in California, or that they were treated for their alleged injuries in California.  Bristol Myers, 137 S. Ct. at 1781.  This was true even though Bristol-Myers engaged in business activities in California and sold Plavix there.  Id. at 1781, 1783.  However, it did not develop Plavix in California, did not develop its market plan there, or manufacture, label, package, or work on regulatory approval in the state.  Id. at 1778.  In Ford Motor Company, Ford attempted to expand the rationale of Bristol-Myers, extending its logic to in-state plaintiffs that were injured by the products at issue in that state where the suits were brought but whose injuries were not causally connected to Ford’s activities in the state.

The Majority Opinion’s “Relate to” Standard

The majority opinion (delivered by Justice Kagan and joined by Chief Justice Roberts and Justices Breyer, Sotomayor and Kavanaugh) rejected Ford’s argument, holding: “When a company like Ford serves a market for a product in a State and that product causes injury in the State to one of its residents, the State’s courts may entertain the resulting suit.”  Ford Motor Company, 141 S. Ct. at 122.  The majority rejected Ford’s causation-only approach to jurisdiction.  It noted that “our most common formulation of the rule demands that the suit arise out of or relate to the defendant’s contacts with the forum.”  Id. at 1026 (internal quotations and citation omitted) (emphasis original).  The “relate to” standard was met here because “the owners of these cars might never have bought them, and so these suits might never have arisen, except for Ford’s contacts with their home States.”  Id. at 1029.

 The Concurring Opinions’ Questioning of the “Relate to” Standard

While agreeing that personal jurisdiction existed in the case, both Justices Alito and Gorsuch questioned whether the “relate to” standard had meaningful limits.  Justice Alito noted that “traditional notions of fair play and substantial justice”—the standard for assessing personal jurisdiction—were easily met:  “Their residents, while riding in vehicles purchases within their borders, were killed or injured in accidents on their roads.  Can anyone seriously argue that requiring Ford to litigate these cases in Minnesota and Montana would be fundamentally unfair?”  Id. at 1032 (Alito, J. concurring) (emphasis original).  Applying a “relate to” standard to cases “without any indications what those limits might be … [will not be] terribly helpful[]” to lower courts.  Id. at 1033-34 (Alito, J. concurring).  Some “rough causal connection” is required.  Id. at 1034 (Alito, J. concurring).

            Justice Gorsuch was equally skeptical of the “relate to” standard.  He questioned the majority’s direction that it is enough to find an “affiliation” or “relationship” or “connection” to support personal jurisdiction.  While “[t]he majority promises its new test does not mean anything goes, [] that hardly tells us what does.”  Id. at 1035 (Gorsuch, J., concurring) (internal quotations and citation omitted).

            One takeaway is that, although future personal jurisdiction fights will apply the “relates to” standard to in-state conduct, the rules for what must be alleged to meet that this standard, as highlighted by the concurring opinions of Justice Alito and Gorsuch, will need more development.