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Supreme Court Unanimously Affirms Specific Personal Jurisdiction Over Automobile Company In Product Liability Suits – Corporate/Commercial Law

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United States:

Supreme Court Unanimously Affirms Specific Personal Jurisdiction Over Automobile Company In Product Liability Suits


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On March 25, 2021, the United States Supreme Court unanimously
affirmed decisions by the Montana and Minnesota Supreme Courts
holding that their lower courts had properly exercised specific
personal jurisdiction over an automobile company in product
liability suits arising from accidents in those states involving
the company’s vehicles, even though those particular vehicles
had not been designed, manufactured, or sold in those
states.  Ford Motor Co. v. Montana Eighth Jud. Dist.
Ct.
, Nos. 19-368, 19-369, 2021 WL 1132515 (U.S. Mar. 25,
2021).  In a consolidated appeal, the company challenged the
State supreme court decisions, arguing that specific personal
jurisdiction is only proper where there is a strict causal
relationship between the defendant’s activities in the forum
state and the plaintiff’s claim.  The Court rejected the
company’s argument, holding that the exercise of personal
jurisdiction in those states was proper under the
circumstances.

The company, incorporated in Delaware and headquartered in
Michigan, manufactures, markets, and sells automobiles throughout
the United States.  It also allegedly encouraged resale
markets for its vehicles, with nearly all its dealerships buying
and selling used cars.  The lawsuits arose from accidents
involving a 1996 model (in the Montana case) and a 1994 model (in
the Minnesota case).  In neither case had the company
designed, manufactured, or sold the vehicle involved in the
accident in the state where the accident occurred and where
plaintiff (a resident of the forum) filed suit.

The company moved to dismiss both suits for lack of personal
jurisdiction.  The company conceded that it had
“purposefully avail[ed] itself of the privilege of conducting
activities” in both states, including selling and marketing
the specific vehicle model involved in the accidents in the states
where those accidents occurred.  The company maintained,
however, that a state court may exercise specific personal
jurisdiction only if the defendant’s conduct in that state
“gave rise” to the plaintiff’s claims and that,
in these particular cases, no such causal link existed because the
company had not designed, manufactured, or sold the specific
vehicles at issue in the states where the accidents occurred. 
Both State Supreme Courts rejected the company’s
argument.

The U.S. Supreme Court also rejected the company’s
argument for a “causation-only approach.”  Rather,
the Court opined, it is sufficient for the exercise of specific
jurisdiction that the suit “arise out of or relate to the
defendant’s contacts with the forum.”  The Court
thus found jurisdiction was proper because the company conceded
that it purposefully availed itself of the privilege of conducting
activities in both states (in the form of marketing, sales of cars
and parts, and repairs) for the same types of vehicles involved in
the accidents; as a result, the company’s conduct and the
subject of the litigation were sufficiently related.  In the
Court’s words:  “[The company] had systematically
served a market in Montana and Minnesota for the very vehicles that
the plaintiffs allege malfunctioned and injured them in those
States.  So there is a strong ‘relationship among the
defendant, the forum, and the litigation’—the
‘essential foundation’ of specific
jurisdiction.”  2021 WL 1132515, at *7
(quoting Helicopteros Nacionales de Colombia, S. A. v.
Hall
, 466 U.S. 408, 414 (1984)).  Accordingly, the Court
held that while other states could also properly have jurisdiction
(such as the states where the cars were sold), this does not
foreclose jurisdiction from being proper in the states where
plaintiffs resided and where the accidents occurred, given the
company’s suit-related activities in those states.

The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.

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