Wednesday, September 30, 2020

Case-Linked Jurisdiction and the Ford Cases (Guest Post by Howard M. Erichson, John C. P. Goldberg & Benjamin C. Zipursky)

Howie Erichson, John Goldberg, and Ben Zipursky present the following guest post on the much-anticipated Ford cases that will be argued next week:

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On October 7, an eight-member Supreme Court will hop on the phone and hear oral argument in a pair of cases carried over from last term: Ford Motor Company v. Montana Eighth Judicial District Court and Ford Motor Company v. Bandemer. Because these cases focus on personal jurisdiction, Justice Ginsburg will be especially missed. A former civil procedure professor, Justice Ginsburg was the most important voice on the Court in this area of the law. Here, as elsewhere, she occupied positions of principle that cut across political divides.

The Court will need wisdom for these cases because they present a surprisingly difficult legal problem whose resolution could have a significant impact on future civil litigation. Suits were brought on behalf of a Montana resident and a Minnesota resident involved in car accidents in their respective home states. The Montana resident was killed and the Minnesotan suffered a severe brain injury. In both cases, the injury was allegedly caused by a product malfunction in the Ford vehicle in which they rode: a Ford Explorer with rollover problems in the Montana case and a Ford Crown Victoria with defective airbags in Minnesota. Ford has argued that, because the Explorer was first sold by a Ford dealer in Washington State, rather than Montana, the Montana courts have no personal jurisdiction over it. Similarly, it has argued that because the Crown Victoria was first sold by a Ford dealer in North Dakota, rather than Minnesota, the Minnesota courts have no personal jurisdiction over it. The high courts of Montana and Minnesota rejected Ford’s arguments, but Ford successfully petitioned the U.S. Supreme Court to hear both cases. Due to COVID-19, the oral argument originally scheduled in May of 2020 was pushed over until the Term that is about to begin.

Lawyers educated before 2011 might find Ford’s argument surprising. After all, Ford has massive contacts in both states, and both have a strong interest in providing redress for residents who were injured by products that malfunctioned and caused injury within their borders. There is not a whiff of forum-shopping. However – as Ford’s lawyers have shown in their briefs – cases the Court has decided since 2011 can be arranged to make its position look like a logical application of the Court’s precedents. Goodyear and Daimler rule out general jurisdiction over Ford in these states; Nicastro makes it clear that even if a claim involves an in-state injury, a court must scrutinize a defendant’s contacts with the forum state for specific jurisdiction; and Bristol-Myers Squibb (“BMS”) establishes that, even if a defendant has substantial contacts with the forum state, a court must scrutinize the link to each plaintiff’s claim for specific jurisdiction. A majority of the Justices – including Justice Ginsburg – in recent years have required more (than in the past) to establish personal jurisdiction over corporate defendants. In particular, Justice Alito’s majority opinion in BMS reasoned that, notwithstanding the defendant’s five offices and millions of dollars of sales in California, that state’s courts lacked personal jurisdiction over the company for products liability claims by non-Californians whose claims arose elsewhere. Only Justice Sotomayor dissented.

Ford has offered the Court an aggressive but superficially plausible reading of BMS and other Court decisions, one that meshes with decisions of some lower courts around the country. On this view, a state court has specific personal jurisdiction only if the defendant’s purposeful contacts with the forum state were a “proximate cause” of the incidents. Ford argues that the cases should be dismissed for lack of personal jurisdiction because none of its sales in Montana or Minnesota were a proximate cause of the plaintiffs’ injuries.

Upon closer scrutiny, it is clear to us that Ford’s “proximate cause” argument fails. This is not principally because we think a Court that purports to be fastidious about legal language should not embrace an argument that reads the crucial phrase “arises out of or relates to” by blotting out the “or relates to” part. Nor is it mainly because an automobile company’s franchisees’ sales within a state are only one relevant form of purposeful availment: advertisement and marketing are at least as important, especially to products liability claims.  While we are struck by the audacity of Ford’s implicit identification of Washington and North Dakota (where the cars in question were first sold) as the right places for these suits to proceed – when in fact those states have legislatively amended their tort law so that automobile dealers cannot be sued in strict products liability – that is not primarily what leads us to reject its position on personal jurisdiction, either. And it is not even the preposterousness of Ford proposing that the notoriously elusive concept of “proximate cause,” a perennial source of confusion in tort law, will provide clarity to the law of personal jurisdiction.

Our more fundamental problem is that we take seriously what was said by Justice Alito, Justice Ginsburg, and the other members of the eight-judge BMS majority. Why did the Court conclude that, in face of massive contacts with the forum state, there was no specific jurisdiction over Bristol-Myers Squibb in California for claims by non-Californians that did not arise in California? Because, according to the Justices, it matters whether a state, by adjudicating a particular claim, is being a “busybody.”  In the Court’s view, California was meddling in other states’ business without sufficient reason. This is what Justice Alito called a problem of “interstate federalism” and the limits of state sovereignty. A defendant’s having contacts with the forum state is not enough for due process in the context of case-linked jurisdiction; a defendant has a due process right to be free of the adjudicative authority of a state’s courts when a case against it is really none of the state’s business. We explain this principle more fully in our forthcoming essay “Case-Linked Jurisdiction and Busybody States.” 

Recognition that BMS turned on an anti-busybody principle helps to explain why Ford’s argument against jurisdiction fails. Montana and Minnesota are not being busybodies in these cases, because the plaintiffs are in-state residents who were injured by accidents that occurred in their home states.

Of course, the Court’s precedents reveal that being injured by a product in a state is not enough, standing on its own, to establish specific personal jurisdiction. We knew this already from World-Wide Volkswagen, and Nicastro reinforced this basic point notwithstanding the fractured Court. A company needs to have purposefully availed itself of the state and in that way implicitly “submitted to a state’s authority.” Moreover, the case in question needs to be within the scope of that defendant’s implicit submission to the state’s authority. But these aspects of due process analysis are also readily met in the Ford cases. By marketing and selling its vehicles in Montana and Minnesota, Ford submitted to those states’ adjudicative authority for injury victims’ efforts to hold the manufacturer accountable for injuries caused by its vehicles. The Ford cases differ from Nicastro (and World-Wide Volkswagen) because of Ford’s purposeful contacts with the forum states on matters directly related to the claims against it, and they differ from BMS because of the forum states’ legitimate interest in adjudicating these plaintiffs’ claims.  

Ford is right that specific personal jurisdiction is a tough nut to crack – that “case-linked jurisdiction” needs a better account of case-linkage than has yet been provided – but Ford is wrong that notions of causation will help to crack it.  The key is to be honest about the fact that there are two kinds of concerns at play in this area of the law: a concern about the limits of state sovereignty, and a concern about the scope of a defendant’s submission to state authority. Both concerns are clearly satisfied in the cases now before the Court, which is why the Justices, if they adhere to their own precedents, should reject Ford’s challenges to the decisions below. The Ford cases hand the Court a perfect opportunity to clarify the concept of case-linkage for personal jurisdiction; we hope that, even without the benefit of Justice Ginsburg’s voice, it will use the opportunity wisely.

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