Whether a defendant can be sued in the courts of a particular state depends upon the defendant’s presence in the state. If the defendant lives there, or in the case of an entity, has its principal place of business there or is incorporated there, the defendant has availed itself of the state’s jurisdiction and may be sued there. But what if the defendant simply engages in some level of business there? The defendant must have taken some purposeful act by which it availed itself of the privilege of conducting business in the state in order to be subject to suit in the state. The Supreme Court has required that there be some affiliation between the state, the defendant’s activity, and the controversy at hand in the lawsuit. The test recited for this analysis is whether the plaintiff’s claims “arise out of or relate to the defendant’s contacts” with the forum state.
Before last month’s decision in Ford Motor Co. v. Montana Eighth Judicial Dist. Court, No. 19-368, 221 U.S. LEXIS 1610 (Mar. 25, 2021), many courts had described this test as a but-for, causal nexus requirement between the plaintiff’s claims and the defendant’s contacts with the forum state. But in the recent Ford Motor Company opinion, a majority of justices on the U.S. Supreme Court expressed a view of the test that broadens its scope. Writing for herself and four other justices on the court, Justice Kagan wrote that the first half of the standard—arise out of—does indeed ask about causation. However, she wrote that the second half of the standard—relate to—“contemplates that some relationships will support jurisdiction without a causal showing.” She emphasized that the “relate to” standard does impose limits that protect defendant from being hauled into a jurisdiction when there would be no expectation of being sued there.
The facts of the two consolidated cases decided by the opinion in the Ford Motor Company case illustrate how the jurisdiction test now works. Both lawsuits involved auto accidents where a Ford vehicle was being operated. In one case, the plaintiff was driving a Ford Explorer in the state of Montana when the accident occurred. The vehicle had originally been sold in Washington state. It was designed in Michigan and manufactured in Kentucky. Suit was brought against Ford in Montana for design defects, failure to warn, and negligence.
In the other suit, the plaintiff was a passenger in a Crown Victoria when the accident occurred in Minnesota. This vehicle was designed in Michigan, manufactured in Canada, and originally sold in North Dakota. Suit was brought against Ford in Minnesota for design defects, negligence, and breach of warranty.
In each of these suits, if the “arise out of or relate to the defendant’s contacts” test was a but-for, causal analysis, then it is difficult to see how the plaintiffs’ respective claims arise out of or relate to Ford Motor Company’s activities in Montana or Minnesota, given that the design, manufacture, and sale of the vehicles occurred elsewhere. But Ford clearly markets, sells, and services these vehicles all over the country, including Montana and Minnesota. Under Justice Kagan’s expanded view of the “relate to” portion of the test, the plaintiffs’ respective claims can now be said to relate to Ford’s broader activities in Montana and Minnesota, such that Ford may be sued in those states.
Justice Alito concurred in the result, but wrote separately to express his concern that the majority needlessly complicated the analysis by its reinterpretation of “relate to.” He felt that the original “minimum contacts” test espoused in 1945 in International Shoe was sufficiently broad to allow Ford to be sued in Montana and Minnesota.
Justice Gorsuch, joined by Justice Thomas, also concurred in the result, but wrote separately to suggest that the majority was using new words to express old ideas. They suggested that the jurisprudence of personal jurisdiction might need a remake from the top down to bring practical meaning and understanding to it.