U.S. Supreme Court Continues Interest in Personal Jurisdiction
The U.S. Supreme Court heard oral arguments October 7 in Ford Motor Company v. Montana Eighth Judicial District, 19-368, involving the permissible constitutional limits of state exercise of long-arm personal jurisdiction over non-resident defendants.
The jurisdiction-related facts are as follows: decedent was a Montana resident; the fatal accident occurred on a Montana highway; however, Ford was headquartered in Michigan, incorporated in Delaware, the vehicle was assembled in Kentucky, sold to a dealership in Washington state, in turn sold as a new vehicle to an Oregon resident and then sold as a used vehicle to another party who brought it to Montana. Thus, the Ford vehicle's presence in Montana was solely due to the acts of third parties over which Ford had no control. While Ford had not caused the subject vehicle to be in Montana, Ford did otherwise avail itself of the benefits and protections of Montana law by conducting business there (e.g. advertising and operating dealerships).
The Supreme Court identified the issue as whether the "arise out of or relate to" requirement of specific jurisdiction is met when none of defendant's forum contacts caused the plaintiff's claims. The issue focuses on whether placing a product in the stream-of-commerce and purposefully availing itself of benefits of the forum state is sufficient to subject a non-resident manufacturer to specific personal jurisdiction when the conduct was unrelated to the specific incident.
The comments and questions from the justices seem directed against the position of Ford Motor Company and in favor of the exercise of specific personal jurisdiction.
Justice Samuel Alito Jr explained: "We're in a strange situation here. We are applying a 1945 standard adopted by the court when it put on its fair play hat as we understood the world in 1945. But the world in 2020 is different."
Some of the justices raised concerns about the narrowness of Ford's jurisdictional approach. They pressed Ford's counsel with hypotheticals about whether a business had sufficient contacts with a state when it advertises its product within the state or on the Internet.
Justice Sonia Sotomayor said to Ford's counsel: "In essence, you are saying Ford can only be liable in its home state and maybe not even there."
We will promptly advise when the opinion is rendered.