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Ford Faces Stiff Headwinds at High Court Jurisdiction Clash (2)

Oct. 7, 2020, 5:29 PMUpdated: Oct. 7, 2020, 7:46 PM

Ford Motor Co.'s effort to limit a state’s jurisdiction over it in cases where a car was sold in another state met skepticism from members of the U.S. Supreme Court at oral argument Wednesday.

Several justices sought to go back to the underlying meaning of due process and questioned why an injured person shouldn’t be able to sue Ford in various hypothetical scenarios. Chief Justice John G. Roberts Jr. and others kept returning to the question of Ford’s advertising and other activities in all 50 states.

“You wouldn’t be in the car if you weren’t persuaded to buy it,” Roberts said.

The court is in the process of weighing decisions from Minnesota and Montana state courts allowing personal injury and wrongful death suits over cars sold out of state.

Ford argues courts in those states shouldn’t be able to exercise specific personal jurisdiction over the company, because the connections between Ford’s activities there and the plaintiffs’ claims aren’t close enough to satisfy due process. There should be a “causal link” between a defendant’s activities and the alleged harm, it says.

Sean Marotta of Hogan Lovells, Ford’s attorney, relied particularly on two relatively recent Supreme Court cases. One of them, Bristol-Myers Squibb Co. v. Super. Ct., disallowed nonresident plaintiffs from suing drugmaker Bristol-Myers in California, which they sought to do on the basis of its extensive activities there. And in Walden v. Fiore, the court said the focus should be on the defendant’s connection to the state where the suit took place, not the plaintiff’s.

But Bristol-Myers has “at least three differences from this case,” and the nonresident plaintiffs there had “absolutely no connection” to California, the forum state, Justice Elena Kagan said in a question to Marotta. When he cited Walden, she said the plaintiffs in that case had no connection to the forum state either.

Here, the plaintiffs sued where the auto accidents occurred.

Justice Neil M. Gorsuch said the case “puts into sharp relief the difficulties our doctrinal tests have created.” Going back to “first principles,” what does due process require? he asked.

Marotta said, “What distinguishes general from specific jurisdiction? Specific jurisdiction is, you go into a state and you perform certain acts. You are then liable for claims that arise out of those acts.”

“But here,” he said, “the forum states are seeking to hold Ford liable for acts of manufacture and of design and of sale that occurred in other states.”

Also looking into first principles, Justice Stephen G. Breyer asked what would be unfair about suing Ford in Montana or Minnesota “if caselaw doesn’t govern.”

And Justice Samuel A. Alito invited Deepak Gupta of Gupta Wessler, who argued for the plaintiffs, to think beyond precedent as well. A foundational case from 1945 was “antiquated,” Alito said.

Some of the justices sought to flesh out what Ford was asking them to do. Justice Clarence Thomas asked, if he was in Tennessee and bought a used car from Virginia that then failed in Tennessee, whether he could sue in Tennessee. Kagan asked whether Ford’s test would effectively limit specific jurisdiction to the state where a product’s first sale occurred.

Gupta faced probing questions as well. Thomas said he wasn’t clear on “how related” a defendant’s activities must be to a plaintiff’s claims.

Gorsuch asked what the “limiting principle” might be to avoid blurring specific and general jurisdiction, which is associated with a defendant’s “home” state.

Gupta said the plaintiffs’ proposed test for relatedness doesn’t blur the line, but promotes clarity. Ford’s test, by contrast, would turn on the sales history of a used product, he said.

“I guess I agree,” Gorsuch said.

Gupta closed by saying that due process depends on principles of “interstate federalism, fairness, and common sense.” Ford’s proposed test “flunks all three,” he said.

But Marotta said that the plaintiffs’ view raises questions that would “trouble the lower courts for years.”

The case is Ford Motor Co. v. Mont. Eighth Judicial Dist. Ct., U.S., No. 19-368, oral argument 10/7/20.

(Updated throughout with reporting on oral argument.)

To contact the reporter on this story: Martina Barash in Washington at mbarash@bloomberglaw.com

To contact the editors responsible for this story: Rob Tricchinelli at rtricchinelli@bloomberglaw.com; Peggy Aulino at maulino@bloomberglaw.com

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