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Justices Hand Ford a Loss in Case Over Accident Jurisdiction (1)

March 25, 2021, 2:07 PM; Updated: March 25, 2021, 4:53 PM

Montana and Minnesota courts had jurisdiction over Ford Motor Co. in suits stemming from vehicle crashes because its activities in those states were linked closely enough to the claims, even though the cars were sold in different states, the U.S. Supreme Court ruled Thursday.

“When a company like Ford serves a market for a product in a State and that product causes injury in the State to one of its residents, the State’s courts may entertain the resulting suit,” Justice Elena Kagan wrote for the court, which was unanimous as to the result.

Ford has reach as a “global auto company,” and “Ford did substantial business in the State—among other things, advertising, selling, and servicing the model of vehicle the suit claims is defective,” the court said. That gave those states’ courts specific jurisdiction over the claims against the car company.

The cases worried both large product makers, which feared being subject to suit anywhere they advertised or sold any products, and advocates for injured plaintiffs, who were concerned about having to sue in distant states and sue separately against different defendants.

Each lawsuit here alleged a vehicle defect caused an accident. The Montana Supreme Court allowed a suit against Ford concerning an SUV that allegedly caused the death of driver Markkaya Jean Gullett in Montana, and a divided Minnesota Supreme Court permitted Adam Bandemer’s injury claims to proceed.

The cars at the center of the suits were sold in other states, and Ford argued the connections between its activities in those states and the plaintiffs’ claims weren’t close enough to satisfy due process.

No More International Shoe?

Justices Samuel A. Alito Jr. and Neil M. Gorsuch wrote concurring opinions, the latter of which was joined by Justice Clarence Thomas.

Gorsuch’s concurrence cast doubt on the continuing value of long-standing jurisdictional precedent International Shoe Co. v. Washington, which in 1945 established the “minimum contacts” test for whether a state court has jurisdiction over a defendant, especially a company.

“Nearly 80 years removed from International Shoe, it seems corporations continue to receive special jurisdictional protections in the name of the Constitution,” Gorsuch said. “Less clear is why. Maybe, too, International Shoe just doesn’t work quite as
well as it once did.”

Alito sought a result on narrower grounds: “the Court recognizes a new category of cases in which personal jurisdiction is permitted.”

Interest From Third Parties

The parties’ arguments focused on whether the cases “arise out of or relate to” Ford’s activities in the states, which is necessary for courts to exercise specific jurisdiction.

Ford, the plaintiffs, the U.S. Solicitor General’s office, a coalition of states, trade organizations, law professors, and others had proposed a variety of tests for what kinds of ties were sufficient for states to exercise jurisdiction over distant defendants.

Ford’s argument was met with some skepticism from the justices at oral argument Oct. 7. Several justices asked about the constitutional “first principles” underlying a decades-long string of court decisions.

Justice Amy Coney Barrett didn’t participate in the case.

Gupta Wessler PLLC represented the plaintiffs. Hogan Lovells US LLP represented Ford.

The case is Ford Motor Co. v. Mont. Eighth Judicial Dist. Ct., U.S., No. 19-368, 3/25/21.

(Updated with additional reporting throughout.)

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; Nicholas Datlowe at ndatlowe@bloomberglaw.com

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