Swimming Against the Current Towards a Rational Doctrine of Personal Jurisdiction: Surveying the Aftermath of Ford v. Montana

Kayahan Cantekin

 

I. Background

The concurring opinions of Justices Alito and Gorsuch in Ford v. Montana Eighth Jud. Dist. Ct.[1] both raised concerns that the majority opinion’s treatment of the “arise out of or related to” prong of the minimum contacts test as a strictly disjunctive proposition unnecessarily risked introducing uncertainty to an already peculiar doctrine.[2] The putative requirement of a causal connection between the contacts in a forum state and the claims was arguably a factor that increased the foreseeability the specific personal jurisdiction doctrine for potential defendants, thus allowing them to manage their business according to the risk tolerance they have for litigation in that state.

 II. Developments

As the majority opinion in Ford has explicitly pointed to the disjunctiveness of the “arise out of or related to” formulation, a “relatedness” test has started to take shape in the treatment of courts.[3] For one thing, it is not clear how compatible this development is with the conceptual framework that the Supreme Court’s late proceduralist Justice Ginsburg tried to introduce to U.S. law of personal jurisdiction to rationalize it. On the one hand, the new test generally fits into the narrow general personal jurisdiction/broad specific jurisdiction structure that Ginsburg’s opinion in Goodyear[4] (and dissent in McIntyre[5])appeared to herald. However, by blurring the apparent reach of specific jurisdiction, Ford appears to risk the rational and foreseeable specific personal jurisdiction that, for example, the EU’s Brussel Regulation[6] provides for by explicitly listing bases for jurisdiction. Ginsburg, arguably, appeared to prefer the EU rule, at least in the context of torts (see Ginsburg’s dissent in McIntyre, citing the Brussels Regulation).[7]

Ford’s mixed signals on nature of the “relation” between the claim and the contact appears to cause multifarious approaches on part of lower courts. For example, in product liability cases, while some courts find such a “relation” under Ford where the defendants “systematically served a market … for the very [product]”[8] in question (although not necessarily particular product that caused harm), some courts appear to understand Ford as allowing a finding of relatedness where the defendant’s systematic contacts in the forum state is generally related to the commercial activity of which the marketing of the product is only a part. The latter approach, in its extreme, risks blurring the clear distinction between specific and general jurisdiction and evolving into a quasi-general personal jurisdiction.

For example, in Tieszen v. Ebay, Inc.[9] the plaintiff was injured by the combustion of a lithium-ion battery he used in his e-cigarette manufactured out-of-state by LG Chem, a Korean company. The plaintiff bought the batteries on Ebay from a third-party vendor. LG Chem denied having sold the batteries as removable consumer batteries or having authorized any reseller to sell them for such purpose: the batteries were marketed and sold in the South Dakota market to “sophisticated, industrial customers.” LG Chem thus argued that there was no relation between its contacts in South Dakota and the claims of the plaintiff. The court denied LG Chem’s motion to dismiss for lack of personal jurisdiction. However, the court found that under Ford, the facts that (1) LG Chem sold the same type of batteries in South Dakota, (2) the plaintiff bought the battery in South Dakota, (3) the plaintiff was a South Dakota resident, and (4) was injured in South Dakota, constituted a sufficient showing of relatedness. Significantly, the court thought that LG Chem’s argument would be relevant to the liability issue but not personal jurisdiction. However, it is not clear whether relation between the harm and the contacts could be established pre-Ford.

An interesting development to follow is Ford’s effect of lowering the standard of showing required for jurisdictional discovery in cases where specific jurisdiction is invoked. For instance, in Rickman v. BMW of North America LLC, [10] a putative class of plaintiffs argued that the District Court for the District of New Jersey had specific personal jurisdiction over BMW AG, the German parent company of BMW of North America (BMW NA). The plaintiffs claimed that BMW AG, among other defendants, has misrepresented the emissions of vehicles marketed in the United States and was liable under consumer protection and fraud laws. The misrepresentations mainly consisted of commercial messaging put out by BMW NA. The plaintiffs were not able to show a particular communication between BMW AG and BMW NA that implicated BWM AG in the alleged misrepresentation. Nevertheless, the court denied BMW AG’s motion to dismiss for lack of personal jurisdiction, finding that since a causal relationship was not necessary under Ford’s new relatedness criterion, the plaintiff’s claim that marketing concepts used by BMW NA were generally developed by BMW AG satisfied the necessary plausibility threshold for continuing onto jurisdictional discovery. Arguably, under a causality test, the court would find for BMW AG as the plaintiff’s jurisdictional theory would not have the requisite plausibility: That would require convincing the court that there plausibly existed particular communications between BMW AG and BMW NA from which the alleged misrepresentation “arose out of.” However, under Ford, all the plaintiff needed was a showing that BMW AG directed the marketing effort of BMW NA to a significant extent, and that the alleged misrepresentation was, logically, “related to” this effort.

III. Conclusion

While it is still too early to say for certain, the developments appear to point to a more nebulous specific personal jurisdiction doctrine taking hold. One possible corrective to the over-inclusiveness that potentially may stem from Ford could be taming the “arise out of or related prong” of the minimum contact test with the “reasonableness” prong that remains untouched by Ford. While this will provide a tool for courts to avoid exorbitant jurisdiction, it does not completely fix the foreseeability problem. Another corrective is, like some courts have done, declining to extend Ford to cases where the harm has occurred outside of the forum state and to non-residents of the forum state, no matter how related the harm is to the in-state conduct.[11]

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[1] 141 S. Ct. 1017 (2021).

[2] Id. at 1033 (Alito, J., concurring in judgment); id at 1035-36 (Gorsuch, J., concurring in judgment).

[3] District courts in the Third, Nineth, and Eleventh Circuits have cited Ford to disregard circuit precedent requiring but-for causality and to apply a relatedness test instead. See Rickman v. BMW of N. Am. LLC, 2021 WL 1904740 (D.N.J. May 11, 2021); James Lee Constr., Inc. v. Gov't Emps. Ins. Co., No., 2021 WL 1139876 (D. Mont. Mar. 25, 2021); Israel v. Alfa Laval, Inc., 2021 WL 1662770 (M.D. Fla. Apr. 28, 2021); but see Beemac, Inc. v. Republic Steel, 2021 WL 2018681 (W.D. Pa. May 20, 2021)(Applying the Third Circuit's causation-focused test “because the Supreme Court did not expressly or impliedly overrule that test”). Some state courts are also abrogating their but-for causality tests that were established prior to Ford. E.g. see Cox v. HP Inc., 368 Or. 477, 492 P.3d 1245 (2021).

[4] Goodyear Dunlop Tires Operations, S.A. v. Brown, 564 U.S. 915 (2011).

[5] J. McIntyre Mach., Ltd. v. Nicastro, 564 U.S. 873 (2011).

[6] Regulation (EU) 1215/2012, 2012 O.J. (L 351) 1-32.

[7] 564 U.S. at 909, f.n. 16 (Ginsburg, J, dissenting). Ginsburg cited the older Regulation (EC) 44/2001, which was replaced by Regulation (EU) 1215/2012.

[8] 141 S. Ct. at 1028.

[9] 2021 WL 4134352 (D.S.D. Sept. 10, 2021).

[10] 2021 WL 1904740 (D.N.J. May 11, 2021). For a similar treatment, also see Lewis v. Mercedes-Benz USA, LLC, 2021 WL 1216897 (S.D. Fla. Mar. 30, 2021.

[11] See e.g. Choi v. Gen. Motors LLC, 2021 WL 4133735 (C.D. Cal. Sept. 9, 2021).