In a string of rulings over the past decade, the U.S. Supreme Court has made it more difficult to sue corporations that operate nationwide unless suit is brought in the states where they are incorporated or have their principal places of business. But in its March 25, 2021 ruling in Ford Motor Company v. Montana Eighth Judicial District Court, the Supreme Court made clear that it will only go so far to protect corporations from being sued in a plaintiff's preferred forum state. The court held that "[w]hen 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."
The case was actually two cases, both involving Ford cars that were originally sold in one state, but then ended up in other states as a result of "later resales and relocations by consumers." Eventually, the cars were involved in accidents that the victims claimed were the result of design defects. The injured victims sued in the courts of the states where they lived and where the accidents occurred, but Ford claimed that those courts lack "personal jurisdiction" over it. Under the doctrine of personal jurisdiction as developed over decades by the Supreme Court, courts have "general" personal jurisdiction over a corporation if it is incorporated or has its principal place of business in the state, and "specific" personal jurisdiction if the corporation has purposefully availed itself of the privilege of doing business in the state and the lawsuit arises out of or relates to its contacts with the state.
Here, Ford had plenty of contacts with Montana and Minnesota, the states where it was sued: It heavily markets its vehicles there (including the models that were involved in the accidents that gave rise to the cases) and has taken steps to ensure that its vehicles can be serviced and maintained wherever in the United States they end up. But Ford argued that these lawsuits didn't arise out of or relate to its contacts with the forum states because the specific cars involved hadn't been designed, built, or originally sold in those states, even though Ford had sold hundreds of vehicles just like them there. And Ford seemed to have some support for its argument in recent cases that took a limited view of what it means for a case to arise out of or relate to a corporation's contacts with a state.
But the Justices would have none of it: Not a single one bought Ford's argument. The majority opinion, written by Justice Elena Kagan, insisted that Ford's arguments had "no support" in the Court's requirement that a lawsuit have a "connection" to a defendant's activities in the forum state. None of the decisions, the majority stated, even "suggested" Ford's argument that there had to be a causal connection between in-state activities and the lawsuit. Rather, according to the majority, if a corporation "serves a market for a product in the forum State and the product malfunctions there," it can expect to be sued there, and the due process concerns that underlie limitations on personal jurisdiction will be fully satisfied if it is.
One may question (as Justice Gorscuh did in a concurring opinion) Justice Kagan's view that the Court's recent opinions gave Ford no reason to suppose its arguments might prevail. But Ford's lopsided loss makes clear that it (together with the Trump Administration's Justice Department, big business interests, and the defense bar) miscalculated badly in thinking that the Court intended or expected its recent precedents to cut back personal jurisdiction as dramatically as they asked the Court to do in these cases.
As Justice Kagan cautioned, "[t]hat does not mean anything goes." A consumer who lives in Maine and is injured there by a product made by a Delaware corporation with its headquarters in Michigan and its manufacturing facilities in Kentucky probably won't be able to sue in California. But consumers can feel pretty confident that if they are injured by a product marketed nationwide, they can probably sue over it in their home state. As Justice Alito put it in his own concurring opinion, no one can "seriously argue" that there is anything "fundamentally unfair" about that.
