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Where Can A Product Manufacturer Be Sued?

Under what circumstances can a product manufacturer be hauled into state court to defend a products liability claim when the injury occurred in that state ? Or, as put by Ford Motor Company in Ford Motor Company v. Montana Eighth Judicial District Court:

Whether the “arise out of or relate to” requirement for a state court to exercise specific personal jurisdiction over a nonresident defendant under Burger King Corp. v. Rudzewicz is met when none of the defendant’s forum contacts caused the plaintiff’s claims, such that the plaintiff’s claims would be the same even if the defendant had no forum contacts.

The United States Supreme Court has accepted Ford Motor Company v. Montana Eighth Judicial District Court for review, consolidating it with the Minnesota case of Ford Motor Corporation vs. Bandemer.

Ford Motor Corporation sought and obtained SCOTUS review in both cases because it does not believe it should have to defend products liability (and certainly other cases) in state courts absent  its narrow definition of the right of the state court to exercise “specific personal jurisdiction” over it as a nonresident defendant

The Burger King Corp. opinion provided that  “[a] forum may assert specific jurisdiction over a nonresident defendant where an alleged injury arises out of or relates to actions by the defendant himself that are purposefully directed toward forum residents, and where jurisdiction would not otherwise offend “fair play and substantial justice.”” Burger King Corp. v. Rudzewicz, 471 U.S. 462, 463 (1985) (emphasis supplied.).   The Court went on to explain that “an individual’s contract with an out-of-state party cannot alone automatically establish sufficient minimum contacts in the other party’s home forum. Instead, the prior negotiations and contemplated future consequences, along with the terms of the contract and the parties’ actual course of dealing, must be evaluated to determine whether a defendant purposefully established minimum contacts within the forum.” Id.  The SCOTUS concluded that ” Rudzewicz (the appellee) established a substantial and continuing relationship with appellant’s Miami headquarters, and received fair notice from the contract documents and the course of dealings that he might be subject to suit in Florida. The District Court found that appellee is an “experienced and sophisticated” businessman who did not act under economic duress or disadvantage imposed by appellant, and appellee has pointed to no other factors that would establish the unconstitutionality of Florida’s assertion of jurisdiction.” Id.

So, in the pending cases, Ford Motor Company insists that “The Due Process Clause permits a state court to exercise specific personal jurisdiction over a nonresident defendant only when the plaintiff’s claims ‘arise out of or relate to’ the defendant’s forum activities” and the claims asserted in Montana and Minnesota (both products liability actions)  do not ‘arise out of or relate to’ the defendant’s forum activities.”  Here is a link to Ford’s Petition for Writ of Certiorari in the Minnesota case.  The Minnesota Supreme Court’s opinion is reported at 931 N.W.2d 744.   The Montana opinions can be found at 444 P.3d 389 and 443 P.3d 407.

Here is how the issue was posed by the plaintiff in the Montana case:

Should the due-process standard for establishing personal jurisdiction incorporate a but-for or proximate causation requirement derived from tort law, such that Ford Motor Company cannot be held to answer in a forum for injuries caused by a product that it advertises and sells in that forum unless the particular individual product that caused the injury can be traced to Ford’s direct contacts with the forum state?

Amicus briefs abound.  Here is a link to the amicus brief filed by the AAJ and Trial Lawyers for Public Justice.   

Here is a brief summary of the argument from that brief:

The rules proposed by Ford and its amici—limiting specific jurisdiction to either the forum where some unarticulated notion of causation lies, the place of design or manufacture, or to the place of first purchase—complicate rather than simplify the inquiry and call into question jurisdiction in circumstances entirely consistent with this Court’s personal jurisdiction precedents. The jurisdictional determinations of the Minnesota and Montana Supreme Courts are correct and in line with the existing jurisprudence and should be affirmed.

Oral argument had been scheduled for April 27, 2020 but have been postponed because of the coronavirus.

The bottom line:  Ford and other manufacturers want to be sued on their home court.  The question is, will the SCOTUS permit them to do so, or will they be required to play across the entire league where they market and sell their products?

 

 

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