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Tuesday, October 06, 2020

"Relatedness" in personal jurisdiction--Ford and World Wide Volkswagen

SCOTUS on Wednesday hears arguments in Ford v. Montana Eighth Judicial District and Ford v. Bandemer, considering whether there can be specific jurisdiction over a defendant who sells and ships products into the forum state but not the specific unit involved in the events at issue. The Court must decide whether "give rise or relate to" reflects one concept or whether "relate to" is a distinct and broader concept and how much broader. I am covering the case for SCOTUSBlog. Larry Solum offers some thoughts.

This case is the spiritual successor to World Wide Volkswagen, answering questions that were unnecessary 40 years ago and reflecting recent doctrinal shifts. Audi and Volkswagen of America did not challenge personal jurisdiction, recognizing that they were subject to jurisdiction based on the large number of cars that they sold, marketed, serviced, and shipped to the state, although they did not sell or ship the Robinson's car to Oklahoma (they shipped that to NY). Whether this was general "doing business" jurisdiction or some broader conception of specific jurisdiction was unresolved, although it was the topic of academic debate between Mary Twitchell and Lea Brilmayer.

The Court's recent decisions (several authored by Justice Ginsburg) narrowing general jurisdiction to "home" (meaning principal place of business and state of incorporation for corporations) changes the calculus for Ford, which stands in the same position as Audi and VWA. There is no general jurisdiction, because Ford is not incorporated or headquartered in Montana or Minnesota, just as Audi and VWA were not incorporated or headquartered in Oklahoma. So this squarely presents how far (or not far) relatedness extends, including whether it reaches cases in which the defendant has contacts with the forum that are "identical" or "similar to" the out-of-state contacts that caused the accident.

This could be the most significant of the recent wave of P/J cases. If the Court narrows the relatedness standard and finds no specific jurisdiction, it could make it difficult for plaintiffs to sue manufacturers in the locus of the accident, which usually is the plaintiff's home. Instead, often-less-resourced plaintiffs will have to travel to the better-resourced defendant's home (having to sue Ford in Michigan) or to some third state where the defendant did have contacts (such as where Ford manufactured or made first sale of the car at issue). Either is less convenient and more burdensome for the plaintiff. Waiting to hear arguments, but I expect the Court to be more divided on this case than in most of the other recent PJ cases.

Finally, on a teaching point. I use World Wide to show the intersection between subject matter and personal jurisdiction and the strategic choices that parties must make. Depending on the outcome in Ford, everything about WW would be different if the case arose now.

The Robinsons sued Audi, VWA, World Wide (the regional distributor), and Seaway (the dealer) in Oklahoma state court in 1975. Audi and VWA recognized they were stuck in Oklahoma, but wanted to be in federal court. WW and Seaway, both from New York, destroyed complete diversity because the Robinsons were from New York (the accident in Oklahoma prevented them from reaching Arizona and establishing the new residence so as to change their domiciles). So Audi and VWA financed WW and Seaway to challenge personal jurisdiction through the OK courts and to SCOTUS. Following the SCOTUS decision and the dismissal of WW and Seaway in 1980, Audi and VWA removed. But that strategy is unavailable under current law. In 1988, Congress amended what is now § 1446(c)(1) to prohibit renoving later-becomes-removeablae diversity cases more than one year after filling. So Audi and VWA now gain nothing from financing WW and Seaway to get out of the case. Given the cost of litigation, would WW and Seaway thus decline to challenge personal jurisdiction, litigate in Oklahoma, and hope to shift the blame onto the manufacturers?

On the other hand, if the Court rejects jurisdiction in Ford, Audi and VWA would have a different strategy--join WW and Seaway in getting the case dismissed from Oklahoma.

Posted by Howard Wasserman on October 6, 2020 at 09:55 AM in Civil Procedure, Howard Wasserman, Judicial Process | Permalink

Comments

CBR, thanks for the responses. I think we still see things differently.

“The accident occurring [in] the forum is an important suit-related event that the court specifically noted did not occur in BMS--so the Court there, at least, thought that the result might be different if it did.”

But Walden makes this a distinction without much of a difference. Which leads to your next point:

“I would also separate out contacts and relatedness . . . . [H]ere, there's no question of contacts--Ford has tons of purposeful contacts in the forum. The Court has never said you can't consider other factors for relatedness . . . “

But it has. The case law read collectively makes fairly clear that the Court does not “separate out.” BMS strongly indicates something prior cases suggested as well: “arise out of, or relate to, the D’s contacts with the forum state” does not provide two alternative bases for establishing minimum contacts. First, as the Court recognized in BMS, taking this approach would begin to erase the principled distinction between general and personal jurisdiction. Second, under the approach, BMS would have almost certainly come out differently given its massive purposeful contacts with CA that were not causally related to the P’s claims. And, again, in light of Walden, emphasizing that the difference here is that the injury happened in the forum state, unlike in BMS, doesn’t seem important.

In other words, the Court has never decided this exact issue with these exact facts, but I think way too much is being read into this reality. With this said, on the normative side, it wouldn’t shock me if the Court changes course and creates a new “relatedness” analytical branch separate from “arise out of.” And there are good policy arguments that it should.

Posted by: Edward Cantu | Oct 9, 2020 2:19:58 PM

I would also separate out contacts and relatedness--you are exactly right that "unilateral activity of a third party can't be the basis of minimum contacts." But here, there's no question of contacts--Ford has tons of purposeful contacts in the forum. The Court has never said you can't consider other factors for relatedness, though, and states have historically exercised jurisdiction in this kind of products-liability case.

Posted by: CBR | Oct 8, 2020 6:41:21 PM

I think there's another step between "The Court indicated that the “related to” standard is not met merely because BMS committed the same conduct in other fora as it did in CA" and "In other words, it strongly indicated a causality requirement"--and that's whether other evidence of relatedness short of causality can count for relatedness. The accident occurring the forum is an important suit-related event that the court specifically noted did not occur in BMS--so the Court there, at least, thought that the result might be different if it did.

Posted by: CBR | Oct 8, 2020 6:39:43 PM

CBR, after looking at your article, and re-reading the case—along with the OP—I’m not convinced (but I'm open to being convinced).

Upon looking into it further, Ford seems to present the same issue addressed in BMS. In BMS the non-CA Ps’ claims, and the facts supporting those claims, were virtually identical, except for one thing: it so happened that the non-CA claims were premised on out of state conduct not causally related to the non-CA Ps’ claims. The Court indicated that the “related to” standard is not met merely because BMS committed the same conduct in other fora as it did in CA. In other words, it strongly indicated a causality requirement:

“The State Supreme Court found that specific jurisdiction was present without identifying any adequate link between the State and the nonresidents’ claims. As noted, the nonresidents were not prescribed Plavix in California, did not purchase Plavix in California, did not ingest Plavix in California, and were not injured by Plavix in California. The mere fact that other plaintiffs were prescribed, obtained, and ingested Plavix in California—and allegedly sustained the same injuries as did the nonresidents—does not allow the State to assert specific jurisdiction over the nonresidents’ claims. As we have explained, “a defendant’s relationship with a . . . third party, standing alone, is an insufficient basis for jurisdiction.” Walden, 571 U. S., at ___ (slip op., at 8). This remains true even when third parties (here, the plaintiffs who reside in California) can bring claims similar to those brought by the nonresidents.”

Similarly, as the petition summarizes the lower court’s opinion:

Having ruled that due process requires no causal connection, the majority found that Bandemer’s claims “relate[d] to” Ford’s in-forum conduct. Ford “sold thousands of * * * Crown Victoria cars * * * to dealerships in Minnesota” and “the Crown Victoria is the very type of car that Bandemer alleges was defective.”

Of course, we do have the fact that, here, the car ultimately ended up on Minn. But to the extent that meaningfully changes what the issue is, that seems settled as well give that Brennan's foreseeability standard lost out, and the court has repeatedly said that the unilateral activity of a third party can't be the basis of minimum contacts.

What am I missing, if anything? I’m open to having my mind changed here.


Posted by: Edward Cantu | Oct 8, 2020 3:54:06 PM

I have longer thoughts here: https://www.law.georgetown.edu/georgetown-law-journal/glj-online/fords-jurisdictional-crossroads/. In short, I think it's a really interesting case, and not at all settled by BMS!

Posted by: CBR | Oct 7, 2020 4:37:31 PM

The way I see it, this was already resolved in Bristol-Myers Squibb.

Posted by: Edward Cantu | Oct 6, 2020 10:14:47 AM

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