We've blogged about the United States Supreme Court's pending personal jurisdiction cases before. Well, they pend no longer. Yesterday the Court unanimously (with a couple of concurrences) ruled that resident plaintiffs injured by products originally manufactured and sold elsewhere could sue a nationwide company like Ford – that "purposefully avail[ed] itself of the privilege of conducting activities within the forum State" – in their home states, rather than sue only where such a defendant was "at home." Ford Motor Co. Montana Eighth Judicial District Court, ___ S. Ct. ___, 2021 WL 1132515, at *4 (U.S. March 25, 2021) (here is the slip opinion for those without the luxury of law firm resources).
While plaintiffs in product liability litigation involving durable, mobile products dodged a jurisdictional bullet in Ford v. Montana, we don't view this case as bad news for our clients selling single-use products that continually face masses of forum-shopping litigation tourists.
First and foremost, the key fact – emphasized throughout Ford v. Montana – is precisely that those plaintiffs were not litigation tourists. From the very first paragraph of the opinion:
The accident happened in the State where suit was brought. The victim was one of the State's residents. And [defendant] did substantial business in the State − among other things, advertising, selling, and servicing the model of vehicle the suit claims is defective.
2021 WL 1132515, at *3. And again:
[H]ere, the plaintiffs are residents of the forum States. They used the allegedly defective products in the forum States. And they suffered injuries when those products malfunctioned in the forum States. In sum, each of the plaintiffs brought suit in the most natural State.
Id. at *8. See id. at *7 (describing cases as "brought by state residents"), *8 (jurisdiction "when the product malfunctions there"); id. (invoking state interest in "providing [their] residents with a convenient forum"); at *9 ("resident-plaintiffs allege that they suffered in-state injury").
For our purposes that matters a lot, because the Supreme Court took pains to clarify the basis for its recent Bristol-Myers Squibb Co. v. Superior Court, 137 S. Ct. 1773 (2017), decision as barring personal jurisdiction over suits brought by forum-shopping non-residents whose injuries and product use occurred elsewhere. Shutting down litigation tourism has always been at the core of our interest in personal jurisdiction.
Since BMS was decided, plaintiffs have relied on a recitation (in the facts section of that opinion) of the what the BMS plaintiffs failed to show – that the defendant "did not develop" the product, "did not create a marketing strategy," and "did not manufacture, label, package, or work on the regulatory approval of the product" in the forum state, 137 S. Ct. at 1778 – as a wish list. They argue that even litigation tourists can use such purported contacts to assert "specific" personal jurisdiction, all the while ignoring the BMS court's recitation of what had been affirmatively proven:
As noted, the nonresidents were not prescribed [the drug] in California, did not purchase [the drug] in California, did not ingest [the drug] in California, and were not injured by [the drug] in California. The mere fact that other plaintiffs were . . . does not allow the State to assert specific jurisdiction over the nonresidents' claims.
BMS, 137 S. Ct. at 1781.
That route should no longer be open to litigation tourists. Ford v. Montana made it crystal clear just what the BMS Court had "emphasiz[ed]," 2021 WL 1132515, at *8, in reaching the conclusion that specific personal jurisdiction could not lie:
We found jurisdiction improper in [BMS] because the forum State, and the defendant's activities there, lacked any connection to the plaintiffs' claims. The plaintiffs, the Court explained, were not residents of California. They had not been prescribed [the drug] in California. They had not ingested [the drug] in California. And they had not sustained their injuries in California. In short, the plaintiffs were engaged in forum-shopping − suing in California because it was thought plaintiff-friendly, even though their cases had no tie to the State.
Id. (BMS citations omitted) (emphasis added).
We mentioned in reviewing the oral argument that "litigation tourism has a bad name," and boy were we right about that. Non-resident forum-shoppers cannot constitutionally assert specific personal jurisdiction, absent in-state product use or injury:
Yes, [defendant] sold the specific products in other States, as Bristol-Myers Squibb had. But here, the plaintiffs are residents of the forum States. They used the allegedly defective products in the forum States. And they suffered injuries when those products malfunctioned in the forum States.
Id. That is the court-described "key part" of BMS's rationale why personal jurisdiction was unconstitutional in that case. Id. at *9. Forum shoppers lack any "affiliation between the forum and the underlying controversy," id. at *5 (quoting BMS), and that's what mattered – not any supposedly missing facts about a defendant's forum contacts that litigation tourists might be able to dredge up.
Our second observation is that we question whether there is anything left of "stream of commerce" personal jurisdiction after Ford v. Montana. Given the roundabout way that the particular products at issue reached the forum states, through "later resales and relocations by consumers," 2021 WL 1132515, at *3, Ford v. Montana had all the makings of a stream of commerce case. But "stream of commerce" is nowhere mentioned, even though plaintiffs and most of their amici relied (in part) on stream of commerce cases. The only basis for jurisdiction that the Court addressed was whether the litigation was sufficiently "related to" (which the Court treated as separate from "arising from," 2021 WL 1132515, at *5) the defendant's contacts with the relevant states.
Thus, to the extent that "stream of commerce" claims involve defendants that plaintiffs can allege "extensively promoted, sold, and serviced" the allegedly "defective product" in the forum state, 2021 WL 1132515, at *9, they will no longer need to rely on a stream of commerce theory. That takes the more sympathetic cases out of the mix. As for the rest, lacking "systematic contacts," id. at *7 – the cases in which stray products find their way into states where defendants did not otherwise market them – Ford v. Montana provides cold comfort:
That does not mean anything goes. In the sphere of specific jurisdiction, the phrase "relate to" incorporates real limits, as it must to adequately protect defendants foreign to a forum.
Id. at *5. Jurisdictional "contacts must be the defendant's own choice and not "random, isolated, or fortuitous." Id. at *4 (citation and quotation marks omitted).
Ford v. Montana certainly suggests, if not outright holds, that "specific jurisdiction attaches . . . when a company like [defendant] serves a market for a product in the forum State." Id. at *6. Thus, defendants in cases like Asahi Metal Industry Co. v. Superior Court, 480 U. S. 102, 110 (1987), and J. McIntyre Machinery, Ltd. v. Nicastro, 564 U.S. 873 (2011), can cite Ford v. Montana as further authority for the absence of specific personal jurisdiction in fortuitously-located product cases, where there is no evidence that they "deliberately extended" their product marketing into wherever they are being sued. 2021 WL 1132515, at *6.
Third, and finally, we point out something else we mentioned in our oral argument post – the looming presence of e-commerce. Footnotes in Ford v. Montana that suggest to us that the Court is ready to delve into cutting edge personal jurisdiction issues involving allegations of Internet-based product sales and other contacts.
One of the concurrences here expresses a worry that our [jurisdictional] body of law is not "well suited for the way in which business is now conducted," and tentatively suggests a 21st-century rethinking. Fair enough perhaps....
Id. at *5 n.2. A bit later on, "we do not here consider internet transactions, which may raise doctrinal questions of their own." Id. at *7 n.4. We don't hazard a guess how the Court would rule in an Internet-only forum contacts case, but we flag the issue because it is likely to arise at the Supreme Court level in the relatively near future.
This article is presented for informational purposes only and is not intended to constitute legal advice.