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04/07/2021 | News release | Distributed by Public on 04/07/2021 22:12

New U.S. Supreme Court Case Finds Local Personal Jurisdiction Over Auto Manufacturer in Ford Motor Co. v. Montana Eighth Jud. Dist. Ct.

The U.S. Supreme Court's recent decision in Ford Motor Co. v. Montana Eighth Jud. Dist. Ct. held that a state has specific personal jurisdiction over out-of-state mega corporations that advertise, sell, and service their products in that state and whose products cause injuries to the state's residents. Ford Motor Co. v. Montana Eighth Jud. Dist. Ct., 141 S. Ct. 1017 (2021).

The Supreme Court jointly heard two cases involving Ford's older model vehicles - a 1996 Explorer and a 1994 Crown Victoria - that were involved in serious accidents. In the case involving the Explorer, the tread separated from a rear tire causing the vehicle to spin out and roll into a ditch. The driver died at the scene of the crash. In the Crown Victoria case, the car rear-ended a snowplow also causing the car to land in a ditch. The air bag failed to deploy, causing the passenger serious brain damage. The plaintiffs in both cases alleged products liability and negligence causes of action and brought their respective actions in Montana and Minnesota state courts. The plaintiffs resided in these states, the accidents happened in these states, and the vehicles at issue were purchased in or relocated to these states.

Nonetheless, Ford contended that Montana and Minnesota lacked personal jurisdiction because the two vehicles at issue were not actually designed or manufactured in these states. The Court rejected that argument, holding 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 Court focused on Ford's extensive ties to the forum states, including 'advertising, selling, and servicing the model of vehicle the suit[s] claim[] [are] defective.' Ford engaged in wide-ranging promotional activities in the forum states, including television, print, online, and direct-mail advertisements. 'No matter where you live, you've seen them: 'Have you driven a Ford lately?'' The Court also noted that Ford encouraged a resale market for its products and manufactured the original parts of older cars to ensure that consumers can keep their vehicles running long past the date of sale. And almost all its dealerships buy and sell used Fords, as well as selling new ones.

In sum, 'Ford had systematically served a market in Montana and Minnesota for the very vehicles that the plaintiffs allege malfunctioned and injured them in those States.'

The Supreme Court distinguished Bristol-Myers Squibb Co. v. Superior Court of Cal., 137 S. Ct. 1773 (2017), a case originally filed in California, because the plaintiffs in that case were not residents of California, had not ingested or been prescribed the drug at issue in California, and had not sustained their injuries in California. 'In short,' the Court said, 'the plaintiffs [in Bristol-Myers] were engaged in forum-shopping.' The Court also distinguished Walden v. Fiore, 571 U.S. 277 (2014) because the 'defendant-officer had never taken any act to 'form[ ] a contact' of his own' with Nevada, the forum state. 'The officer had 'never traveled to, conducted activities within, contacted anyone in, or sent anything or anyone to Nevada.''