In today’s polarized society, it seems like there isn’t much that we can all agree on. However, the recent Supreme Court term proved that there was at least one thing all eight justices can agree on—at least when it comes to one specific set of facts in one specific case. The decision comes from a products liability case in Montana, and at its core is the issue of personal jurisdiction.
We will be learning more about the issue of jurisdiction in the coming weeks, but let’s just start with this: Personal Jurisdiction is the court’s power over parties in a lawsuit. It is also a due process issue—is it fundamentally fair that a defendant in a lawsuit can be compelled travel elsewhere to defend itself? Personal jurisdiction comes in two forms: general and specific. To illustrate the difference, let’s use the above-mentioned Ford Motor Company v. Montana 8th District Court as an example. At the core of the case is a claim over a faulty 1996 Ford Explorer.
Let’s take a look at the facts:
- Ford Motor Company’s principal place of business is Michigan.
- The injured party was a resident of Montana, where the injury also occurred.
- The car was not initially purchased in Montana, and plaintiff did not directly purchase the car from the Ford Motor Company.
- The car was not manufactured in Montana.
- Ford maintained a network of dealerships and service centers in Montana.
- Ford advertised and marketed the exact model that caused the injury in the state of Montana at the time it was manufactured.
Given the above facts, is it fundamentally fair for Ford to be required to defend itself in Montana (specific personal jurisdiction), or should the suit take place in Michigan where Ford is based (general personal jurisdiction)? Ford based its argument around the decision in a 2016 Supreme Court Case: Bristol Meyers Squibb v. California, in which a similar case was dismissed because of a lack of ties between the plaintiffs and the state where the suit took place (California). However, the court found this to be a fundamentally different set of facts {1}. In the Montana case, the court found that Ford did have sufficient ties to Montana to justify bringing a suit there—through its networks of dealerships and advertisements—including advertising the very make and model causing the injury. This, alone, is enough to apply the principal of specific personal jurisdiction in this case {2}.
As you can see—facts matter! Change any of the bulleted points above, and the case could have been decided differently. Taking into account this brief summary I wanted to pose two questions:
- Of the above listed facts, which one would have the biggest impact on the outcome of the case if it were to change?
- Do you agree with the expanded view of what constitutes specific personal jurisdiction? Why or Why Not?
Footnotes:
Based on the facts that are listed, I think that Ford maintaining a network of dealerships and service centers in Montana would have the biggest impact on the case if it were to change.
ReplyDeleteIf Ford did was not selling, marketing, and servicing cars in Montana, I don't think that Ford would have sufficient ties to Montana that would justify specific personal jurisdiction.
Given the facts, I do think it's fair that specific personal jurisdiction was upheld.
Sam...what if Ford did not sell, market or service the make and model of the vehicle that was involved in the accident? Would that make a difference as to whether there were sufficient contacts between Ford and Montana to justify requiring Ford to defend a lawsuit in Montana? What if the accident and injury did not occur in Montana? What if the plaintiff was from Wyoming? Would any of those facts singly, or taken together, change the outcome?
DeleteI agree with Sam. What's also interesting is: would not this kind of case relate to nearly all of the United States? (Considering... I'm fairly certain Ford has dealerships and service centers plus advertises throughout the country). And given that the facts in other cases could be quite similar if not exactly the same. It seems that if I was "Ford" I would need to prepare to litigate just about everywhere in the United States.
ReplyDeleteEric...the likely impact of this ruling is that Ford will be defending itself in every state on claims that one of its vehicles was defective and caused an accident.
DeleteBased on the facts presented, if Ford did not maintain a network of dealerships and service centers in Montana, the case could have a different outcome. Ford having a network in Montana opens the case to Montana, as they have contact in the state, which is a requirement for personal jurisdiction.
ReplyDeleteI agree that the expanded view of specific person jurisdiction applies in the Ford Motor v Montana case. The case that Ford based its argument on was different as the company (BMS) being sued did not develop, market, manufacture, label or package in the state of California. Ford has multiple avenues of presence in Montana, in addition to their network of dealerships, they also advertised and marketed the exact model in the state of Montana.
I agree with Sam as well. Looking at the facts of the case as provided in posting, there are more ties for both the injured party and the defendant than not. Also, requiring the injured party to travel to a state they do not have any ties to would cause an unfair financial burden. I know that is beyond the stated facts of the case, but it does need to be considered. I also agree with Eric that because the vehicles are sold across the country through affiliates/dealerships, Ford and any dealership will need to be prepared to litigate in any state where the vehicles are sold or advertised. I agree with the expanded definition of specific personal jurisdiction.
ReplyDeleteTrina...You state that "Ford and any DEALERSHIP will need to be prepared to litigate in any state where the vehicles are sold or advertised. So, if a New York resident accesses the website of a Ford dealership in Utah and buys the car online and the vehicle subsequently malfunctions in New York will the Utah car dealership be required to defend itself in a New York Court? Is that fundamentally fair? Does that comport with due process?
DeleteI agree with all the above comments. If Ford did not have a strong presence in Montana, I think the outcome would have been different. If a company enters a state market through targeted advertisements, dealerships, service centers and in a different state than its principle state of business, it constitutes specific jurisdiction. There clearly wasn’t a casual link between Ford and Montana. The fact that they marketed and advertised the exact make and model in Montana, is the cherry on top.
ReplyDeleteUpon review of the hyperlinks and synopsis provided, I agree with the previous comments above, that if Ford did not maintain a dealership and service centers throughout the state of Montana, that the facts of the case would be different, and possibly more aligned with Bristol Meyers Squibb v. California.
ReplyDeleteReviewing the case, it tracks the assembly of the vehicle in Kentucky, it being sold to a dealership in Washington, being sold to an Oregon individual, then being bought by a Montana resident. Because of this trail of transactions across multiple states, it seems absurd to consider any other state to try this case in other than the final state of the vehicle and the owner.
One point that Trina mentioned that I think is important is the financial burden and expectations placed upon the injured party if they were required to travel to the headquarters of whatever large corporate company they incurred their injury from.
Arin...You note favorably Trina's astute recognition that it would place an unfair financial burden if an injured party had to travel to the corporate headquarters of the company that caused the injury. How would that burden be considered and weighed in the factual context I posed in my reply to Trina, i.e. where a New York resident buys a car online from a Utah dealership and sues the Utah dealership in New York when the car subsequently malfunctions in New York. Isn't it an unfair financial burden to place on the Utah dealership to have to travel to New York to defend itself?
DeleteAlthough I agree with the OP pertaining to the fact that the dealership existed in Montana, the fact that "Ford advertised and marketed the exact model that caused the injury in the state of Montana at the time it was manufactured" is crucial to the case as well. Not only is existing within the state that the lawsuit was being claimed necessary, needing to also be marketing such vehicle to that specific public warrants scrutiny.
ReplyDeleteFord may have dealerships across many states, but if at the time of purchase they were not even selling such vehicle, could they have been liable? I think not. The reason being the plaintiff would not have been influenced by direct marketing should be sued.
As to the financial burden, a multi-billion dollar company should be able to bear such weight. Is this not a cost in search of every last penny that the American public has?
Cristobal...Should the question of personal jurisdiction depend solely on the wealth of the defendant? In other words, a wealthy defendant should be compelled to defend themselves in any state, no matter how far away, whereas a less wealthy defendant should not?
DeleteYes, "since venue provisions are designed in part to protect a defendant from being forced to litigate in an 'unfair' forum," there are certain "considerations such as the judges, the desirability of prospective jury pools, and length of time until trial" that can assist in determining the venue. (p. 81, M & M) There are locations that have both legal and real-world consequences, not limited to the wealth of the defendant but rather, takes into account the defendant and the plaintiff.
DeleteAfter rereading your first question, not "solely" does wealth play a role but it is a factor of determining the venue.
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ReplyDeleteOf the facts listed, I believe that Ford maintaining a network of dealerships and service centers in Montana would have the biggest impact on the outcome if it were to change. Having worked in an auto dealership that reports to and represents a large manufacturer, the local dealerships are the equivalent of the main corporation and represents them as such. This relates to the in-state activity argument described in Walden v. Fiore where there was no in-state activity on the defendant’s behalf, so specific personal jurisdiction could not be applied. The fact that Ford sells and maintains their vehicles at local dealerships in Montana proves in-state activity which means the specific personal jurisdiction must apply.
ReplyDeleteSomething not mentioned in the case, but of interest, is that of vehicle recalls. Even if the vehicle in question was owned by a fifth owner, in matters of defective manufacturing, the factory is responsible for doing as much as it can to get the vehicle into the closest certified dealership to repair or replace the defect. The fact that auto manufacturers have to take on this level of responsibility because their product does not meet a certain safety standard (www.nhtsa.gov) to me proves there is implied understanding of their ownership and liability when it comes to their products no matter which state the vehicle ends up in.
Stephanie...you make a good POLICY point about a manufacturer's responsibility in the event of a recall. But that responsibility is the result of federal statutes which impose that responsibility and is not related to the legal issue of whether an automotive manufacturer has sufficient contacts with a particular state.
DeleteI agree with the comments above, stating Ford's presence in the State of Montana was a big factor, and I think there is another factor that plays a major role. That being, the fact the injured party was a resident of the forum state.
ReplyDeleteThe definition of Personal Jurisdiction, based on the link provided by the original poster, indicates, "The authority of the court to issue orders to persons present within the territory comes from the sovereign power of the government." Although many people think of the sovereign power of the government in generally negative terms--such as charging, sentencing, and incarcerating citizens when they break the law--there is also a sovereign responsibility for the government to protect it's citizens. When a citizen of a state is harmed by a malfunctioning product, it is the duty of that state to ensure their rights are protected.
To tie this back to the FORD case, had the person been only driving through Montana but was a resident of, say, Utah, I think it may have been a harder sell for personal jurisdiction to remain with Montana.
Also, I do agree with the expanded view of what constitutes specific personal jurisdiction. As we have already touched on in some of our classes, and I'm sure will be sufficiently hammered into our heads many times, is that words matter. There is a reason the definition of personal jurisdiction includes the "or relates to" portion. If personal jurisdiction was meant to be more narrowly defined, they likely would not have added such subjective language to it.
I agree with all the above comments. Montana desired to protect their state reputation that car was not manufactured in Montana because of Markkaya Gullet case (1). However, the plaintiff didn't directly purchase the car from Ford Motor, which means the vehicle's previous owner/dealership has failed inspection and should file a lawsuit on the dealership instead.
ReplyDeleteThus, this ruling surely does add an extra depth to jurisdiction because of established residences through the Ford dealerships regardless of they are not based in that dealership.
(1) https://www.gwlr.org/ford-motor-co-v-montana-eighth-judicial-district-court/
From the facts, the one I believe would have the biggest impact on the case outcome would be that the vehicle was not manufactured in Montana. In my opinion, when a suit is filed, the parties will seek remedy by declaring jurisdiction in the most applicable way. Meaning, the source of the malfunctioning product - Ford. The litigating parties would seek jurisdiction in the jurisdiction which will likely provide the most favorable outcome. The comments above all touch on solid points and I concur with the majority of them. Although I believe specific jurisdiction would prevail here, the parties to this action could, at the onset of legal action, move the Court to have this matter refiled in the state where the original manufacturing of the defective product took place. Ultimately, I believe the elements of specific jurisdiction would prevail.
ReplyDeleteBased on the facts listed, I agree with the majority opinion that because Ford had a network of dealerships and service centers in Montana, specific jurisdiction is appropriate in this case. I also agree that because Ford marketed the exact make and model vehicle specifically to the Montana market, and the burden of traveling for the plaintiff is unreasonable, specific personal jurisdiction would prevail.
ReplyDeleteJust read the brief of the case, NORTH SAILS GROUP, LLC v. BOARDS AND MORE GMBH, from Westlaw. The brief explained that the plaintiff could not hold the defendant accountable to the jurisdiction thereof. "Commercial Law: Due process minimum contacts did not exist to exercise specific jurisdiction in contractual action against Austrian licensee of surf sports products." Definitely take a read! The first two paragraphs of the opinion are fascinating!
ReplyDeletehttps://www.westlaw.com/Document/I615e15e0043011ec8cc1ca5e79b1b862/View/FullText.html?transitionType=Default&contextData=(sc.Default)&VR=3.0&RS=cblt1.0
Many have covered how influential Ford maintaining a network of dealerships and service centers in Montana is to the outcome of this case.
ReplyDeleteA close second change would be the fact that the injured party was a resident of Montana, where the injury also occurred.
If the injured party was simply a resident of Montana but the injury happened in Michigan and the injured party returned to their home state, it would be reasonable for the case to be tried in Michigan.
One fact that would change the ruling significantly would be if Ford Co. was not registered in the State of Montana, i.e. they had no business license to conduct business in the state of Montana. If this were the case, they legally could not have a physical presence (brick and mortar) in the state. That would mean no retail outlets or service entities owned by them. The facts also state that the sale of the vehicle in MT was a private sale and not from a retail outlet owned by Ford. If these facts changed, then Ford Co., I believe, would fall under General Personal Jurisdiction--based on where the defendant is "at home" i.e. where they are incorporated. Then, as I understand the types of jurisdiction the trial would be held in their state of incorporation, which is stated as Michigan and the plaintiff would be required to travel to Michigan for trial in that state court system.
ReplyDeleteI am not certain about the rules of advertising in a state and how they apply, but my assumption is that it was national advertising and not state specific advertising. Would like to have someone comment or chime in on this aspect, as I believe a different rule of law might apply.
I just have one random question: Would the Commerce Clause have any effect on this ruling? I may be way off base, but I just thought I would ask? Comments, anyone?
ReplyDelete