In January of 2020, the United States Supreme Court granted certiorari in two consolidated cases to address the limits of specific personal jurisdiction. See Ford Motor Co. v. Montana Eighth Judicial Dist. Ct., Case No. 19-368; see also Ford Motor Co. v. Bandemer, Case No. 19-369. The Court’s decisions in these cases may help to further clarify the limits of specific personal jurisdiction, and may decide whether conduct within the forum state must be the actual conduct that caused a plaintiff’s injury in order to confer jurisdiction. Oral argument originally was set for April 27, 2020, but has been postponed to October 7, 2020 due to the COVID-19 outbreak.
The two cases to be considered by the Court stem from interpretations of the Supreme Court’s decision in Bristol-Myers Squibb v. Superior Court, 137 S. Ct. 1773 (2017), which stated that the due process protections for non-resident defendants under the Fourteenth Amendment required that satisfying specific jurisdiction necessitates both that the defendant purposely avail itself within a forum state and that the claims in the matter “arise out of or relate to” defendant’s conduct in the forum state.
Below are discussions of the two cases the Supreme Court will be considering, originally venued in the states of Montana and Minnesota, and how recent decisions in California and Illinois could be impacted by the Supreme Court’s future decision.
The Supreme Court is set to review Ford Motor Co. v. Montana Eighth Judicial Dist. Ct., 395 Mont. 478 (2019) in which the Montana Supreme Court interpreted Bristol-Myers Squibb to allow jurisdiction over a defendant automaker, even though there was no link between the plaintiff’s alleged injuries and any conduct by the defendant automaker in the state of Montana. In Ford Motor Co., the automobile accident at issue occurred in Montana, but the alleged defect occurred in a different state, where the vehicle was designed, manufactured, assembled, and sold. Nonetheless, the court found that the first prong of the Bristol-Myers Squibb test was satisfied by the “stream-of-commerce plus” theory, based on the plurality opinion in Asahi Metal Indus. Co. v. Superior Court of Cal., as the court found the automaker purposefully availed themselves by introducing the product into the stream of commerce generally, and by also engaging in additional conduct to serve the market in the forum state, which included advertising, maintaining a business registration, and operating subsidiaries in the state.
The court found the second prong of the Bristol-Myers Squibb test was also satisfied based on a stream-of-commerce theory, notingthere does need to be a direct connection between the actions of a defendant and the alleged injury to satisfy the “arise out of or relate to” requirement of the Bristol-Myers Squibb test. Further, the court noted that “[w]hen the defendant purposefully avails itself of the privilege of conducting activities in a specific forum by placing a product into the stream of commerce, the plaintiff’s claims will relate to the defendant’s forum-related activities as long as the connection between the defendant’s in-state conduct and the plaintiff’s claim is sufficient enough to not offend due process.”
The Supreme Court is also set to review the Minnesota Supreme Court’s finding regarding personal jurisdiction over an automaker in a similar matter, Bandemer v. Ford Motor Co., 931 N.W.2d 744 (Minn. 2019). In Bandemer, the Minnesota Supreme Court held that the defendant’s data collection, marketing, and advertising in Minnesota established specific personal jurisdiction, even though none of those activities actually caused the alleged injury and the vehicle at issue was not designed, manufactured, assembled, or sold in Minnesota. The Minnesota Supreme Court determined that defendant’s actions targeting Minnesota for sales of passenger vehicles, including the same model vehicle as the one involved in the matter, fit into the broad term of “arise out of or relate to” prong of the Bristol-Myers Squibb test. While the actual vehicle involved in the lawsuit had no connection to Minnesota, the court determined there was specific personal jurisdiction because the defendant’s activities in the state related to the same model of vehicle.
While the California Supreme Court has not yet addressed the definition of “arise out of or relate to” after Bristol-Myers Squibb, the outcome of the previously mentioned U.S. Supreme Court decisions could affect appellate decisions in the state.
Two recent decisions from the California Courts of Appeal have held that Bristol-Myers Squibb may still allow a California court to exercise specific personal jurisdiction over a defendant, even when the defendant’s contacts with the forum state did not proximately cause a plaintiff’s injury.
The Fourth District Court of Appeal noted that California precedent rejecting a proximate cause requirement between the defendant’s conduct and the alleged injury may still be valid in David L. v. Superior Court, 29 Cal.App.5th 359, (Cal. Ct. App. 2018), as the Supreme Court did not address the strength of a causal link required. As such, the state precedent could remain viable.
Moreover, in Jayone Food, Inc. v. Aekyung Industrial Co., Ltd., 31 Cal.App.5th 543, 558 (Cal. Ct. App. 2019), the Second District Court of Appeal found specific jurisdiction existed over a foreign manufacturer of a humidifier cleaning agent. The court determined there was jurisdiction because the manufacturer had general sales of the same cleaning agent to a California distributor, even though those general sales did not include the specific cleaning agent at issue in the case.
If the Supreme Court reverses the pending cases before it, the California cases rejecting a proximate cause requirement to find specific jurisdiction will most likely no longer be good law.
One of the most recent major applications of the principles of Bristol-Myers Squibb took place in Rios v. Bayer Corp., 2020 IL 125020, in which Bayer was sued for allegedly injuring women via its contraceptive device Essure. In Rios, approximately one hundred and sixty of the plaintiffs did not live in Illinois. Further, Bayer does not maintain a headquarters in the state of Illinois, nor is it incorporated there. Nonetheless, two trial courts and the appeals court found that the case was in a proper forum. It was only on appeal to the Illinois State Supreme Court that the determination was made that this case could not meet the standard described in Bristol-Myers Squibb.
Plaintiffs in Rios argued that Bayer was subject to specific personal jurisdiction because Bayer “used Illinois to develop, label, or work on the regulatory approval for Essure” and “created the Essure Accreditation Program [(a training program for physicians)] and the marketing strategy for Essure in Illinois”. Plaintiff maintained that those in-state activities, as well as Bayer’s decision to contract with physicians and key opinion leaders in Illinois to conduct clinical trials, permitted the court to exercise specific jurisdiction over the defendants as to the claims of the nonresident plaintiffs. Therefore, the court determined that the issue at hand was whether the nonresident plaintiffs’ claims arose out of, or related to, those activities. The Illinois State Supreme Court unanimously ruled, in favor of Bayer, that the claims did not arise out of or relate to any activity in the forum state, and the case was dismissed. The court found there was no evidence that established manufacturing procedures in Illinois. Further, the court also found that the nonresidents were not implanted in Illinois and there was no evidence that Bayer trained physicians in Illinois. Therefore, there were no jurisdictionally relevant links between the claims and the forum state of Illinois.
The cases pending before the Supreme Court could call into question the Illinois Supreme Court’s application of the Bristol-Myers Squibb test, if the Supreme Court does not reverse the previous case outcomes at the lower court levels, as this would change the definition of “arise out of or relate to”.