Member Article

Companies subject to product liability lawsuits – and their counsel – know the importance of promptly examining whether the company is subject to general personal jurisdiction or specific personal jurisdiction of the forum court. A court with general personal jurisdiction over a defendant can hear any and all claims against that defendant. After the United States Supreme Court’s decisions in Daimler AG v. Bauman, 134 S. Ct 746 (2014) and BSNF Railway Co. v. Tyrell, 137 S. Ct. 1549 (2017), it seems clear that absent exceptional circumstances, a court can exercise general personal jurisdiction over a defendant, regardless of the type of claim asserted, only in a forum where a defendant is incorporated or has its principal place of business. Assessing whether a court can exercise specific personal jurisdiction over an out-of-state defendant is more challenging.

What Does “Arise Out Of Or Relate To” Mean?

The Supreme Court has held that a court may exercise specific personal jurisdiction over an out-of-state-defendant only when the claims at issue “arise out of or relate to” the defendant’s in-state activities. Burger King Corp. v. Rudzewicz, 105 S.Ct. 2174 (1985). But what does “arise out of or relate to” mean? Must the nonresident defendant’s in-state conduct have caused or given rise to the plaintiff’s claims to satisfy specific personal jurisdiction? Or is some less direct connection between the nonresident defendant’s in-state conduct and the plaintiff’s claims sufficient to satisfy specific personal jurisdiction?

The Supreme Court’s Answer To The “Arise Out Of Or Relate To” Question Will Have Significant Consequences

Because lower courts have answered these questions differently, defendants have been unable to determine with certainty what jurisdictions they can expect to have to defend product liability suits. The Supreme Court will soon provide needed guidance to manufacturers and other businesses with interstate operations as to where they are subject to specific personal jurisdiction.

In the context of two consolidated automotive product liability cases involving Ford Motor Company (“Ford”) wherein state supreme courts found personal jurisdiction proper over out-of-state Ford even though (a) Ford did not design, manufacture, or sell the subject vehicles in the forum states; and (b) Ford’s contacts with the forum states did not cause the accidents at issue, the Supreme Court is set to address what “arise out of or relate to” means for purposes of specific personal jurisdiction. Oral argument, originally scheduled for the April Term 2020 but postponed due to the pandemic, is now set for the October Term 2020.

The Supreme Court’s decision should have significant consequences, particularly for manufacturers of products that are distributed nationwide and manufacturers of mobile/movable products that cross state lines. If the Supreme Court were to agree with Ford’s position that there must be a causal link between a defendant’s forum-state conduct and a plaintiff’s claims, then defendants have needed predictability.

However, if the Supreme Court were to affirm the Minnesota and Montana Supreme Courts’ less stringent approaches to specific personal jurisdiction, then manufacturers can expect to have to defend against arguments that they are subject to specific personal jurisdiction in every state where they sell their products or where there products can be found, notwithstanding the lack of a relationship between a specific claim and a manufacturer’s contacts in the forum state.

Not surprisingly, this matter has generated tremendous interest on both sides of the v. The federal government, the United States Chamber of Commerce, the Alliance of Automobile Manufacturers, and the Pharmaceutical Research and Manufacturers of America are but a few of the entities that have filed amicus briefs in support of Ford’s position. Stakeholders filing amicus briefs in support of plaintiffs/respondents include a group of thirty-nine states and the District of Columbia, The American Association for Justice, and The Center for Auto Safety.

The complete article, "Alert to Product Liability Defense Counsel: United States Supreme Court Set to Again Address Specific Personal Jurisdiction," can be found in the July 2020 edition of the International Association of Defense Counsel (IADC) Committee Newsletter.