Specific versus General Jurisdiction for Corporations

Ford v. Montana

[https://www.supremecourt.gov/opinions/20pdf/19-368_febh.pdf FORD MOTOR CO. v. MONTANA EIGHTH JUDICIAL DISTRICT COURT ET AL.], CERTIORARI TO THE SUPREME COURT OF MONTANA No. 19–368. Argued October 7, 2020—Decided March 25, 2021.

Ford Motor Company is a global auto company, incorporated in Delaware and headquartered in Michigan. Ford markets, sells, and services its products across the United States and overseas. The company also encourages a resale market for its vehicles. In each of these two cases, a state court exercised jurisdiction over Ford in a products-liability suit stemming from a car accident that injured a resident in the State. The first suit alleged that a 1996 Ford Explorer had malfunctioned, killing Markkaya Gullett near her home in Montana. In the second suit, Adam Bandemer claimed that he was injured in a collision on a Minnesota road involving a defective 1994 Crown Victoria. Ford moved to dismiss both suits for lack of personal jurisdiction. It argued that each state court had jurisdiction only if the company’s conduct in the State had given rise to the plaintiff’s claims. And that causal link existed, according to Ford, only if the company had designed, manufactured, or sold in the State the particular vehicle involved in the accident. In neither suit could the plaintiff make that showing. The vehicles were designed and manufactured elsewhere, and the company had originally sold the cars at issue outside the forum States. Only later resales and relocations by consumers had brought the vehicles to Montana and Minnesota. Both States’ supreme courts rejected Ford’s argument. Each held that the company’s activities in the State had the needed connection to the plaintiff’s allegations that a defective Ford caused instate injury.

Held: The connection between the plaintiffs’ claims and Ford’s activities in the forum States is close enough to support specific jurisdiction.

My Thoughts

The law seems crazy here. Suppose Ford makes a car in Ohio, sells it in Iowa, and it explodes in Utah. Where can you sue? Utah seems the obvious place. That's where the accident-- or crime, if Ford purposely put a bomb in the trunk-- occurred.

It shouldn't matter even if Ford doesn't make or sell a single car in Utah. Ford is negligent or malicious in Ohio. Its agent meets the particular victim in Iowa. But the harm occurs in Utah. That's where many or all of the witnesses are.

Apparently, the caselaw is that a court must have both personal jurisdiction over the defendant and subject-matter jurisdiction. Is that in personam and in rem? "In order to enter a valid judgment against a defendant, a court must have both jurisdiction over the type of case brought by the plaintiff, also called subject matter jurisdiction, and jurisdiction over the defendant, referred to as in personam jurisdiction. If either is lacking, no valid action can be brought against the defendant in that court." https://www.sgrlaw.com/ttl-articles/2015/. That sounds like it's where the law made a wrong turn.

Majority Opinion

The majority has some convoluted linguistic point it wants to use to change the law for non-obvious reasons, and it is easy to mock. What is the real story here?

All quotations are "cleaned up".

The Fourteenth Amendment’s Due Process Clause limits a state court’s power to exercise jurisdiction over a defendant. The canonical decision in this area remains International Shoe Co. v. Washington, 326 U. S. 310 (1945). There, the Court held that a tribunal’s authority depends on the defendant’s having such “contacts” with the forum State that “the maintenance of the suit” is “reasonable, in the context of our federal system of government,” and “does not offend traditional notions of fair play and substantial justice.”...

That focus led to our recognizing two kinds of personal jurisdiction: general (sometimes called all-purpose) jurisdiction and specific (sometimes called case-linked) jurisdiction. See Goodyear Dunlop Tires Operations, S. A. v. Brown, 564 U. S. 915, 919 (2011).

A state court may exercise general jurisdiction only when a defendant is “essentially at home” in the State. General jurisdiction, as its name implies, extends to “any and all claims” brought against a defendant. Those claims need not relate to the forum State or the defendant’s activity there; they may concern events and conduct anywhere in the world.

Specific jurisdiction is different: It covers defendants less intimately connected with a State, but only as to a narrower class of claims. The contacts needed for this kind of jurisdiction often go by the name “purposeful availment.” Burger King Corp. v. Rudzewicz, 471 U. S. 462, 475 (1985). The defendant, we have said, must take “some act by which [it] purposefully avails itself of the privilege of conducting activities within the forum State.” Hanson v. Denckla, 357 U. S. 235, 253 (1958). The contacts must be the defendant’s own choice and not “random, isolated, or fortuitous.” Keeton v. Hustler Magazine, Inc., 465 U. S. 770, 774 (1984)....

These rules derive from and reflect two sets of values— treating defendants fairly and protecting “interstate federalism.” World-Wide Volkswagen Corp. v. Woodson, 444 U. S. 286, 293 (1980). Our decision in International Shoe founded specific jurisdiction on an idea of reciprocity between a defendant and a State. ...

One State’s “sovereign power to try” a suit, we have recognized, may prevent “sister States” from exercising their like authority. Id., at 293. The law of specific jurisdiction thus seeks to ensure that States with “little legitimate interest” in a suit do not encroach on States more affected by the controversy. Bristol-Myers, 582 U. S., at ___ (slip op., at 6). ...

One of the concurrences here expresses a worry that our International Shoe-based 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, but the concurrence then acknowledges that these cases have no distinctively modern features, and it decides them on grounds that (as it agrees) are much the same as ours. The other concurrence proposes instead a return to the mid-19th century—a replacement of our current doctrine with the Fourteenth Amendment’s original meaning respecting personal jurisdiction. But that opinion never reveals just what the Due Process Clause as understood at its ratification required, and its ground for deciding these cases is correspondingly spare. Post, at 11. This opinion, by contrast, resolves these cases by proceeding as the Court has done for the last 75 years—applying the standards set out in International Shoe and its progeny, with attention to their underlying values of ensuring fairness and protecting interstate federalism.

Bad Writing in the Majority Opinion: Squabbling, with Excess Citation

The worst example is this passage, which was in a footnote. I've left the garbage in this time, but added my boldface and original italics.

One of the concurrences here expresses a worry that our International Shoe-based body of law is not “well suited for the way in which business is now conducted,” and tentatively suggests a 21st-century rethinking. Post, at 1 (ALITO, J., concurring in judgment). Fair enough perhaps, see infra, at 12-13, n. 4, but the concurrence then acknowledges that these cases have no distinctively modern features, and it decides them on grounds that (as it agrees) are much the same as ours. See post, at 3-4; compare ibid. with infra, at 11–15. The other concurrence proposes instead a return to the mid-19th century—a replacement of our current doctrine with the Fourteenth Amendment’s original meaning respecting personal jurisdiction. Post, at 9-10 (GORSUCH, J., concurring in judgment). But that opinion never reveals just what the Due Process Clause as understood at its ratification required, and its ground for deciding these cases is correspondingly spare. Post, at 11. This opinion, by contrast, resolves these cases by proceeding as the Court has done for the last 75 years—applying the standards set out in International Shoe and its progeny, with attention to their underlying values of ensuring fairness and protecting interstate federalism.

The passage is a good example of bad writing. It cites to the dissents when specific cites are both unnecessary and unseemly, making the text harder to read and setting this up as a personal argument between the judges on the court.

I don't object to the majority opinion addressing the dissent too much. It certainly should address the dissent's arguments, just as it should address any relevant argument (a little more, actually, since even if the dissent's argument is stupid and not really relevant, it becomes relevant by dignity of being something a Supreme Court Justice thinks is worth writing). It should really do it in the main text, though, rather than setting up a debate in the footnotes, both to give respect to the dissenting colleague's argument and to make it easier to read. But addressing the argument in a footnote is better than nothing.

As a second point, though, it is gratuitous to name the dissenter, or even to say that the argument being addressed is from a dissent. (And I know it's a "concurrence" here, not a "dissent", but it's a dissenting argument, agreeing only in the result.) A majority opinion should be stand-alone. The dissents have no precedential value, zero authority, and don't need to be cited. They are more like briefs, but briefs of Very Important People, like a Solicitor General's brief or an amicus brief by somebody of special dignity like a retired Supreme Court Justice. It's also unnecessary because anybody's who's interested will see the connection with the dissents anyway. So it doesn't add useful information; its only effect is to highlight disagreement on the court.

This goes double for the page citations to the dissent. They are picky and pedantic, useless and undignified. The dissents are in the same pdf file, after all, and if the reader is too lazy to read the whole dissent, he can hit control-S and search for the phrase that's being quoted, if there is one. If there isn't even an exact phrase being quoted, the case for a page cite becomes simply laughable. The effect, in the end, is of the majority judge jumping on petty details in the other judge's dissent, acting like one party's counsel going after the other party's weak argument with a mordant "Aha! What a stupid thing he said--- see it's right there in print on page 4, paragraph 2 line 15 of the response brief for the motion to dismiss!" Let's have some dignity on the court.

So much for dignity. But perhaps it's not a bad thing if the Supreme Court loses its legitimacy; that is a question conservatives often ask themselves. What is more clearly bad is bad writing. Using a long footnote to argue for a substantive point is already bad writing, though maybe there's a case for it; I'd have to think more. But interrupting one's analysis with useless citation is even worse. Even if a citation is necessary, it is always unfortunate, and often best delayed till not just the end of a sentence, but the end of a paragraph. Here, the citations are unnecessary. Who needs to know the exact page of the point being contradicted? Who even needs to know it's a point from a dissent? By the same logic, an opinion ought to be festooned with page numbers from briefs hanging down from every other sentence, since judges usually just adopt arguments from the briefs of the parties and amici.

The Supreme Court is much to blame. Even the judges who didn't sign on to the majority opinion are to blame. They, too, are colleagues, and should help the majority to write better opinions even if they think the majority arguments are wrong. What this looks like is something a clerk wrote, someone who's writing style started out wobbly and then was crippled by too much experience on a law review following foolish Blue Book rules and being told not to think about what good writing is, just do what the rules say. It also smacks of experience with high-school debate tournaments, where the students are graded on a pedantic point system and eloquence is often not only unvalued, but frowned upon. That style of debating does teach students how to make logical arguments and support them with evidence, but it warps one's style unless combined with experience in parliamentary debate, which emphasizes style, clarity, and imagery by focussing not just on making the point for a robot listener, but a human. I also think I see a precious delight in "writing like a lawyer". Isn't it wonderful to be able to be able to write a sentence consisting of "Post at 7."? It's cute to see, actually, and it is a very good thing for a young lawyer to delight in being part of an ancient profession and its esoteric arts, but it's the duty of his elders to divert his puppyish joy to useful Latinisms like "in personam" and "res ipsa loquitur", to fun doctrines like "no servitudes on chattels", and to a relish for the fine points of net operating loss carryforwards.

Justice Kagan and the others have a responsibility not to let law review junior editors write the opinions, or, worse yet, not to write like law review junior editors.

Bad Writing in the Majority Opinion: Ibid and Id.

I see "ibid" and "id.", and I think "Ick." "Ick", as in "she scraped the ick off the back of the stove," though I am tempted to be more pungent in my examples.

In Ford v. Montana we see (with my boldface):

That focus led to our recognizing two kinds of personal jurisdiction: general (sometimes called all-purpose) jurisdiction and specific (sometimes called case-linked) jurisdiction. See Goodyear Dunlop Tires Operations, S. A. v. Brown, 564 U. S. 915, 919 (2011).

A state court may exercise general jurisdiction only when a defendant is “essentially at home” in the State. Ibid. General jurisdiction, as its name implies, extends to “any and all claims” brought against a defendant. Ibid. Those claims need not relate to the forum State or the defendant’s activity there; they may concern events and conduct anywhere in the world.

What use are these two "ibids"? Why would any reader ever want to see them splat onto the page in between the sentences he is trying to read? Is there anyone who would worry about where the phrase "essentially at home" might possibly come from who would not look to the previous sentence's "See Goodyear Dunlop Tires Operations, S. A. v. Brown, 564 U. S. 915, 919 (2011)" to find relief from his perplexity? If there is, such a person would not be helped by the sentence, "Ibid." Indeed, a reader at that primitive mental level would probably just wonder who Mr. Ibid was.

Alito Concurrence

  The law doesn't need any changes at all to address this case; Ford has a giant presence in the state, even if it didn't interact directly with the plaintiff with regard to this particular car. 

Since International Shoe, the rule has been that a state court can exercise personal jurisdiction over a defendant if the defendant has “minimum contacts” with the forum— which means that the contacts must be “such that the maintenance of the suit does not offend ‘traditional notions of fair play and substantial justice.’” Id., at 316 (quoting Milliken v. Meyer, 311 U. S. 457, 463 (1940)).

That standard is easily met here. Ford has long had a heavy presence in Minnesota and Montana. It spends billions on national advertising. It has many franchises in both States. Ford dealers in Minnesota and Montana sell and service Ford vehicles, and Ford ships replacement parts to both States. In entertaining these suits, Minnesota and Montana courts have not reached out and grabbed suits in which they “have little legitimate interest.” BristolMyers Squibb Co. v. Superior Court of Cal., San Francisco Cty., 582 U. S. ___, ___ (2017) (slip op., at 6). Their residents, while riding in vehicles purchased within their borders, were killed or injured in accidents on their roads. Can anyone seriously argue that requiring Ford to litigate these cases in Minnesota and Montana would be fundamentally unfair?

Well, Ford makes that argument. It would send the plaintiffs packing to the jurisdictions where the vehicles in question were assembled (Kentucky and Canada), designed (Michigan), or first sold (Washington and North Dakota) or where Ford is incorporated (Delaware) or has its principal place of business (Michigan).

As might have been predicted, the Court unanimously rejects this understanding of “traditional notions of fair play and substantial justice.” And in doing so, we merely follow what we said in World-Wide Volkswagen Corp. v. Woodson, 444 U. S. 286, 297–298 (1980), which was essentially this: If a car manufacturer makes substantial efforts to sell vehicles in States A and B (and other States), and a defect in a vehicle first sold in State A causes injuries in an accident in State B, the manufacturer can be sued in State B. That rule decides these cases.

Ford, however, asks us to adopt an unprecedented rule under which a defendant’s contacts with the forum State must be proven to have been a but-for cause of the tort plaintiff ’s injury. The Court properly rejects that argument, and I agree with the main thrust of the Court’s opinion. My only quibble is with the new gloss that the Court puts on our case law. Several of our opinions have said that a plaintiff ’s claims “‘must arise out of or relate to the defendant’s contacts’ ” with the forum. See ante, at 6 (citing cases). The Court parses this phrase “as though we were dealing with language of a statute,” Reiter v. Sonotone Corp., 442 U. S. 330, 341 (1979), and because this phrase is cast in the disjunctive, the Court recognizes a new category of cases in which personal jurisdiction is permitted: those in which the claims do not “arise out of ” (i.e., are not caused by) the defendant’s contacts but nevertheless sufficiently “relate to” those contacts in some undefined way, ante, at 8–9.

This innovation is unnecessary and, in my view, unwise.

Gorsuch Concurrence

Redo the entire jurisprudence. Go back to what the Constitution says.

Since International Shoe Co. v. Washington, 326 U. S. 310 (1945), this Court’s cases have sought to divide the world of personal jurisdiction in two. A tribunal with “general jurisdiction” may entertain any claim against the defendant. But to trigger this power, a court usually must ensure the defendant is “‘at home’” in the forum State. Daimler AG v. Bauman, 571 U. S. 117, 137 (2014). Meanwhile, “specific jurisdiction” affords a narrower authority. It applies only when the defendant “‘purposefully avails’” itself of the opportunity to do business in the forum State and the suit “‘arise[s] out of or relate[s] to’” the defendant’s contacts with the forum State. Burger King Corp. v. Rudzewicz, 471 U. S. 462, 472, 475 (1985).

While our cases have long admonished lower courts to keep these concepts distinct, some of the old guardrails have begun to look a little battered. Take general jurisdiction. If it made sense to speak of a corporation having one or two “homes” in 1945, it seems almost quaint in 2021 when corporations with global reach often have massive operations spread across multiple States. To cope with these changing economic realities, this Court has begun cautiously expanding the old rule in “‘exceptional case[s].’” BNSF R. Co. v. Tyrrell, 581 U. S. ___, ___ (2017) (slip op., at 10).

Today’s case tests the old boundaries from another direction. Until now, many lower courts have proceeded on the premise that specific jurisdiction requires two things. First, the defendant must “purposefully avail” itself of the chance to do business in a State. Second, the plaintiff ’s suit must “arise out of or relate to” the defendant’s in-state activities. Typically, courts have read this second phrase as a unit requiring at least a but-for causal link between the defendant’s local activities and the plaintiff ’s injuries. E.g., Tamburo v. Dworkin, 601 F. 3d 693, 708–709 (CA7 2010) (collecting cases); see also Burger King, 471 U. S., at 475 (discussing “proximate[] results”). As every first year law student learns, a but-for causation test isn’t the most demanding. At a high level of abstraction, one might say any event in the world would not have happened “but for” events far and long removed.

Now, though, the Court pivots away from this understanding. Focusing on the phrase “arise out of or relate to” that so often appears in our cases, the majority asks us to parse those words “as though we were dealing with language of a statute.” Reiter v. Sonotone Corp., 442 U. S. 330, 341 (1979). In particular, the majority zeros in on the disjunctive conjunction “or,” and proceeds to build its entire opinion around that linguistic feature....

Consider, too, a hypothetical the majority offers in a footnote. The majority imagines a retiree in Maine who starts a one-man business, carving and selling wooden duck decoys. In time, the man sells a defective decoy over the Internet to a purchaser in another State who is injured. See ante, at 13, n. 4. We aren’t told how. (Was the decoy coated in lead paint?) But put that aside. The majority says this hypothetical supplies a useful study in contrast with our cases. On the majority’s telling, Ford’s “continuous” contacts with Montana and Minnesota are enough to establish an “affiliation” with those States; by comparison, the decoy seller’s contacts may be too “isolated” and “sporadic” to entitle an injured buyer to sue in his home State. But if this comparison highlights anything, it is only the litigation sure to follow. For between the poles of “continuous” and “isolated” contacts lie a virtually infinite number of “affiliations” waiting to be explored. And when it comes to that vast terrain, the majority supplies no meaningful guidance about what kind or how much of an “affiliation” will suffice. Nor, once more, does the majority tell us whether its new affiliation test supplants or merely supplements the old causation inquiry...

Recent scholarship, for example, contends Pennoyer’s territorial account of sovereign power is mostly right, but the rules it embodies are not “fixed in constitutional amber”—that is, Congress might be able to change them. Sachs, Pennoyer Was Right, 95 Texas L. Rev. 1249, 1255 (2017). Others suggest that fights over personal jurisdiction would be more sensibly waged under the Full Faith and Credit Clause. Jackson, Full Faith and Credit—The Lawyer’s Clause of the Constitution, 45 Colum. L. Rev. 1, 3 (1945). Whether these theories are right or wrong, they at least seek to answer the right question—what the Constitution as originally understood requires, not what nine judges consider “fair” and “just.” ...

N. Y. L. Rev., at 436–438. In many ways, International Shoe sought to start over. The Court “cast . . . aside” the old concepts of territorial jurisdiction that its own earlier decisions had seemingly twisted in favor of out-of-state corporations. Burnham, 495 U. S., at 618. At the same time, the Court also cast doubt on the idea, once pursued by many state courts, that a company “consents” to suit when it is forced to incorporate or designate an agent for receipt of process in a jurisdiction other than its home State. Ibid.3 In place of nearly everything that had come before, the Court sought to build a new test focused on “‘traditional notions of fair play and substantial justice.’” International Shoe, 326 U. S., at 316 (quoting Milliken v. Meyer, 311 U. S. 457, 463 (1940)).

It was a heady promise. But it is unclear how far it has really taken us. Even today, this Court usually considers corporations “at home” and thus subject to general jurisdiction in only one or two States. All in a world where global conglomerates boast of their many “headquarters.” The Court has issued these restrictive rulings, too, even though individual defendants remain subject to the old “tag” rule, allowing them to be sued on any claim anywhere they can be found. Burnham, 495 U. S., at 610–611.

Nearly 80 years removed from International Shoe, it seems corporations continue to receive special jurisdictional protections in the name of the Constitution. Less clear is why...

. What’s the majority’s real worry anyway—that corporations might lose special protections? The Constitution has always allowed suits against individuals on any issue in any State where they set foot. Supra, at 8–9. Yet the majority seems to recoil at even entertaining the possibility the Constitution might tolerate similar results for “nationwide corporation[s],” whose “business is everywhere.”...

The parties have not pointed to anything in the Constitution’s original meaning or its history that might allow Ford to evade answering the plaintiffs’ claims in Montana or Minnesota courts. No one seriously questions that the company, seeking to do business, entered those jurisdictions through the front door. And I cannot see why, when faced with the process server, it should be allowed to escape out the back. Jackson, 5 N. Y. L. Rev., at 439. The real struggle here isn’t with settling on the right outcome in these cases, but with making sense of our personal jurisdiction jurisprudence and International Shoe’s increasingly doubtful dichotomy. On those scores, I readily admit that I finish these cases with even more questions than I had at the start. Hopefully, future litigants and lower courts will help us face these tangles and sort out a responsible way to address the challenges posed by our changing economy in light of the Constitution’s text and the lessons of history.

Klerman article

"Personal Jurisdiction and Product Liability," DANIEL KLERMAN

This article is the first sustained economic analysis of personal jurisdiction. It argues that plaintiffs should be able to sue where they purchased a product which caused injury. Such a rule allows manufacturers to set prices which take into account the quality of the forum state’s courts. If the courts are biased against out-of-state corporations, have overly generous judges or juries, or apply substantive law which is excessively proconsumer, manufacturers can, through contracts with distributors and retailers, charge a higher price to consumers in that state. This prevents judges and juries from engaging in inter-state redistribution and gives states an incentive to provide efficient substantive rules and adjudicative institutions. In contrast, a rule which required suit in a place more fully under the control of the defendant – such as the place of manufacture or the location of the distributor – would encourage manufacturers to select inefficiently pro-defendant jurisdictions for their activities. Because consumers are unlikely to know where products are manufactured or distributed and are unlikely to be able to evaluate the quality of the law in those states, it is implausible to think that the market will give manufacturers incentives to locate their jurisdiction-triggering activities in states with efficient laws and institutions. This analysis is particularly important, because the Supreme Court has recently deadlocked on personal jurisdiction in product liability cases.

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