This GT Report Summarizes Recent Class-Action
Decisions From Across the United States

Highlights from this issue include:

• Supreme Court holds that serving a product market in the forum state is sufficient for specific personal jurisdiction in product liability lawsuits even when the product was not designed, manufactured or sold in that market.

• First Circuit looks to recent Massachusetts decision in upholding order compelling individual arbitration and dismissing putative class action based on an online “clickwrap” agreement.

• Second Circuit holds that a district court can sua sponte decertify a class after class certification, even absent a significant intervening event.

• Third Circuit finds mootness of individual plaintiff’s claim renders class claims moot.

• Fourth Circuit rejects predominance arguments and affirms certification of class asserting breach of contract and unconscionable inducement claims.

• Fifth Circuit rejects conditional certification process in FLSA collective actions, articulating a new standard requiring district courts to make final certification decisions before allowing cases to proceed.

• Fifth Circuit rules that the Daubert standard applies to expert opinions at the class certification stage.

• Sixth Circuit holds that non-expert evidence need not be admissible at the class certification stage.

• Seventh Circuit reverses class certification where the concept of employment based “ambient harassment” is insufficient to satisfy Rule 23 requirements given the class definition.

• Arkansas Supreme Court affirms class certification where public records and objective criteria aid in ascertaining the class.

• Ninth Circuit remands price fixing class action for consideration of evidence that more than a “de minimis” portion of class members was not injured.

• District court in the D.C. Circuit rules that CAFA jurisdiction is improper unless the complaint itself invokes the class action rule or mechanism.

U.S. Supreme Court | First Circuit | Second Circuit | Third Circuit | Fourth Circuit | Fifth Circuit | Sixth Circuit | Seventh Circuit | Eighth Circuit (Arkansas Supreme Court) | Ninth Circuit | Eleventh Circuit | D. C. Circuit

U.S. Supreme Court

Ford Motor Company v. Montana Eighth Judicial District Court, No. 19-368, 592 U.S. ___ (Mar. 25, 2021)

Supreme Court holds that a causal link is not required for in-state plaintiffs to establish specific personal jurisdiction over an out-of-state defendant and that specific jurisdiction can be satisfied if claims “relate to” a defendant’s contacts with the forum state (and need not necessarily “arise out of” those contacts).

The Supreme Court addressed the constitutional requirements for personal jurisdiction in these consolidated cases relating to accidents involving two of Ford’s vehicles, a 1996 Explorer and a 1994 Crown Victoria. The Supreme Courts of Montana and Minnesota previously rejected Ford’s argument that the design, manufacture, and original sale of the product in question outside the state deprived the court of personal jurisdiction in a product liability lawsuit arising out of an accident in the state. Specifically, Ford had argued that the state court could only exercise jurisdiction if the company’s conduct in the state gave rise to the plaintiff’s claims, and that such a causal link could exist only if the company designed, manufactured, or originally sold the car in question in the forum state. Both state courts found that Ford purposefully sought to serve the automobile market in the state – including by encouraging the state’s residents to purchase and drive Ford vehicles – making it immaterial whether Ford designed, manufactured, or originally sold the vehicle in the state. The Supreme Court granted certiorari to determine whether Ford was subject to personal jurisdiction, ultimately finding that it was.

In so holding, the Supreme Court detailed the parameters of specific jurisdiction, as described in prior rulings – that is, that “[i]t covers defendants less intimately connected with a State, but only as to a narrower class of claims”  whereby a defendant’s conduct reflects “purposeful availment” of its contacts in that state and the claims pursued arise out of or relate to those contacts. Under this formulation, the Court rejected Ford’s argument that the “needed link” between its activities in the forum states and plaintiffs’ claims “must be causal in nature,” highlighting how “a strict causal relationship” is not necessary given the “relate to” grounds for specific jurisdiction – such that "serv[ing] a market for a product in the forum [s]tate” is enough. Put differently, that Ford “systematically served a market in Montana and Minnesota for the very vehicles that the plaintiffs allege malfunctioned and injured them in those States” is sufficient, even though these precise vehicles were not sold by Ford in those states.

The Court distinguished its decision from  Bristol-Myers Squibb Co. v. Superior Court, 582 U.S. ___, 137 S. Ct. 1773 (2017), noting that in that case there was no tie to the state (California) and the plaintiffs were not California residents – unlike here, where the plaintiffs were residents of the forum states, used the products at issue in these states (even if they did not buy them directly from Ford in these states), and were allegedly injured in these states, making Minnesota and Montana the “natural” places to file suit.

While the Supreme Court’s decision was unanimous, the concurrences delivered by Justices Alito and Gorsuch (the latter of which was joined by Justice Thomas) took issue with the majority’s suggestion that claims may simply “relate to” contacts in a forum state (and need not “arise out of” them). According to Justice Alito, “[r]ecognizing ‘relate to’ as an independent basis for specific jurisdiction risks needless complications,” including that district courts may have difficulty establishing limits on what satisfies the “related to” test because of its “potentially boundless reach.” Justices Gorsuch and Thomas expressed a similar sentiment, noting that “[w]here this leaves us is far from clear.”

Editors: Robert J. Herrington & Stephen L. Saxl & Co-authors: Aaron Van Nostrand, Kara E. Angeletti, Andrea N. Chidyllo, Gregory Franklin & Brian D. Straw