Personal jurisdiction has always been a thorny and fact-specific topic in civil procedure. But the increasing complexity of transactions – development and manufacture of products across many borders, complicated chains of distribution, and the sale of products or services anywhere over the internet – has made it difficult for due process to keep up with technological and business advances. Courts can exercise jurisdiction over defendants only in locations where constitutional due process protections allow. In January, the 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; Ford Motor Co. v. Bandemer, Case No. 19-369. These cases likely will clarify the limits of specific personal jurisdiction and whether conduct within the forum state needs to be the conduct that caused a plaintiff’s injury. Oral argument originally was set for April 27, 2020, but has been postponed due to COVID-19.

Personal jurisdiction comes in two varieties: general and specific. Courts may assert specific jurisdiction over a defendant only when the defendant’s contacts with the forum relate to the lawsuit. By contrast, courts typically have general jurisdiction over a defendant for any conduct in a venue where the defendant is essentially at home, such as its place of incorporation or headquarters location.[1]

These two cases will be the Court’s first look at specific jurisdiction since its 2017 decision in Bristol-Myers Squibb v. Superior Court (BMS).[2] BMS clarified the due process protections for non-resident defendants under the Fourteenth Amendment. In BMS, the Court held that specific jurisdiction required both that the defendant “purposely avail[] itself with the privilege of conducting activities within the forum State” and that plaintiff’s claims “‘arise out of or relate to’ the defendant’s forum conduct.”[3] A court does not have specific personal jurisdiction over a defendant if the facts of the case do not meet both prongs.

But courts have split over the definition of the second prong. What exactly does “arise out of or relate to” mean? In the two cases now before the Court, appellants seek to clarify that jurisdiction exists only if a defendant’s actual contacts within the forum state caused the alleged injury of the plaintiff. Some recent state court decisions have applied a much looser standard. Below, we look at some of these cases from Montana, Minnesota, and California.

Montana

In the first of the pair of cases accepted by the Court, Montana’s high court found personal jurisdiction over the defendant automaker even though there was no link between the plaintiff’s alleged injuries and any conduct by the defendant in the state of Montana.[4] The automobile accident occurred in Montana, but the vehicle was not designed, manufactured, assembled, or even originally sold in Montana. To satisfy the first prong of the BMS test, the Montana Supreme Court relied on what it calls the “stream-of-commerce plus” theory, citing to the prior U.S. Supreme Court plurality opinion in Asahi Metal Indus. Co. v. Superior Court of Cal.[5], to find purposeful availment because the defendant both introduced the product into the stream of commerce, generally, and also engaged in additional conduct to serve the market in the forum state. The court cited several factors such as advertising in Montana, maintaining a business registration in Montana, and operating subsidiaries in Montana.[6]

And then, in looking at the second prong, the Montana court again used the stream-of-commerce theory to determine that “due process does not require a direct connection”[7] between the defendant’s actions and the injury to satisfy the “arise out of or relate to” requirement. In a conflation of the first and second prongs, the court noted the following: “Therefore, when 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.”[8] The defendant challenges this somewhat redundant conclusion in its appeal.

Minnesota

Just a few months later, the Minnesota Supreme Court also found personal jurisdiction over the same automaker, when again, the vehicle was not designed, manufactured, assembled, or originally sold in Minnesota[9] The Minnesota Supreme Court held that the defendant’s data collection, marketing, and advertising in Minnesota, generally, established specific personal jurisdiction even though none of these activities actually caused the alleged injury in the lawsuit.[10] The court defined the “arise out of or relate to”-prong broadly and noted the defendant’s “actions in targeting Minnesota for sales of passenger vehicles, including the type of vehicle at issues in this case.”[11] Essentially, the court suggested that activities in Minnesota that relate to the same model of vehicle could create jurisdiction even if the actual vehicle involved in the lawsuit had no connection to Minnesota. Observers have noted that the Minnesota decision blurs the line between general jurisdiction and specific jurisdiction. The court focused its holding on the defendant’s contacts with the forum that do not have any relation to the facts of the case, rather than the forum-specific activities that are required to find specific jurisdiction.

California

The California Supreme Court has not yet addressed the definition of “arise out of or relate to” after BMS, but the U.S. Supreme Court’s decision in the Montana and Minnesota cases will likely impact recent intermediate appellate decisions in California. Under pre-BMS case law, California rejected a proximate cause requirement that would have demanded a direct link under the “arise out of or relate” to test. In other words, what level of proximate causation must exist between a defendant’s contacts with the forum state and a plaintiff’s alleged injury for a California court to have specific jurisdiction over the defendant? Two recent decisions from California Courts of Appeal have held that BMS 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 Supreme Court likely will indirectly address the California test in the upcoming cases.

In two reported decisions, the Second and Fourth District Courts of Appeal wrote that even after BMS, plaintiffs may not need to show proximate cause to establish specific jurisdiction. In David L. v. Superior Court,[12] the Fourth District Court of Appeal noted in a footnote that California precedent repudiating a proximate cause requirement between the defendant’s conduct in the state and the plaintiff’s injury may remain viable even after BMS: “Because the court did not address the strength of a causal link required, state precedent repudiating a proximate cause requirement may remain viable…see also Vons, at p. 459, 58 Cal.Rptr.2d 899, 926 P.2d 1085 [rejecting claim that “only an injury caused by the very activity that formed the defendant’s forum contacts would give rise to specific jurisdiction”].)…”[13] The case did not go into more detail regarding this issue, but the Supreme Court’s decision this term likely will get to the heart of the question: whether a defendant’s conduct within the forum state must be the proximate cause of a plaintiff’s injury to establish specific jurisdiction.

In Jayone Foods, Inc. v. Aekyung Industrial Co. Ltd, the Second District Court of Appeal reversed a trial court decision and found that specific jurisdiction existed over the Korean manufacturer of a humidifier cleaning agent because the trial court applied the “arise out of or relate to”-prong too narrowly.[14] The Court of Appeal found personal jurisdiction based on the manufacturer’s sale of the same cleaning agent to a California distributor, generally, rather than the sale of the specific bottles of the cleaning agent that caused the injury at issue in the lawsuit.[15] In effect, the Court of Appeal permitted jurisdiction even though the cleaning agent that the defendant sold to a distributor in California was not the cleaning agent that proximately caused the plaintiff’s alleged injury.

The Jayone Foods court also distinguished the case from BMS in noting that the plaintiffs were California residents whose decedent had purchased, used, and was injured by the product in California: “the claims alleged in this case specifically involve harm in California suffered by a California resident.”[16] Notably, this final determination discussed the plaintiff’s contacts with California rather than the manufacturer’s contacts. But personal jurisdiction and due process hinge on a defendant’s connections with the forum. If the Supreme Court reverses the Montana and Minnesota decisions, the California cases rejecting a proximate cause requirement for finding specific jurisdiction may also no longer be good law

Following Daimler AG v. Bauman in 2014 and BMS in 2017, the Supreme Court will continue this term its string of recent cases clarifying the limits of personal jurisdiction. Personal jurisdiction is vitally important so that defendants have notice and can expect the specific forums where they may be sued.

[1] Daimler AG v. Bauman, 134 S. Ct. 746, 761 (2014).

[2] Bristol-Myers Squibb v. Superior Court, 137 S. Ct. 1773 (2017).

[3] Id. at 1785-86.

[4] Ford Motor Co. v. Montana Eighth Judicial Dist. Ct., 395 Mont. 478 (2019).

[5] Asahi Metal Indus. Co. v. Superior Court of Cal., 480 U.S. 102 (1987).

[6] Ford Motor Co., 395 Mont. at 487-88.

[7] Id. at 490.

[8] Id.

[9] Bandemer v. Ford Motor Co., 931 N.W.2d 744 (Minn. 2019).

[10] Id. at 750-55.

[11] Id. at 750-51.

[12] David L. v. Superior Court, 29 Cal.App.5th 359, (Cal. Ct. App. 2018).

[13] Id. at 374, fn 8 (most internal citations omitted).

[14] Jayone Food, Inc. v. Aekyung Industrial Co., Ltd., 31 Cal.App.5th 543, 558 (Cal. Ct. App. 2019).

[15] Id. at 560.

[16] Id. at 563.