Those who, like me, graduated law school before 2014 sometimes feel as if they have to forget everything and re-learn personal jurisdiction from scratch. This is because 2014 saw the Supreme Court decide two seminal cases on point: Daimler AG v. Bauman, 571 U.S. 117 (2014), and Walden v. Fiore, 571 U.S. 277 (2014). The Daimler case taught us that “general personal jurisdiction” operates much more narrowly than many of us had thought, and Walden had a similar effect on our understandings of “specific personal jurisdiction.” Since then, the Supreme Court has continued to weigh-in on personal jurisdiction issues, deciding BNSF Railway Co. v. Tyrrell, 137 S. Ct. 1549 (2017), and Bristol-Myers Squibb Co. v. Superior Court of California, San Francisco County, 137 S. Ct. 1773 (2017). How are attorneys and lower court judges supposed to keep up with all of the changes on a topic as fundamental as personal jurisdiction?
A panel presentation at the 2019 AJEI Summit in Washington, D.C. provided insights into recent evolutions in personal jurisdiction. The panel was entitled “Let’s Get Personal: Evolving Approaches to Personal Jurisdiction”; attorney Alex Albright of Alexander Dubose & Jefferson in Austin, Texas (formerly professor at University of Texas Law School) moderated the panel. Panelists included Justice Laurie McKinnon of the Montana Supreme Court; attorney Tom Goldstein of Goldstein & Russell, P.C. in Washington, D.C.; and attorney Neal Katyal of Hogan Lovells in Washington, D.C. (and professor at Georgetown University Law Center). The topic was “personal” for all three panelists. Justice McKinnon dissented from the Montana Supreme Court’s majority opinion in the case that went up to the (United States) Supreme Court as BNSF, and the (United States) Supreme Court’s BNSF decision vindicated her dissent. Mr. Goldstein, for his part, represented the respondents in both Walden and Bristol-Myers, and Mr. Katyal represented the petitioner in Bristol-Myers.
Ms. Albright set the stage for the panel discussion by giving AJEI Summit attendees a brief recap of Supreme Court decisions that explain how we got to where we are today. Under Pennoyer v. Neff, 95 U.S. 714 (1877), the existence of personal jurisdiction largely depended on the defendant’s “presence” in the forum state. Following International Shoe Co. v. Washington, 326 U.S. 310 (1945), the analysis of a defendant’s “presence” for purposes of personal jurisdiction gave way to an analysis focusing on “fairness.” “Fairness” asks not whether the defendant is physically “present” in the forum state, but instead whether she has “minimum contacts” with the forum state.
Ms. Albright explained the basic distinction between “general” and “specific” personal jurisdiction used in analyzing “fairness.” For there to be “general” personal jurisdiction over a defendant, the defendant must have continuous, systematic, and substantial contacts with the forum state. “Specific” personal jurisdiction, in contrast, asks whether the suit arises from or is connected with the defendant’s specific activities in the forum state.
Ms. Albright explained that, starting in the late 1980s, the Supreme Court became largely silent on questions of personal jurisdiction. Then, in 2011, the Supreme Court showed renewed interest in the topic by deciding J. McIntyre Machinery, Ltd. v. Nicastro, 564 U.S. 873 (2011) (on specific personal jurisdiction), and Goodyear Dunlop Tires Operations, S.A. v. Brown, 564 U.S. 915 (2011) (on general personal jurisdiction). The outcomes of Nicastro and Goodyear may not have been controversial, but they laid the groundwork for the sea-change that followed.
General Personal Jurisdiction After Daimler and BNSF
In Daimler, the Supreme Court explained that, when the defendant is a corporation, general personal jurisdiction exists only in fora where the corporation is “at home.” See Daimler, 571 U.S. at 137. Such a “home” is usually found in (1) the corporation’s state of incorporation and (2) the state in which the corporation maintains its principal place of business. Accordingly, the Supreme Court held that Daimler AG, the German parent company of Mercedes entities worldwide, was not “at home” in California for purposes of a lawsuit brought by residents of Argentina concerning torts occurring in Argentina.
In BNSF, the Supreme Court reiterated its Daimler holding. There, non-Montana residents attempted to bring Federal Employees’ Liability Act claims against BNSF in Montana state courts and argued that FELA authorized the exercise of personal jurisdiction. The Supreme Court rejected that argument, see BNSF, 137 S. Ct. at 1557, but the plaintiffs also argued that Montana courts had general personal jurisdiction over BNSF. The argument had some heft: although BNSF was neither incorporated in Montana nor had its principal place of business there, it did have some 2,061 miles of railroad track in Montana and some 2,100 employees in Montana. See id. at 1554. The Supreme Court held, however, that this was not enough to render BNSF “at home” in Montana. See id. at 1559.
Specific Personal Jurisdiction After Walden and Bristol-Myers
In Walden, the Supreme Court held that a federal court in Nevada lacked specific personal jurisdiction over claims that Nevada residents brought against a Georgia police officer. The Nevada residents alleged that the Georgia police officer had seized $97,000 in cash from them at the Atlanta airport, when they were on layover waiting for a flight back to Nevada following a trip to Puerto Rico. See Walden, 571 U.S. at 280. The Supreme Court found no specific personal jurisdiction under these circumstances: “[T]he plaintiff cannot be the only link between the defendant and the forum. Rather, it is the defendant’s conduct that must be the necessary connection with the forum State ….” Id. at 285. In other words, the defendant’s act, in Georgia, of seizing cash from Nevada residents does not give rise to specific personal jurisdiction in Nevada, because the plaintiffs (Nevada residents) provided the sole link to the Nevada forum.
In Bristol-Myers, the Supreme Court reiterated its Walden holding, this time in the context of a mass action that more than 600 plaintiffs filed in California state court against Bristol-Myers over injuries allegedly caused by the drug Plavix. Of the 600-plus plaintiffs, only 86 of them resided in California (and thus had been prescribed, obtained, and ingested the drug Plavix there). See Bristol-Myers, 137 S. Ct. at 1778. Bristol-Myers had neither its place of incorporation nor its principal place of business in California, but it did have five research and laboratory facilities employing 160 people in California; it also employed 250 sales representatives in California. See id. The Supreme Court, however, found specific personal jurisdiction lacking for the non-California residents’ claims. The Supreme Court explained that the connection of the claims to the forum state was “even weaker” than the connection found to be insufficient in Walden. See id. at 1782.
Panel Discussion on Open Questions
The Supreme Court’s decisions in Daimler, Walden, BNSF, and Bristol-Myers do not answer all questions about personal jurisdiction. For example, plaintiffs-side lawyers who wish to bring their clients’ claims in perceived “progressive” jurisdictions like California and Montana continue to look for means to circumvent the Daimler and BNSF holdings—that large corporations are usually subject to general personal jurisdiction only in their states of incorporation and where they have their principal places of business.
On the question of general personal jurisdiction, the Supreme Court in BNSF did not reach the issue of whether BNSF might have consented to general personal jurisdiction in Montana by registering to do business there. See BNSF, 137 S. Ct. at 1559 (declining to consider the argument because the Montana Supreme Court’s decision did not address it). The Montana Supreme Court answered this very question one year later in another FELA case that other out-of-state residents brought against BNSF in Montana. See DeLeon v. BNSF Ry. Co., 426 P.3d 1 (2018). In a unanimous opinion by Justice McKinnon, the court held that interpreting Montana’s business-registration statute in such a way that registration to do business in Montana could automatically equate to consent to general personal jurisdiction there would be inconsistent with the (United States) Supreme Court’s analysis in BNSF, Daimler, and Goodyear. See DeLeon, 426 P.3d at 8-9. The Delaware Supreme Court has held the same as to Delaware’s business-registration statute. See Genuine Parts Co. v. Cepec, 137 A.3d 123, 148 (Del. 2016).
The New Mexico Court of Appeals, however, has interpreted New Mexico’s business-registration statute in the opposite manner from Montana’s and Delaware’s. See Rodriguez v. Ford Motor Co., --- P.3d ----, 2018 WL 6716038, at *11 (N.M. Ct. App. 2018), cert. granted in Case No. S-1-SC 37491 (Apr. 8, 2019). In so doing, the New Mexico court relied on the Supreme Court’s pre-International Shoe (and thus, pre-Daimler) analysis in Pennsylvania Fire Insurance Co. v. Gold Issue Mining & Milling Co., 243 U.S. 93, 95 (1917), which interpreted Missouri’s business-registration statute for insurance companies. See Rodriguez, 2018 WL 6716083, at *5 (adding that “Daimler neither cited Pennsylvania Fire nor addressed its holding.”) Applying Pennsylvania Fire, the Rodriguez court held that the Ford Motor Company had consented to general personal jurisdiction in New Mexico merely by registering to do business there. See id. at *11.
Perhaps the Rodriguez holding is explained, however, in part, by its facts. There, the personal representative of a deceased New Mexico resident’s estate filed a wrongful death action in New Mexico alleging that a Ford pick-up truck was defective. The accident (involving the truck) that killed the New Mexico resident took place in New Mexico, and the decedent had purchased the truck in New Mexico (albeit secondhand from a third party). Ford argued that, because it had neither designed, manufactured, sold, nor serviced the decedent’s truck in New Mexico, specific personal jurisdiction was lacking. See id. at *1. The New Mexico Court of Appeals circumvented Ford’s specific personal jurisdiction argument by instead finding general personal jurisdiction, using New Mexico’s business-registration statute. See id. at *11. The New Mexico Supreme Court has since granted certiorari to say whether this interpretation of the statute is correct.
Interestingly, the Montana Supreme Court, in another unanimous decision by Justice McKinnon, examined a wrongful death case against Ford with underlying facts similar to those in Rodriguez. See Ford Motor Co. v. Montana Eighth Judicial Dist. Ct., 443 P.3d 407 (Mont. 2019). However, unlike the New Mexico court, the Montana court used the lens of specific personal jurisdiction, not general personal jurisdiction, to resolve the question. In Ford Motor, the decedent was a Montana resident who purchased a used Ford SUV in Montana from a third party and later died in an accident in the vehicle in Montana. See id. at 411. Ford argued that there was no personal jurisdiction because the vehicle was assembled in Kentucky and was originally sold (when new) through a Ford dealer in Washington State. See id. Finding specific personal jurisdiction in this case, the Montana Supreme Court applied what it called a “stream of commerce plus” theory. See id. at 415. The court explained that Ford did business in Montana and that its “out-of-state conduct—placing the product in the stream of commerce—technically led to the plaintiff’s in-state use of the product and resulting claim.” Id. Under these facts, the court found it to be “both fair and reasonable to require the company to defend a lawsuit in a state where the product caused injury as long as the company has otherwise purposely availed itself to the privilege of doing business in that state and a nexus exists between the product and the defendant’s in-state activity.” Id.
In short, the Montana court may be signaling that the specific personal jurisdiction analysis, at least in products-liability cases, should not require the court to ask whether a Montana resident purchased her vehicle from a Ford dealer in Montana. Instead, a manufacturer like Ford can “purposely avail itself” to jurisdiction in Montana by maintaining an in-state dealer network for distribution and service, regardless of whether the Montana-resident plaintiff makes use of that network for her specific vehicle.
Following the 2019 AJEI Summit, the (United States) Supreme Court, in January 2020, granted certiorari and will be reviewing both Montana’s Ford Motor decision and a similar decision in Bandemer v. Ford Motor Co., 931 N.W.2d 744 (Minn. 2019), as part of consolidated proceedings in Case Nos. 19-368 and 19-369. (Mr. Katyal submitted Ford’s certiorari petitions in both cases.)
During the AJEI Summit, the panelists did not know the Supreme Court would again be looking at personal jurisdiction issues in the Ford Motor cases, but the panel had other helpful insights to share. Mr. Goldstein observed a general evolution from International Shoe-type questions of “fairness” to questions of “federalism.” For example, in Bristol-Myers, an argument could be made that there is no “unfairness” in adjudicating non-California residents’ claims alongside the claims of a California residents in a single mass action. After all, the nature of the claims against Bristol-Myers arising from plaintiffs’ use of the drug Plavix would not vary by state, at least to the extent that Bristol-Myers used the same marketing campaign and sold the same drug nationwide. But there is also a “federalism” question to be asked when a Tennessee resident opts to join with California residents in a mass action: what business does a California court have adjudicating the claims of the Tennessee resident? Mr. Goldstein explained the Montana court’s Ford Motor decision through the same federalism lens—Montana has an interest in providing a forum (through its in-state courts) for plaintiffs injured in Montana.
The panel mentioned that there were a number of other, still unanswered, questions posed by the evolution of personal jurisdiction. Mr. Goldstein commented that the immediate impact of Daimler meant that courts were no longer putting cases in a “general personal jurisdiction” box to establish personal jurisdiction. But, the way the cases are evolving, courts do not appear to be using a “specific personal jurisdiction” box, either. Instead, courts appear increasingly reluctant to find any type of personal jurisdiction over out-of-state defendants, especially for claims brought by out-of-state plaintiffs. While Bristol-Myers was not a class action case (it was a mass action, with 600-plus named plaintiffs), Mr. Goldstein questioned what Bristol-Myers might mean for the future of nationwide class actions. Perhaps the stricter personal jurisdiction standards are another means of “tort reform,” at least if the goal is to provide a means of eliminating nationwide mass and class actions and to provide a means of resolving cases sooner. The question, though, is whether the defense bar might have “cut off its nose to spite its face” with successes in cases like Daimler and Bristol-Myers. Will the plaintiffs’ bar stop bringing products-liability suits altogether when courts close off the option of a mass action like in Bristol-Myers, or will the plaintiffs’ bar instead adapt, in cases like Bristol-Myers, by filing 50 separate suits in all 50 states?
The panel also posed, but did not answer, the question of how the sea-change in personal-jurisdiction analysis might impact future dockets of appellate courts. Currently, in most states and in the federal system, there is no right to appeal orders denying a defendant’s motion to dismiss premised on a lack of personal jurisdiction. Does the Supreme Court’s personal jurisdiction analysis—and the apparent desire to resolve cases sooner—mean that appellate courts will have to expand their use of interlocutory review? The panel did not have easy answers, but one thing is certain: appellate courts have more to do in working out the implications of the Supreme Court’s holdings in Daimler, Walden, BNSF, and Bristol-Myers, not to mention any additional guidance the Supreme Court may provide following its recent grant of certiorari in the Ford Motor cases.