Products Liability Law Daily Court rules specific personal jurisdiction over Ford in product liability case involving car purchased outside forum
Thursday, August 1, 2019

Court rules specific personal jurisdiction over Ford in product liability case involving car purchased outside forum

By David Yucht, J.D.

The Minnesota high court ruled that there was an adequate connection between the cause of action in this case and Ford’s contacts with Minnesota because the accident under consideration arose out of or was related to Ford’s contacts in Minnesota.

The Minnesota Supreme Court has affirmed an intermediate appellate court’s ruling that specific personal jurisdiction over a motor vehicle manufacturer in a products liability action was proper. The action stemmed from injuries sustained by a passenger in one of the manufacturer’s vehicles when the passenger-side airbag did not deploy in an accident. The manufacturer had established minimum contacts in Minnesota by: selling the vehicle in the state, directing advertising and marketing activities at Minnesota, and collecting data relevant to redesigns and repairs from dealerships in Minnesota. The vehicle’s passenger and driver were Minnesota residents, as well. The Minnesota high court found specific personal jurisdiction, even though the vehicle involved in the accident was designed, manufactured, and first sold by the manufacturer outside of Minnesota. A dissenting opinion was issued in this case asserting that the evidence was insufficient to allow Minnesota to exercise specific personal jurisdiction over the manufacturer in the matter (Bandemer v. Ford Motor Co., July 31, 2019, McKeig, A.).

A Minnesota resident was a passenger in a 1994 Ford Crown Victoria driven on a Minnesota road by another Minnesota resident. The driver rear-ended a snowplow and ended up in a ditch. The passenger allegedly suffered a severe brain injury as a result of the passenger-side airbag not deploying. The car, manufactured by Ford Motor Company, was not designed, manufactured, or originally sold in Minnesota. The passenger filed a complaint in state court alleging products liability, negligence, and breach of warranty claims against Ford. Ford moved to dismiss the complaint for lack of personal jurisdiction. The trial court and an intermediate appellate court both held that the exercise of jurisdiction over Ford was proper, and Ford appealed to the Minnesota Supreme Court. The Minnesota Supreme Court concluded that the courts of Minnesota had specific personal jurisdiction over Ford in this case.

Jurisdiction—minimum contacts. In holding that the quality and quantity of Ford’s contacts with Minnesota were sufficient to support personal jurisdiction, the supreme court noted that Minnesota’s long arm statute extended "the personal jurisdiction of Minnesota courts as far as the Due Process Clause of the federal constitution allows. After examining the relationship among Ford, Minnesota and the litigation, the state high court held that Minnesota’s exercise of specific personal jurisdiction over Ford in this case did not violate due process. A state may not exercise personal jurisdiction unless the defendant has "minimum contacts" with the state and maintaining the lawsuit "does not offend traditional notions of fair play and substantial justice." The high court found that Ford’s contacts in Minnesota included, among other things, sales of more than 2,000 1994 Crown Victoria cars—and, more recently, about 200,000 vehicles of all kinds in 2013, 2014, and 2015—to dealerships in Minnesota. Moreover, Ford’s advertising contacts included direct mail advertisements to Minnesotans and national advertising campaigns that reached the Minnesota market. Ford’s marketing contacts included a 2016 "Ford Experience Tour" in Minnesota. The manufacturer also collected data from its dealerships in Minnesota for use in redesigns and repairs. Finally, Ford had employees, certified mechanics, franchises, and real property, as well as an agent for accepting service, in Minnesota. Ford had sufficient "minimum contacts" to support personal jurisdiction because it "purposefully avail[ed] itself" of the privileges, benefits, and protections of Minnesota, such that Ford "should reasonably anticipate being haled into court there."

Bristol-Myers Squibb opinion. The Minnesota Supreme Court also was convinced that there was an adequate connection between the cause of action in this specific case and Ford’s contacts with Minnesota. The court found that an "arising out of or relating to" standard was applicable in this case, and not a "giving rise to" standard which is applied in some other jurisdictions, in determining whether the forum had a sufficient nexus to this matter. The court opined that the U.S. Supreme Court’s decision in Bristol-Myers Squibb Co. v. Superior Court of California ( ___ U.S. ___, 137 S. Ct. 1773 (2017)) [see Products Liability Law Daily’s June 19, 2017 analysis], did not abolish the "arising out of or relating to" standard applied in Minnesota. The court pointed to High Court’s statement in Bristol-Myers Squibb that "[o]ur settled principles regarding specific jurisdiction control this case," which the Minnesota high court interpreted to mean that the Bristol-Myers Squibb decision did not intend to depart from the "arising out of or relating to" standard previously applied in many cases.

Here, Ford had sold thousands of Crown Victoria cars and hundreds of thousands of other types of cars to dealerships in Minnesota. Because the Crown Victoria was the type of car that the passenger in this case alleged was defective, Ford’s sales to the Minnesota dealerships were connected to the claims at issue here. These claims were about the design of the Crown Victoria and, therefore, they were about more than one specific car, but a model of car that Ford sold in Minnesota. Moreover, the facts of this case weighed in favor of determining that personal jurisdiction comported "with fair play and substantial justice."

Dissenting opinion. Justice G. Barry Anderson authored a dissenting opinion in this matter opining that the record was "entirely insufficient to permit Minnesota to exercise specific personal jurisdiction over Ford in this litigation." All the wrongful conduct alleged against Ford occurred out of state. Moreover, all relevant conduct asserted here took place well before the 1994 Crown Victoria was first registered in Minnesota by a third party not involved in this suit. There was no relationship between Ford’s activities in Minnesota and these claims. Because the due process right belongs to the party being sued, it is Ford’s forum contacts that should matter—not the contacts of the person suing Ford.

The case is No. A17-1182.

Attorneys: Kyle W. Farrar (Farrar & Ball, LLP) for Adam Bandemer. Michael R. Carey (Bowman & Brooke LLP,) for Ford Motor Co.

Companies: Ford Motor Co.

MainStory: TopStory JurisdictionNews MotorVehiclesNews MinnesotaNews

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