Products Liability Law Daily West Virginia high court directs trial court to properly analyze personal jurisdiction
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Thursday, May 19, 2016

West Virginia high court directs trial court to properly analyze personal jurisdiction

By John W. Scanlan, J.D.

The West Virginia Supreme Court of Appeals was unable to decide whether a court in the state could exercise general or specific personal jurisdiction over Ford Motor Co. because there were insufficient facts in the record due to the trial court’s failure to conduct a proper analysis of the due process requirements for personal jurisdiction, the state high court held in remanding the case for the lower court to conduct the necessary analyses. The court did conclude that Ford had not consented to jurisdiction by appearing in the trial court to file joint stipulation orders regarding discovery before filing its motion to dismiss for lack of personal jurisdiction (State of West Virginia ex rel. Ford Motor Co. v. McGraw, May 18, 2016, Davis, R.).

The estate of a West Virginia resident who was killed in a one-vehicle rollover accident while driving a 2002 Ford Explorer brought suit against Ford Motor Co. and the dealer that sold the car to the shop that sold it to the driver. Ford, which is a Delaware corporation with its principal place of business in Michigan, moved to dismiss for lack of personal jurisdiction. However, before the estate’s response in opposition to the motion was due and prior to the scheduled hearing on the motion, the state trial court denied Ford’s motion to dismiss in a one-paragraph order. Ford asked for an order with findings of fact and conclusions of law so that it could file a writ of prohibition with the state supreme court, and again without a hearing or opportunity for the estate to be heard the trial court issued the requested order. In that order, it explained that Ford was a global corporation, that it had manufactured the vehicle at issue, and that it was the “ultimate absurdity” to suggest that the leading auto manufacturer in the United States did not do business in West Virginia. Granting the motion to dismiss would deprive the estate of its state constitutional rights of access to open courts for injury done to it. Ford then filed for a writ of prohibition to prevent enforcement of the trial court’s orders.

Long-Arm Statutes. Although the trial court’s analysis did not mention either West Virginia’s general long-arm statute or its corporation-specific long-arm statute, the state high court found that the estate sufficiently alleged a prima facie case of jurisdiction under both statutes. The complaint alleged that Ford’s sale and delivery of a defective motor vehicle or its component parts into the West Virginia stream of commerce committed a tortious act; it had manufactured, tested, sold, distributed, assembled, and serviced Ford autos and their parts to or for persons in West Virginia through its distributors, wholesalers, and brokers; caused injuries to the driver by its acts and omissions; engaged in the solicitation of activities in the state to promote the sale, use, maintenance, distribution, assembly, and repair of Ford vehicles in the state, including the vehicle at issue; manufactured, sold, distributed, or assembled Ford vehicles and their parts, including the vehicle at issue, with knowledge or reason to foresee that they would be shipped in interstate commerce and would reach consumers in West Virginia; and transacted business and derived substantial revenues from within the state.

General personal jurisdiction. Because the trial court had not conducted an appropriate analysis of due process and other issues related to general personal jurisdiction, the state supreme court was unable to conduct its own analysis. After considering U.S. Supreme Court precedent from International Shoe toDaimler, the state supreme court held that a court in West Virginia may assert general personal jurisdiction over a nonresident corporate defendant when the corporation’s affiliations with the state are so substantial, continuous, and systematic as to render it essentially at home in West Virginia. However, instead of analyzing the nature and substance of Ford’s operations as required, the trial court instead conducted a “doing business” approach of the type that had evolved prior to International Shoe. It also focused on the relationship that the estate rather than Ford had with West Virginia. The trial court also rendered its decision before the estate had an opportunity to respond to Ford’s arguments, address the affidavits of Ford’s witnesses, submit evidence for the record, or engage in jurisdictional discovery that would have left a record for the supreme court to review. Although the state high court observed that the estate had provided it with numerous facts outside the record supporting its position, these facts needed to be developed at the trial level.

Specific personal jurisdiction. Similarly, the state high court was unable to determine whether the trial court had specific personal jurisdiction over Ford. The court began by surveying U.S. Supreme Court precedent from World-Wide Volkswagen Corp. to Asahi Metal Industry Co. v. Superior Court of California and J. McIntyre Machinery, LTD. v. Nicastro. Following Asahi, the state high court had adopted Justice Brennan’s “stream of commerce” analysis as a method of establishing the “purposeful availment” prong of the specific personal jurisdiction analysis. While Ford urged that the court follow the Fourth Circuit and other courts in abandoning this analysis for the more restrictive “stream of commerce plus” analysis following J. McIntyre, the court declined to overrule its own existing precedents, observing that a number of other state appellate courts also had declined to adopt a stricter test. Turning to the present case, the high court found that the trial court had not addressed any of the three prongs of the specific personal jurisdiction analysis: purposeful availment, the arising out of or related to requirement, or the reasonableness requirement and had not applied the facts of the case to the law.

The case is No. 15-1149.

Attorneys: Bradley N. Garcia (O’Melveny & Myers, LLP) for Ford Motor Co. Patrick E. McFarland (Patrick E. McFarland, PLLC) for Warren R. McGraw.

Companies: Ford Motor Co.

MainStory: TopStory JurisdictionNews MotorVehiclesNews WestVirginiaNews

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