As we write this, there is great uncertainty in the country. The intersection of state and federal law is a focus, as is the possibility that one or more of the many recent challenges to how states count votes for the presidential election will end up in the Supreme Court. The tension is palpable, in the knots in our stomachs, the bile rising in our throats, the thump of our carotids, and our obsessive doom-scrolling of “news” on our phones. Some find a hot cup of tea soothing. We cannot offer that to our readers, but we can try to read some tea leaves on a relatively recent Supreme Court argument. Will it help? The margin of error in any predictions we could make would be unacceptably wide. (We know that none of this is actually funny, but awkward humor is a defense mechanism.)
Since the Supreme Court decided Bauman in 2014, we predicted, tracked, and recapped its impact on drug and device litigation, particularly the scourge known as litigation tourism. The contemporaneous decision by the Court in Walden yielded less attention, but we have often viewed Bauman and Walden as a pair, the former defining the new standard for general personal jurisdiction and the latter defining the standard for specific personal jurisdiction. As the lawyers for litigation tourists refused to accept what Bauman meant for their business model, one of their main arguments boiled down to “specific personal jurisdiction for the claims of another plaintiff or group of plaintiffs should make a defendant be subject to general personal jurisdiction for other plaintiffs’ claims.” The Court swatted that down in BMS, citing both Bauman and Walden. Along the way, and since BMS, we have posted on many permutations of the personal jurisdiction issues that affect our drug and device clients. You may be shocked to hear, however, that there is litigation out there that does not involve drug or device manufacturers. Like in Bauman, automobile manufacturers still get sued. And, like in Bauman, the Supreme Court is considering another appeal related to personal jurisdiction, this time on specific jurisdiction.
What follows is our impressions of the October 7, 2020, oral argument in Ford Motor Co. v. Montana Eight Judicial District Court, which is actually a combined appeal of two state court decisions. We have not dug into the briefs or the decisions below and will try to focus on the implications for drug and device cases. We also will not recap all the back-and-forth or comment on how the Court’s composition has changed since October 7. So, keeping things fairly general, there was a case brought against Ford (and, we assume, non-diverse defendants) in Minnesota state court related to an accident with a Ford vehicle originally sold in North Dakota in the mid-1990s and a case brought against Ford (and, we assume, non-diverse defendants) in Montana state court related to an accident with a Ford vehicle originally in Washington. Ford is at home in Michigan, designs its vehicles there, and manufactures them in multiple states but not in Minnesota or Montana. As is often the case in Supreme Court arguments, like in law school classes and exams, the facts were a jumping off point for many hypotheticals. From what we know, Ford contested both general and specific personal jurisdictions in these cases and plaintiffs argued that specific jurisdiction applied largely because Ford conducted activities in each state and the accidents occurred in the states where the plaintiffs lived and chose to sue.
While the decision that comes down may help to clarify the standards for specific personal jurisdiction, the overall message from the oral argument is that personal jurisdiction is a confusing subject. Back when general personal jurisdiction was easy to establish (except perhaps for foreign-based defendants), the concepts were relatively simple and it was not often necessary to analyze specific personal jurisdiction. While we do think some of the confusion rests at the feet of the litigation tourism proponents, we were surprised that the concepts kept blurring the way they did. It is true that the line of specific jurisdiction cases leading to Walden and expounding on Walden is less robust than on the general jurisdiction side, but the concepts seem separable. Applying the concepts to the sort of forum shopping in which drug and device plaintiffs engage, the general jurisdiction inquiry relates to whether the defendant can be subject to suit in California or Missouri, for instance, no matter where the plaintiffs are from, the defendant is at home, or the operative actions of their claims took place. For specific jurisdiction, the decision may be between two states whether plaintiff and the facts of the case have ties, probably with some overlay of the likelihood the case will end up in federal court. With those predicates, a few things struck us from the argument.
First, maybe it owed to a remote format, but there was more interrupting than we recall from other arguments. The Justices are expected to interrupt, of course, but it went both ways.
Second, Justice Thomas asked questions of both sides. Having once gone a decade between posing questions in oral argument, maybe the remote format agrees with him.
Third, there was a surprising amount of discussion of due process almost as to whether there was some doubt that there are constitutional limits on the state exercise of personal jurisdiction. We think of the concept as so ingrained that it is rarely necessary to go back to the starting point to analyze personal jurisdiction. Like recounting the supremacy clause when arguing preemption, however, starting at the start can help an explanation sometimes.
Fourth, after a bunch of hypotheticals on how the defendant’s proposed proximate cause standard for the old Helicopteros phrase that specific personal jurisdiction means the claims “arise out of and relate to” the defendant’s contacts in the forum state, which did not seem to advance the ball much, Justice Gorsuch highlighted the framework:
We’ve made a firm distinction between specific and general jurisdiction for many years. We say specific jurisdiction has to “arise out of.” Everybody seems to know what that means. Nobody knows what “relates to” means, the other part of the test.
Transcript at 28. He then spelled out how the long-arm statutes fit into the process, which seemed to focus the inquiry, at least for a while. There was still conflation of general and specific jurisdictions cases and principles after this.
Fifth, the dueling standards articulated by the parties were something like ships in the night and it was not clear the Court wanted to get aboard either one. The proximate cause standard, with a sort of “but for” causation back-up, from Ford was intended to apply to all specific personal jurisdiction inquiries and, like proximate cause issues in trial courts, how the justices saw the application to every conceivable permutation did not necessarily match up. The plaintiffs offered a narrow two-part test for product liability cases (and maybe cases against manufacturers): “would the defendant be submitting to the coercive power of a state with little interest in the controversy” and would the plaintiff’s claims “really comes within” the defendant’s in-forum contacts. Plaintiff posited that sales of the same type of product into the forum where plaintiff was injured would create personal jurisdiction over the defendant manufacturer, even if the plaintiff’s product was manufactured, designed, and sold elsewhere. That sounds quite a bit like a hybrid between the general and specific standards articulated in prior cases and we read BMS as rejecting blurring the lines.
Sixth, the issue of how the defendant’s actions outside the forum state might give rise to specific personal jurisdiction was less developed. Justice Kavanaugh, in particular, pushed on the issue of purposeful availment by cultivating a market that included the forum. Interestingly, the plaintiffs conceded that non-targeted advertisement—like just having a site on the internet that offered products for sale wherever—would be insufficient to bestow jurisdiction everywhere.
Seventh, litigation tourism has a bad name and the plaintiffs tried to distance themselves from the BMS plaintiffs. That included an express denial of “forum shopping.” By emphasizing that they had sued where their accidents/injuries occurred, these plaintiffs clearly wanted to be seen as different. We wonder whether whatever the Court does here will include some comments that can be used to oppose litigation tourism.
Last, what does this mean for drug and device manufacturers? Clearly, the standard Ford articulated would be better than the standard that plaintiffs articulated. It certainly makes sense that the forum contacts should be alleged to have (proximately) caused the injuries that the plaintiff claims; of course, drug and device plaintiffs tend to allege many cause of action that can involve behavior in multiple places. Plaintiffs offered the criticism that “it would send injured plaintiffs on an irrelevant scavenger hunt to trace the route of the particular pill or toaster that caused injury, just to try to figure out where to sue.” Transcript at 36. It is unclear if a majority will think the burden of such pre-suit diligence is too great to impose.
A number of flaws in the plaintiffs’ proposal were highlighted by questioning from the justices and they would surely plat out in drug and device cases. Focusing on sales of the product into the forum, for instance, could easily slide down a slope into sales of similar products or of components within the plaintiff’s product that were also included in other products. Recent device litigation experience emphasizes how often complaints about a component can create a loud noise without any plausible connection to the claimed injury. Speaking of device litigation, the plaintiffs touted that a number of state attorneys general had supported plaintiffs’ position, which made us think that the AGs want to expand the circumstances under which they can bring cases against out-of-state manufacturers for out-of-state conduct that alleged impacts in-state consumers. We say “impacts” rather than “harms,” because some state consumer protection statutes, which bestow broad powers on AGs and the threat of treble damages, fines, etc., do not require demonstrable injuries to consumers. Clearly, the plaintiffs’ proposal, which does not look at causation or injury, would be better for them. Certainty on these issues for drug and device manufacturers, AGs, and private plaintiffs on the rules governing personal jurisdiction would be appreciated, but may not come as soon as anyone wants. That dynamic sounds familiar.