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The rules governing specific jurisdiction derive from and reflect two sets of values -- treating defendants fairly and protecting interstate federalism. The United States Supreme Court's decision in International Shoe founded specific jurisdiction on an idea of reciprocity between a defendant and a State: when (but only when) a company exercises the privilege of conducting activities within a state -- thus enjoying the benefits and protection of its laws -- the State may hold the company to account for related misconduct. Later decisions have added that our doctrine similarly provides defendants with fair warning -- knowledge that a particular activity may subject it to the jurisdiction of a foreign sovereign. A defendant can thus structure its primary conduct to lessen or avoid exposure to a given State’s courts.
Ford Motor Company (“Ford”), a global auto company incorporated in Delaware and headquartered in Michigan, was marketing, selling, and servicing its products across the United States and overseas. The company was also encouraging a resale market for its vehicles. In each of these two cases, a state court exercised jurisdiction over Ford in a products-liability suit stemming from a car accident that injured a resident in the State. The first suit alleged that a 1996 Ford Explorer had malfunctioned, killing Markkaya Gullett near her home in Montana. In the second suit, Adam Bandemer claimed that he was injured in a collision on a Minnesota road involving a defective 1994 Crown Victoria. Ford moved to dismiss both suits for lack of personal jurisdiction, arguing that each state court had jurisdiction only if the company’s conduct in the State had given rise to the plaintiff’s claims. According to Ford, the causal link existed, only if the company had designed, manufactured, or sold in the State the particular vehicle involved in the accident; Ford alleged that the plaintiff in each suit could not make such showing. Both States’ supreme courts rejected Ford’s argument, each holding that the company’s activities in the State had the needed connection to the plaintiff’s allegations that a defective Ford caused in-state injury.
Should the claims against Ford be dismissed for lack of personal jurisdiction?
The Court held that the connection between plaintiffs’ product liability claims, arising out of car accidents in each plaintiff’s State, and defendant's activities in the forum States was close enough to support specific jurisdiction even though the cars were manufactured and sold outside the forum States and later resold to plaintiffs, as defendant had advertised, sold, and serviced those car models in both States for many years. According to the Court, the defendant’s demand for an exclusively causal connection test was inconsistent with the Court’s precedents, under which specific jurisdiction attached when a company served a market in the forum State and the product malfunctioned there. In conducting so much business in the forum States, defendant enjoyed the benefit and protection of their laws, which created a reciprocal obligation that the car models it marketed there be safe for their citizens to use. Accordingly, the judgments were affirmed.