Trial Magazine

Personal jurisdiction is about the power of a court to make decisions affecting a defendant—and no court has more power to do so than the U.S. Supreme Court. Since it waded into “modern” personal jurisdiction in 1945 with International Shoe Co. v. Washington,¹ the Court has shaped and guided this fundamental area that cuts across every type of litigation. But in 2014, the Court began to drastically alter the personal jurisdiction landscape, swinging the pendulum in defendants’ favor.

Here’s an overview of the Court’s recent decisions, how they impact your cases, and what you need to do to establish personal jurisdiction over the defendants who have harmed your clients.

SCOTUS & Jurisdiction

In the last seven years, the Court has shifted gears on both general and specific jurisdiction.

Daimler AG v. Bauman. In 2014, the Court held that the exercise of general jurisdiction over a corporation is limited to the states where it is “at home”—defined narrowly as the corporation’s principal place of business and state of incorporation.² Daimler AG sounded the death knell for general jurisdiction based on a defendant’s business places, products put into the stream-of-commerce, sales, or other contacts.

BNSF Railway Co. v. Tyrrell. In 2017, the Court held that Montana courts could not exercise general jurisdiction over BNSF because it was not at home in the state under Daimler AG.³ Despite BNSF’s more than 2,000 employees and over 2,000 miles of track in the state and Federal Employers Liability Act⁴ (FELA) precedent granting state courts jurisdiction over any railroad that does business in the state, the Court held that BNSF’s contacts were not so continuous and systematic as to make BNSF at home in Montana. The Court rejected reliance on FELA, stating that general jurisdiction “does not vary with the type of claim asserted or business enterprise sued.”⁵ It also clarified that Daimler AG’s at-home test applies in state court actions.

Walden v. Fiore. In 2014, the Court held that for a court to exercise specific jurisdiction, the defendant’s “suit-related conduct must create a substantial connection” with the forum state. The plaintiff’s contacts with the forum are not determinative—the defendant’s contacts must be with the forum state itself and not just people who reside there.⁶

Bristol-Myers Squibb Co. v. Superior Court of California. Just three years later, the Court issued Bristol-Myers.⁷ A group of plaintiffs—most of whom were not California residents—sued Bristol-Myers in California for injuries from the company’s drug Plavix. The company challenged the court’s exercise of personal jurisdiction over the nonresidents’ claims.⁸

Bristol-Myers engaged in business activities in California, including selling Plavix there. However, it did not develop, manufacturer, or seek approval for the drug in the state, and the nonresident plaintiffs did not allege that they obtained Plavix in California or were injured or treated there. In an 8-1 decision, the Court reversed the California Supreme Court’s finding of specific jurisdiction.⁹

For a finding of specific jurisdiction, the Court held that the suit must arise from the defendant’s contacts with the forum state—and the primary concern must be the burden on the defendant.¹⁰ It rejected California’s “sliding scale” approach, which relaxed the strength of the connection required between the forum contacts and the specific injury based on the defendant’s extensive connections to the forum unrelated to the injury. The majority described this approach as a “loose and spurious form of general jurisdiction.”¹¹

The Bristol-Myers Court twice asserted that it relied on “settled principles” of specific jurisdiction, cited the traditional stream-of-commerce cases, and noted that residents of other states “could probably sue together in their home States.”¹²

More change ahead? In early 2020, the Supreme Court granted certiorari in two consolidated cases, Ford Motor Co. v. Montana Eighth Judicial District Court and Bandemer v. Ford Motor Co., regarding stream-of-commerce jurisdiction in products liability cases in Minnesota and Montana.¹³ At issue is whether a court has specific jurisdiction over a defendant having contacts with the forum state if the contacts did not cause the injuries at issue.¹⁴

The plaintiffs sued Ford, alleging defects in cars manufactured and initially sold outside the forum states led to in-state injuries. Ford has dealerships in the forum states, but the dealerships had nothing to do with the cars in the case.

Under similar facts, other trial courts have dismissed cases pursuant to Bristol-Myers.¹⁵ The Minnesota and Montana courts, however, held that Ford’s contacts were sufficient for specific jurisdiction based on Ford’s intense sales and marketing efforts in the forum states.

On March 25, the Court unanimously made it harder for corporations to stop plaintiffs from suing in their home states for injuries caused by defendants’ products. That Ford did not sell, manufacture, or design the particular car at issue in the forum states did not sway the Court. Rather, the Court rejected Ford’s causal link requirement and emphasized the “or relates to” portion of the test from Bristol-Myers. The Court relied on the fact that Ford zealously advertises and sells cars—and the resale and service of its cars—in the forum states, where the collisions took place.

In addition to rejecting a “but for” causation requirement, the majority’s opinion offers other hopeful signs. It affirmed International Shoe, Worldwide Volkswagen, and their progeny. It reiterated that Bristol-Myers has no impact on plaintiffs injured in the forum state. And it adopted a broad interpretation of “related to” to include an “affiliation between the forum and the underlying controversy.”

Finally, Justice Neil Gorsuch’s concurrence points to potential changes ahead on the personal jurisdiction front. His concurrence explicitly left open the viability of consent-by-registration. And, after surveying pre-International Shoe practice, it challenged the Court’s granting corporations “special jurisdictional protections in the name of the Constitution.”*

Next Steps

How do these rulings impact your cases? Consider the following scenario: An Arizona grocery store chain hired a Minnesota broker to arrange transport of food pallets from Oregon to Arizona.¹⁶ The broker hired a Washington state trucking company to transport the load. While transporting the load, the Washington state tractor-trailer driver drifted from his lane and hit a car coming from the opposite direction on a California highway. The collision killed the car driver.

California’s Collision Investigation Unit determined that the tractor-trailer driver’s fatigue and defective tire caused the collision. The car driver’s family contacts you from Philadelphia about the case. Your experts advise that the tractor-trailer driver was over the federal hours-of-service requirements¹⁷ at the time of the crash, the trucking company had a conditional safety rating,¹⁸ and an Ohio company manufactured the tire.

Where do you file the complaint?¹⁹ You could sue any of the potential parties in their “home” state, but you would end up with cases in multiple states. Filing in California—the crash location—could avoid some, but not all, jurisdiction problems. As you decide where to file, consider where personal jurisdiction can be exercised over each potential defendant: the truck driver, trucking company, broker, shipper, and tire manufacturer.

Truck driver. The driver’s conduct brought the tractor-trailer to California. That conduct gave rise to the crash and should confer specific jurisdiction in the state.

Trucking company. That the trucking company is the employer²⁰ and deemed responsible for the load²¹ should establish specific jurisdiction in California. Besides California and the company’s home state of Washington, could you file in other forums?

Federal motor carrier safety laws require motor carriers to designate an agent for service of process in all 48 contiguous states.²² Before Daimler AG, many courts held that a carrier’s designation of a process agent in the forum state established consent to general jurisdiction.²³

These courts relied on the “broad remedial purpose” of the federal motor carrier safety laws, reasoning that their “obvious purpose . . . is to eliminate potential jurisdictional problems and to provide injured parties with reasonably easy access to the courts, having in mind that the injured party is frequently a resident of some state other than that in which the accident has occurred.”²⁴ Courts were split on whether any company registering to do business in the forum state—under the state’s general business statute²⁵ requiring foreign corporations to register there—established consent to general jurisdiction.²⁶

Daimler AG recognized that a party could consent to personal jurisdiction, but it did not address consent by registration.²⁷ Nevertheless, since Daimler AG, courts in nearly 40 states have held that registering to do business in a state is not consent to general jurisdiction there.²⁸

But suppose you are in one of the few states still finding consent-by-registration under the state’s general business statute.²⁹ In that case, you have an even better argument that designating a process agent also establishes consent to general jurisdiction given the federal motor carrier safety laws’ broad remedial purposes.

Notwithstanding these purposes, besides a single 2015 Ohio district court decision,³⁰ no court post-Daimler AG has held that designating a process agent in the forum state constitutes consent to general jurisdiction. And in January 2020, another judge in that same federal district court held that designation of a service agent does not establish consent to general jurisdiction.³¹ Some think the conflicting opinions among lower state and federal courts make the consent-by-registration issue ripe for Supreme Court resolution.³²

Broker. Brokers hire motor carriers and arrange transport for shippers’ loads.³³ Potential claims against a broker include negligent selection, general negligence, agency, and other vicarious liability claims. Besides the broker’s home state, no forum is fail-proof for personal jurisdiction over brokers. Brokers have even argued that the negligent selection claim did not arise from their contact with the crash location.³⁴

In a line of federal cases decided between Walden and BNSF Railway, courts exercised specific jurisdiction over nonresident brokers in the forum where the crash occurred.³⁵ Each case relies solely on the load confirmation sheet—typically provided to carriers for each load with pickup and drop-off locations and start and end times. Denying the broker’s motion to dismiss, each court relied on the fact that the broker prepared the confirmation sheet, and traversing the forum was one of the only practical routes to fulfill the sheet. The courts reasoned that the “contemplated future consequence” of the broker’s actions was that the truck driver “would haul a load through [the forum state] en route to [the final destination].”³⁶

It didn’t matter that the brokers did not have officers, property, or other contacts with the forum state. This line of cases should survive post-Bristol-Myers because the broker’s conduct—scheduling a load likely to go through the forum where the crash occurred—created the necessary link for specific jurisdiction. Nonetheless, different facts or a court’s narrow view of relevant contacts could jeopardize your forum choice.

Because the federal motor carrier safety laws also require brokers to designate a process agent,³⁷ the conflicting opinions on consent-by-registration described above should apply with equal force to brokers. And if you allege vicarious liability claims against the broker, you could attempt to attribute the agent’s (the driver’s or truck company’s) contacts to the principal (the broker) for jurisdiction purposes. Daimler AG held that a parent-subsidiary relationship by itself is not enough to impute contacts, but “agency relationships . . . may be relevant to the existence of specific jurisdiction.”³⁸

Shipper. If you are in one of the few states still finding consent-by-registration under the state’s general business statute,³⁹ argue general jurisdiction if the shipper is registered there. Otherwise, depending on the shipper’s role, you may succeed based on the line of cases finding specific jurisdiction over the nonresident broker—the contemplated future consequence of the shipper’s actions was that a tractor-trailer would haul a load through the forum state.⁴⁰ Likewise, if you are alleging vicarious liability, the agency relationship may confer specific jurisdiction. Still, either approach could be an uphill battle.

Manufacturer. As with shippers, you may be able to rely on the forum state’s general business statute to establish general jurisdiction over manufacturers, insurance companies, safety consultants, and others. And the company’s case-linked contacts with the forum state—for example, if the defective tire in the scenario was sold initially in California to the truck company—may provide a foundation for specific jurisdiction.

Otherwise, whether a court will exercise specific jurisdiction over manufacturers and other potential parties has been all over the map, especially in cases with stream-of-commerce components.

There may no longer be a single viable forum for all of the potential defendants in the hypothetical scenario. But the forum where the crash occurred—California—is likely the best option to establish personal jurisdiction over the greatest number of the potential defendants.

Other Considerations

Proving case-linked contacts to establish specific jurisdiction often requires jurisdictional discovery. Unfortunately, obtaining this discovery can be difficult: It is exceptionally discretionary, unlikely to be the subject of a legal opinion, and without easily identifiable standards or procedures.

Have a backup plan. When suing multiple defendants (the driver, truck company, broker, shipper, manufacturer, and insurance company), there often is not one forum that is viable for personal jurisdiction over all of the defendants. If there is a chance that a court will dismiss a defendant for lack of personal jurisdiction, strongly consider filing a backup suit in a secure forum (defendant’s home state) before the statute of limitations runs on your client’s claims.

If the statute of limitations expires before the court reaches a jurisdictional decision in your initial case, the backup case will protect your client’s claims. And check whether that forum has a saving statute that preserves lawsuits dismissed for non-merits reasons.⁴¹

Be ready to reestablish jurisdiction at trial. Making a prima facie showing of personal jurisdiction sometimes does not end the battle. Even after denying motions to dismiss, some forums require plaintiffs to establish jurisdiction by a preponderance of the evidence before the close of trial.⁴²

Be alert to defendants’ reassertion of the defense in summary judgment and other motions, proposed pretrial orders, and trial briefs. If defense counsel reasserts the issue, you may need to satisfy the preponderance of the evidence standard before, during, or after trial. However, some courts hold that failure to reassert the issue constitutes a waiver of the objection entirely.⁴³

The outdated ‘distant forum’ argument. The Supreme Court’s severe restriction on general jurisdiction has left many gaps “that have not been bridged by a corresponding expansion of specific jurisdiction.”⁴⁴ Instead, depending on how lower courts apply the Court’s decisions, the opposite has happened with the narrowing of specific jurisdiction.

But the Court’s jurisdiction cases—save for Justice Sonia Sotomayor’s dissents—ignore that traditional concerns about a party having to defend in a distant forum are no longer an issue, especially over the past year. Lawyers litigate nationwide, mostly without leaving their desks. Corporations hire out-of-state litigation counsel, even when they are at home in a forum, and often from a national law firm with offices and attorneys throughout the country.

Most business decisions and transactions, and therefore almost all discovery, moved online years ago and even more so since COVID-19, with email, shared electronic databases, conferencing platforms, and more. Lawyers have been taking depositions via videoconference and attending telephonic status hearings for years. The potential lack of unfairness to or burden on nonresident corporate defendants is no longer valid.

As long as Daimler AG and its progeny remain good law, carefully consider the potential personal jurisdiction pitfalls when creating a litigation plan and evaluating cases.

*Editor’s Note: At the time the article went to print, the Supreme Court had not issued its decision in Ford. To read the decision, visit https://www.supremecourt.gov/opinions/20pdf/19-368_febh.pdf.

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Rena Leizerman is of counsel at The Law Firm for Truck Accident Safety in Toledo, Ohio, and can be reached at rena@truckaccidents.com.

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Notes

1. 326 U.S. 310 (1945).
2. 571 U.S. 117, 139 (2014). In a footnote, the Court stated that “in an exceptional case,” a corporation’s operations in a forum may be so substantial and of such a nature as to render the corporation at home there. Id. at 139 n.19. Successful reliance on the “exceptional case” language is rare.
3. 137 S. Ct. 1549 (2017). Specific jurisdiction did not apply because the plaintiffs did not allege injury from work occurring in or related to Montana.
4. 45 U.S.C. §51 et seq. protects and compensates railroad employees injured on the job.
5. 137 S. Ct. at 1559.
6. 571 U.S. 277 (2014).
7. Robert S. Peck, Constricting Personal Jurisdiction, Trial, Nov. 2017, at 26; Andre M. Mura, Staying on Track After Bristol-Myers, Trial, Apr. 2019, at 18.
8. 137 S. Ct. 1773 (2017).
9. General jurisdiction was not an option because Bristol-Myers is incorporated in Delaware and headquartered in New York.
10. Id. at 1780.
11. Id. at 1781.
12. Id. at 1783. In her dissent, Justice Sonia Sotomayor observed that the majority opinion could prevent the aggregation of claims or parties and deter victims from pursuing their claims. She described the majority’s opinion as a “factbound opinion.” Id. at 1788 n.3 (Sotomayor, J., dissenting). Federal courts have split on whether procedural differences between mass actions and class actions render Bristol-Myers inapplicable to class actions.
13. Ford Motor Co. v. Mont. Eighth Jud. Dist. Ct., 443 P.3d 407 (Mont. 2019); Bandemer v. Ford Motor Co., 931 N.W.2d 744 (Minn. 2019); 140 S. Ct. 917 (2020) (mem.)(consolidated).
14. Reliance on general personal jurisdiction was not an option because Ford is not at home in Minnesota or Montana.
15. See, e.g., Oliver v. Ford Motor Co., 2019 WL 4194372, at *1 (E.D. Mo. Sept. 4, 2019); Gaillet v. Ford Motor Co., 2017 WL 1684639, at *4 (E.D. Mich. May 3, 2017) (collecting cases).
16. For this scenario, assume the listed states are the only “home” for each entity.
17. 49 C.F.R. pt. 395.
18. 49 C.F.R. §385.3. A conditional safety rating means a motor carrier does not have adequate safety management controls in place to ensure compliance with the safety fitness rules, but it is not illegal for the carrier to be on the road. Id.
19. There are many considerations here, including the potential parties and applicable wrongful death and comparative fault statutes, negligent hiring laws, and damages caps. This article focuses solely on the likelihood of defeating personal jurisdiction defenses.
20. See, e.g., 49 C.F.R. §390.5 (definition of “employee” includes “independent contractor”).
21. See, e.g., 49 C.F.R. §376.12 (deems the motor carrier responsible for the load).
22. 49 U.S.C. §13304(a); 49 C.F.R. §366.4.
23. See, e.g., Ocepek v. Corp. Transp., Inc., 950 F. 2d 556 (8th Cir. 1991); Shapiro v. Se. Greyhound Lines, 155 F.2d 135 (6th Cir. 1946).
24. Ocepek, 950 F.2d at 559, 560.
25. All 50 states maintain statutes requiring foreign corporations to register to do business in the state. They typically are part of a state’s general corporation law for foreign corporations. See, e.g., Ariz. Rev. Stat. §10-1507 (2013); Ohio Rev. Code §1703.041, 191 (2009).
26. See Jack B. Harrison, Registration, Fairness, and General Jurisdiction, 95 Neb. L. Rev. 477, 512–16 (2016).
27. Daimler AG, 517 U.S. at 129.
28. See, e.g., Chufen Chen v. Dunkin’ Brands, Inc., 954 F.3d 492 (2d Cir. 2020).
29. Courts in the following states have permitted personal jurisdiction based on registration-by-consent post-Daimler AG: Arkansas, Iowa, Minnesota, New Jersey, New Mexico, New York, Oklahoma, and Pennsylvania. Courts in Puerto Rico have not addressed the issue post-Daimler AG. See, e.g., Spanier v. Am. Pop Corn Co., 2016 WL 1465400 (N.D. Iowa Apr. 14, 2016); Rodriguez v. Ford Motor Co., 458 P.3d 569 (N.M. Ct. App. 2019).
30. Grubb v. Day to Day Logistics, Inc., 2015 WL 4068742 (S.D. Ohio July 2, 2015).
31. Stehle v. Venture Logistics, LLC, 2020 WL 127707 (S.D. Ohio Jan. 10, 2020); accord, e.g., W. Exp., Inc. v. Villanueva, 2017 WL 4785831 (M.D. Tenn. Oct. 24, 2017) (collecting cases).
32. See, e.g., Chris Carey, Note, Explicit Consent-by-Registration: Plaintiffs’ New Hope After the “At Home” Trilogy, 67 U. Kan. L. Rev. 195, 197 n.11 (2018).
33. 49 C.F.R. §371.2.
34. Turner v. Syfan Logistics, Inc., 2016 WL 1559176 (W.D. Va. Apr. 18, 2016).
35. Id.; Vogel v. Morpas, 2017 WL 5187766 (D. Md. Nov. 9, 2017); Brandi v. Belger Cartage Serv., Inc., 842 F. Supp. 1337 (D. Kan. 1994).
36. Turner, 2016 WL 1559176, at *5.
37. 49 U.S.C. §13304(a); 49 C.F.R. §366.
38. Daimler AG, 571 U.S. at 135 n.13.
39. See supra note 29.
40. See supra notes 34–35.
41. See, e.g., Minn. Stat. Ann. §541.18 (West 2021); Ohio Rev. Code. Ann. §2305.19 (West 2020); Or. Rev. Stat. Ann. §12.220 (West 2020).
42. See, e.g., In re DePuy Orthopaedics, Inc., Pinnacle Hip Implant Prod Liab. Litig., 888 F.3d 753, 778 (5th Cir. 2018).
43. See, e.g., Gerber v. Riordan, 649 F.3d 514 (6th Cir. 2011).
44. Charles W. “Rocky” Rhodes & Cassandra Burke Robertson, A New State Registration Act: Legislating a Longer Arm for Personal Jurisdiction, 57 Harv. J. on Legis. 377, 436 (2020)