We write regarding a recent decision issued by the Minnesota Supreme Court on a topic that has generated significant motion practice and commentary over the past few years: specific personal jurisdiction.

Key Takeaways:

  • In Bandemer v. Ford Motor Co., the Minnesota Supreme Court upheld the exercise of specific personal jurisdiction over Ford, an out-of-state company, arising out of a Minnesota accident in which a Minnesota driver of a Minnesota-registered Crown Victoria injured a Minnesota resident, even though the car was designed, made, and sold outside the state.
  • The minimum contacts were: national and regional advertising campaigns, direct mailers, sponsored events, in-state employees, in-state data collection regarding its products’ performance, sales of thousands of the relevant model of car to dealerships in the state, and support for local dealerships. These contacts were “related” enough to the accident to support the exercise of personal jurisdiction.
  • While we expect Ford to seek U.S. Supreme Court review of this decision, you should consider its impact to your business and advertising decisions in Minnesota.

Analysis:

On July 31, 2019, the Minnesota Supreme Court decided Bandemer v. Ford Motor Co., holding that Ford could be sued in Minnesota for state-law claims arising out of a car accident that occurred in Minnesota, even though the car was not designed, manufactured, or first sold in Minnesota. In fact, the car—a 1994 Crown Victoria—was not registered in Minnesota until its fourth owner bought it 17 years after it was first sold in another state.

Plaintiff filed suit against Ford in Minnesota state court, alleging that the airbag failed to deploy as a result of a defect. Plaintiff brought products liability, negligence, and breach of warranty claims against Ford. Ford moved to dismiss for lack of personal jurisdiction, and the motion was denied. The Court of Appeals affirmed.

In a 7 to 2 decision, the Minnesota Supreme Court affirmed, holding that the exercise of specific personal jurisdiction over Ford was proper because there is a “substantial connection between the defendant Ford, the forum Minnesota, and the claims brought by [Plaintiff].”

The principal dispute concerned the sufficiency of the connection between the Plaintiff’s claims and Ford’s Minnesota contacts. Relying on recent decisions of the U.S. Supreme Court, including Bristol-Myers Squibb Co. v. Superior Court of California, 137 S. Ct. 1773 (2017), Ford urged the Court to adopt a “causal standard”—that is, specific personal jurisdiction is only proper if the defendant’s contacts with the forum state caused the plaintiff’s claims. Under this standard, Ford argued, Minnesota courts lack personal jurisdiction over Ford because Ford did not design, manufacture, or sell the Crown Victoria in Minnesota.

The Court declined to adopt a causation standard, holding instead that specific personal jurisdiction is proper so long as a plaintiff’s claim is related to the defendant’s forum contacts. The Court rejected Ford’s argument that the U.S. Supreme Court in Bristol-Myers Squibb applied a “new, narrower standard” of causation. Applying the related to standard, the Court found that Ford’s Minnesota contacts—including marketing campaigns directed toward Minnesotans—were sufficiently related to the Plaintiff’s claims.

This decision was issued over a two-Justice dissent. Because none of Ford’s Minnesota contacts such as its sale of other vehicles or its general advertising have anything to do with the design and manufacture of the 1994 Crown Victoria that is the subject of the Plaintiff’s claims, the dissent would have reversed and remanded the case to be dismissed for lack of personal jurisdiction.

We suspect that Ford will seek review of this decision by the U.S. Supreme Court, hoping to capitalize on what it described as the U.S. Supreme Court’s movement toward a “new, narrower standard” for specific personal jurisdiction. We will continue to track and report developments in this case and others related to issues of personal jurisdiction, as we know those developments are meaningful to our clients.

Authors:

            John M. Baker

            Kathryn N. Hibbard

            Faris A. Rashid

            X. Kevin Zhao