Court: District Court, E.D. Wisconsin; October 10, 2017; Federal District Court
Plaintiffs Dean and Margaret Thomas filed a lawsuit against Ford Motor Company for negligence and strict liability, with Wisconsin Physicians Service Insurance Corporation (WPS) included as an involuntary plaintiff for potential subrogation claims. Ford has moved to dismiss the case on the grounds of lack of personal jurisdiction in Wisconsin under Rule 12(b)(2) of the Federal Rules of Civil Procedure. The Thomases have requested additional time for discovery related to personal jurisdiction; however, the court has denied Ford's dismissal motions and rendered the Thomases' request moot.
The Thomases, residents of Green Bay, Wisconsin, purchased a 2009 Ford Flex, initially bought by Hertz-Rent-A-Car in California from an Oklahoma dealership. The vehicle was titled and serviced in Wisconsin. While traveling in Pennsylvania in October 2015, a deer collision led to a rear-end crash that allegedly caused a malfunction in the passenger seat, resulting in Dean’s quadriplegia.
The court notes that the plaintiff bears the burden of proving personal jurisdiction, which is not excessively burdensome. The determination of jurisdiction can be based on various forms of evidence, with all inferences drawn in favor of the plaintiff. Federal courts must follow the personal jurisdiction rules of the state in which they are located. Under Wisconsin law, a two-step inquiry is required: first, to assess jurisdiction under the long-arm statute, and second, to ensure due process requirements are met. Ford does not contest the applicability of Wisconsin's long-arm statute, so the court must now evaluate whether due process is satisfied.
The Due Process Clause of the Fourteenth Amendment permits a court to assert personal jurisdiction over an out-of-state defendant if the defendant has "minimum contacts" with the forum State, ensuring that the lawsuit does not violate fair play and substantial justice principles. The minimum contacts standard protects defendants from litigation in distant locations and allows for reasonable anticipation of being brought to court in a specific forum. The analysis centers around the defendant's relationship with the forum State and distinguishes between specific and general personal jurisdiction. General jurisdiction applies when a defendant has "continuous and systematic" contacts with the forum, typically demonstrated by being incorporated or having a principal place of business there. Specific jurisdiction arises when a defendant's activities create a substantial connection to the forum, requiring purposeful direction or availment of business privileges in that State, leading to the plaintiff's injury.
The plaintiffs argue that the court has specific personal jurisdiction over Ford based on the stream of commerce theory, which allows jurisdiction when a company delivers products with the expectation they will be purchased in the forum State. However, the Supreme Court has not established a definitive test for determining purposeful availment under this theory. Although the stream of commerce was recognized in prior cases, such as World-Wide Volkswagen, clarity was sought in Asahi Metal Industry Co. v. Superior Court, where the Court found a lack of personal jurisdiction over a Japanese manufacturer in a California case, leading to various tests without a majority consensus on the appropriate standard.
Justice O'Connor, representing a plurality, advocated for the "stream of commerce plus" theory, asserting that merely placing a product into the stream of commerce does not constitute an action directed at a forum State without additional conduct that indicates intent to serve that market. Such conduct can include product design for the forum, advertising, establishing customer communication channels, or using a local distributor. O'Connor clarified that awareness of a product reaching the forum does not equate to purposeful action toward that forum.
In contrast, Justice Brennan, also writing for four justices, argued for a less stringent standard, asserting that a defendant involved in the expected flow of products to retail is subject to jurisdiction if they know their product is marketed in the forum State. Justice Stevens, joined by two justices, contended that there should not be a strict dichotomy between mere awareness and purposeful availment, advocating instead for an evaluation of the product's volume, value, and potential hazards to determine purposeful availment.
The Court later revisited these concepts in J. McIntyre Machinery, where Justice Kennedy reaffirmed O'Connor's "stream of commerce plus" approach, while Justice Breyer concurred but distanced himself from the previous opinions, concluding that a single sale in the forum State, even with awareness, does not suffice for personal jurisdiction. The Seventh Circuit has not firmly settled on a singular approach since J. McIntyre but suggested it would adopt Brennan's interpretation until a definitive ruling emerges. Ultimately, the evidence indicates that plaintiffs meet even O'Connor's stringent criteria for establishing jurisdiction.
Plaintiffs assert that Ford has maintained a continuous presence in Wisconsin since 2003, designating CT Corporation System as its registered agent for service. They argue that Ford's extensive advertising and localized website targeting Wisconsin residents demonstrate purposeful availment of Wisconsin's market, supported by the presence of 122 Ford dealerships in the state. Plaintiffs claim that Ford has benefitted from sales to Wisconsin consumers through both new and certified pre-owned vehicles, establishing a prima facie case for specific jurisdiction.
In response, Ford contends that the court lacks specific jurisdiction over it concerning the Thomases' 2009 Ford Flex, emphasizing the vehicle's design and assembly origins in Michigan and Canada, respectively, and that it was sold to Hertz in Oklahoma. Ford references Supreme Court cases, Bristol-Myers Squibb and Walden, to argue that because it had no involvement in the Flex's subsequent sales or its entry into Wisconsin, Plaintiffs' claims do not arise from Ford's Wisconsin activities. Ford highlights that the Bristol-Myers decision illustrates the necessity for a direct connection between the claims and the forum state for personal jurisdiction to be established. The Supreme Court emphasized that nonresident plaintiffs must demonstrate a link to the forum state, and while they could not sue in California, they were still able to bring their claims in their home states, which Ford argues should apply similarly here.
A police officer, as a deputized DEA agent, searched two passengers at a Georgia airport and seized cash suspected to be connected to drug activities. The passengers filed a lawsuit in Nevada under Bivens v. Six Unknown Federal Narcotics Agents, but the Supreme Court ruled that the officer had insufficient contacts with Nevada since all actions occurred outside the state. The Court emphasized that a defendant's conduct must establish a substantial connection with the forum state for jurisdiction, and the plaintiff cannot solely link the defendant to the forum.
In the current case, the plaintiffs connected their claims to Wisconsin, as the Thomases purchased a Ford vehicle there and utilized the manufacturer's warranty at a local dealership. Despite the accident not occurring in Wisconsin, the state has an interest in the claims due to its residents being affected by Ford's product. The Thomases' various actions—purchasing, registering, and servicing the vehicle in Wisconsin—demonstrated contacts that were not random or fortuitous.
The court noted that the foreseeability for due process does not depend on the product's initial placement in the forum state; rather, it relies on the defendant's connections and activities within that state. Ford's marketing efforts and benefits from Wisconsin consumers justified the court's jurisdiction over Ford, and thus the plaintiffs met the due process requirements. Consequently, Ford's motions to dismiss were denied, and the plaintiffs' request for additional discovery regarding personal jurisdiction was deemed moot. The court instructed the Clerk to schedule further proceedings.
