• August 9, 2019
A red car and one black crash in an accident

A case from the Minnesota Supreme Court last week reminded us that courts are loath to change course, even where that course is a little muddy.

In Bandemer v. Ford Motor Company, Plaintiff Bandemer was in a serious car accident as a passenger in a 1994 Ford Crown Victoria. Bandemer was a Minnesota resident, as was the driver of the Crown Vic. The accident took place in Minnesota, and Bandemer was treated for his injuries by Minnesota doctors in Minnesota. He later sued the driver and Ford, who made the Crown Vic, alleging that his brain injury was caused by a defective air bag in the car.

Ford moved to dismiss Bandemer’s claims for lack of personal jurisdiction, arguing that its contacts with Minnesota were not sufficiently connected to the case since the Crown Vic was designed, manufactured, and originally sold by Ford outside of Minnesota. The car arrived in Minnesota in 2011, seventeen years after its first retail sale in North Dakota, and it was eventually purchased by the driver’s father in Minnesota in 2013.

During the litigation, Bandemer agreed that Ford was not subject to general personal jurisdiction in Minnesota. (Remember that general personal jurisdiction applies when a company is so pervasively active in a state that it is reasonable to hold them accountable in that state for all of their behavior. A company can always be sued in its home state for that reason.) He argued, however, that specific jurisdiction—when a lawsuit’s claims relate to the defendant’s contacts with the forum—was proper, both because the events surrounding the accident itself all took place in Minnesota and because Ford had a number of other contacts with Minnesota. These include the sale of 200,000 vehicles to dealerships in Minnesota over a three-year period; advertising and marketing contacts, including direct mail advertisements, national advertising campaigns, and sponsorship of athletic events in Minnesota; and Ford’s collection of data from its dealerships in Minnesota for use in redesigns and repairs.

Given these contacts, the district court held that the exercise of jurisdiction over Ford was proper. The court of appeals agreed, and so did the Minnesota Supreme Court, with two justices dissenting.

The Court held that a defendant’s contacts with the state need not be the cause of the claim in the underlying case (as Ford argued); rather, those contacts need only “arise out of or be related to” the claim. Writing for the Court, Justice McKeig held that Bandemer’s claims arose out of or related to Ford’s contacts with Minnesota because Ford’s own data collection, marketing, and advertising in Minnesota demonstrated that it delivered its cars into the “stream of commerce” with an intention that Minnesotans purchase those cars. The driver’s father purchased such a car in Minnesota and Bandemer was injured, he claimed, by a design defect in that car.

In so holding, the majority relied on federal law, and in particular, on Bristol-Myers Squibb Co. v. Superior Court of California and Rilley v. MoneyMutual, LLC, a Minnesota case also applying federal law. (A practice note: although procedural matters are typically governed by state law, here’s where the exception proves the rule. Since Minnesota’s long-arm statute extends the personal jurisdiction of Minnesota courts only as far as the federal Constitution’s Due Process Clause will allow, Minnesota’s personal jurisdiction is a federal question governed by federal court cases. Litigators, take note.) In Bristol-Myers, the U.S. Supreme Court held that the California courts did not have jurisdiction over claims by out-of-state plaintiffs against out-of-state defendants, even if the claims of the out-of-state plaintiffs were packaged with claims by California residents in a mass tort action. Unlike in Bristol-Myers, in Bandemer both the car crash and the injury to Bandemer took place in Minnesota. So although the personal jurisdiction test focuses primarily on a defendant’s contacts with the forum, the Court found that a plaintiff’s contacts are nonetheless relevant to the analysis of the connection between the forum and the underlying dispute.

Justice Anderson and Chief Justice Gildea dissented. The dissent would have reversed and remanded the case to be dismissed for lack of jurisdiction because none of Ford’s Minnesota contacts had anything to do with the design and manufacture of the 1994 Crown Vic in which Bandemer was injured.

Bandemer strikes us as an eminently sensible decision in the midst of sparse federal caselaw. We’ve said before that American jurisprudence on specific personal jurisdiction leaves something to be desired, and that’s still the case even after Bristol-Myers. Bristol-Myers deals with the somewhat unusual situation of non-resident plaintiffs suing non-resident defendants, but is silent on the more common question of what specific jurisdiction requires when a resident plaintiff sues a non-resident defendant. In the absence of robust Supreme Court guidance, the Court chose to stay the course and follow its earlier cases (namely Rilley),which required only that a defendant’s contacts with Minnesota arise out of or be related to a plaintiff’s claim. Moreover, it’s only reasonable (as observed at oral argument), that a company of Ford’s size should expect to be sued in a state where it has sold hundreds of thousands of cars.

This looser standard also makes practical sense: if the Court had held that there was not specific jurisdiction over Ford, Bandemer would have had to file two separate cases—one against the driver in Minnesota and another against Ford, presumably in Michigan—relating to the exact same accident. Requiring Bandemer to litigate the same case in two separate forums would work against the just and economic adjudication of disputes and would deprive Minnesota of its interest in resolving a dispute involving its residents that took place in Minnesota. The Court tends to shy away from creating significant practical difficulties in its rulings, and it did so here.

So, the Court stays the course, and Bandemer’s case moves forward. Now, he only needs to prove liability, and causation, and damages. So . . . well, his whole case. Isn’t litigation fun?

Kelly Pierce is a Minneapolis-based lawyer who represents businesses in commercial disputes and advises on business and employment law issues. You can find Kelly at https://piercelawmn.com.

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