By Ron Park, Friedman | Rubin, PLLP
This article was reposted from the June 2022 issue of Trial News, the monthly newspaper of the Washington State Association for Justice.
Last year, the U.S. Supreme Court decided Ford Motor Co. v. Montana Eighth Judicial District Court,1 a case in which the Court held that an out-of-state car manufacturer (Ford) can be sued in a state where the manufacturer extensively markets, sells, and services its cars, when one of its cars malfunctions and injures a person within that state. This year, in Downing v. Losvar,2 Division III of the Washington Court of Appeals issued the first opinion on personal jurisdiction that interprets and applies Ford in a Washington case.
The jurisdictional facts of Downing are materially identical to the facts in Ford. In Ford, there were two plaintiffs, one a resident in Montana and the other a resident in Minnesota, each of whom was injured in a car accident that happened in their respective states. The vehicles in both incidents were Ford vehicles, and Ford did extensive and substantial business in both Montana and Minnesota by advertising, selling, and servicing its vehicles there. However, neither plaintiff had purchased the vehicles directly from Ford within those states. Ford had sold and delivered the specific vehicles at issue to other customers in other states, and it was only through second-hand transactions that those vehicles ended up in Montana and Minnesota.
In Downing, the plaintiff was a resident of Washington who was injured in a plane crash in Washington. The plane was manufactured by Cessna Aircraft Co. (now Textron Aviation Inc.), and Cessna (now Textron) did extensive and substantial business in Washington by advertising, selling, and servicing its planes there. However, the plane that had crashed had not been purchased directly from Cessna in Washington. Rather, Cessna had sold the plane to a different customer in a different state, and it was only through second-hand transactions that the plane ended up in Washington.
Although Ford concerned cars and Downing concerned planes, the jurisdictional question was the same:
Can a court exercise personal jurisdiction over an out-of-state manufacturer who purposefully and systematically serves the market for its products in a forum state when one of its products malfunctions and injures a forum resident, even though the specific product that malfunctioned was not sold, delivered, or otherwise serviced by the out-of-state manufacturer in the forum state?
In Ford, the U.S. Supreme Court answered, yes. Unsurprisingly, the Washington Court of Appeals answered the same, stating that “Ford Motor Co. v. Montana Eighth Judicial District Court compels our ruling.”3
As simple as this may seem, Ford’s effect on Washington’s personal jurisdiction law is substantial. This is reflected in the Court of Appeals’ 50-page opinion, which reviews the law on personal jurisdiction from the U.S. Supreme Court’s International Shoe decision in 1945 all the way to the present (International Shoe v. State of Washington, 326 U.S. 310 (1945)). The Court of Appeals spends much of its opinion discussing how that law developed in the U.S. Supreme Court and Washington State, and what the Ford decision means for the law of personal jurisdiction in Washington going forward.
“But for” causation no longer necessary for personal jurisdiction
The consequences of the Court of Appeals’ opinion are too many to be covered in a single article. However, the most significant is the court’s rejection of the “but for” test for determining whether a plaintiff’s claims “arise out of or relate to” an out-of-state defendant’s contacts with the forum state.
For those who need a refresher on personal jurisdiction, federal law draws a distinction between “general jurisdiction” on the one hand and “specific jurisdiction” on the other.4 A state can exercise “general jurisdiction” over a defendant only when the defendant is “essentially at home” in the state.5 A corporate defendant is “at home” in its state of incorporation and in the state where it maintains its “principal place of business.”6 In any other state, a court can exercise only “specific jurisdiction” over the out-of-state defendant. For “specific jurisdiction” to apply, the plaintiffs’ claims must “arise out of or relate to” the out-of-state defendant’s contacts with the forum state.7
What it meant for a claim to “arise out of or relate to” a defendant’s forum contacts had been something of an open question before Ford. In 1989, in Shute v. Carnival Cruise Lines, the Washington Supreme Court attempted to bring some clarity to the standard by adopting a “but for” causal test to determine whether a plaintiff’s claims met the “arise out of or relate to” requirement.8 Under a “but for” test, plaintiffs in Washington had to show that their claims against the out-of-state defendant would not have arisen but for that de-fendant’s contacts with Washington State.
Although the Washington Supreme Court appeared to depart from the “but for” test in later opinions,9 it never expressly overruled its holding in Shute. And as long as the U.S. Supreme Court remained silent on whether the “arise out of or relate to” requirement was equivalent to a “but for” causal test, one could plausibly treat the two as the same.
Although simple in theory, the test had the effect of turning disputes over personal jurisdiction into a game where out-of-state defendants would slice and dice their contacts with the forum state in ways that would divorce those contacts from being a “but for” cause of a plaintiff’s claims. For example, a defendant might acknowledge it sells thousands of products in Washington but argue Washington courts have no jurisdiction because the one product that malfunctioned was sold out of state and brought into Washington by an unknown customer. Or a defendant might acknowledge it shipped the defective product into Washington but argue there is no jurisdiction because it only did so at the request of an out-of-state customer, not the Washington resident who was later injured by the defective product. The defendant’s goal in every case was to explain how its activities in Washington, no matter how numerous or substantial, did not cause the plaintiff’s harm. The end result was what Ford argued to the U.S. Supreme Court and what Cessna argued to the Washington Court of Appeals: that state courts are powerless to call an out-of-state manufacturer into court, even when the manufacturer extensively advertises, sells, and services its products within the state, if a strict causal link cannot be shown between those activities and the plaintiff’s injury.
In Ford, the U.S. Supreme Court flatly rejected this argument and in doing so rejected any “but for” causal requirement for personal jurisdiction.10 What the U.S. Supreme Court holds on matters of federal constitutional law is binding on all courts in our country. The Court of Appeals in Downing simply made the application of Ford to Washington law official.
Satisfying the “arise out of or relate to” standard
So now, how does a plaintiff show that their claims “arise out of or relate to” a defendant’s contacts with Washington? Showing a direct causal relationship between the plaintiff’s claims and the defendant’s contacts still satisfies the “arise out of” prong of that standard.11 Downing has not changed that, even as it holds that a direct causal relationship is no longer necessary to establish personal jurisdiction. But plaintiffs who cannot show that direct causal relationship can now establish jurisdiction by satisfying the “relate to” prong of the standard. This can be accomplished by showing “an affiliation between the forum and the underlying controversy, principally, [an] activity or an occurrence that takes place in the forum State and is therefore subject to the State’s regulation.“12
What does that look like? The Supreme Court’s Ford opinion gives some guidance:
In conducting so much business in Montana and Minnesota, Ford “enjoys the benefits and protection of [their] laws”—the enforcement of contracts, the defense of property, the resulting formation of effective markets. … All that assistance to Ford’s in-state business creates reciprocal obligations— most relevant here, that the car models Ford so extensively markets in Montana and Minnesota be safe for their citizens to use there.13
In addition, “[a]n automaker regularly marketing a vehicle in a State . . . has ‘clear notice’ that it will be subject to jurisdiction in the State’s courts when the product malfunctions there (regardless of where it was first sold).” This is why the Supreme Court has used “this exact fact pattern (a resident-plaintiff sues a global car company, extensively serving the state market in a vehicle, for an in-state accident) as an illustration—even a paradigm example—of how specific jurisdiction works.”15
Of course, not every lawsuit is against a global car company. But the Supreme Court’s reasoning is equally applicable in cases against any out-of-state manufacturer that engages in regular and substantial business in Washington. Plaintiffs seeking to establish personal jurisdiction over an out-of-state manufacturer in a products liability case should take care to show the manufacturer’s regular and substantial business to the court. The more extensive and systematic the conduct, the less ground the manufacturer has to claim that it cannot be subject to the jurisdiction of Washington courts.
Looming circuit split
Those who think Ford is going to put the seemingly never-ending battle over personal jurisdiction to rest are likely to be disappointed. As surprising as it may seem, a split is already forming between jurisdictions on the proper interpretation of Ford. Textron has already petitioned the Washington Supreme Court to review the Downing opinion based on non-Washington cases more favorable to its position.
Before our state Court of Appeals decided Downing, the Ninth Circuit considered the meaning of Ford in LNS Enterprises LLC v. Continental Motors, Inc.16 In LNS, the plaintiffs were involved in a plane crash in Arizona involving a Cessna aircraft.17 Like in Downing, Textron was included as a defendant in LNS as the successor company to Cessna. And like in Downing, Textron moved to dismiss for lack of personal jurisdiction arguing that it had not designed, manufactured, sold, or serviced the crashed plane in Arizona.18
Unlike the Court of Appeals in Downing, the Ninth Circuit held that Arizona could not exercise personal jurisdiction over Textron.19 The Ninth Circuit offered a number of reasons for its holding, but perhaps the most significant is its conclusion that Ford applies “only to those circumstances in which the same model of the product at issue was ‘advertised, sold, and serviced’ by the defendant.”20 In other words, the Ninth Circuit interpreted the Supreme Court’s Ford opinion as being about the Ford Crown Victoria and the Ford Explorer, not Ford vehicles generally.
One can already see how this opens the door to the next generation of arguments by out-of-state defendants against personal jurisdiction. Rather than argue about how each of their contacts did not cause the plaintiff’s harm, defendants will now pivot to arguing how each of their contacts relates to a completely different product from the one at issue in the case.
Fortunately, Downing squarely closed off this line of argument in our state courts and specifically rejected the Ninth Circuit’s analysis in LNS.22 The Court of Appeals reasoned that a “kind of product” test would lead to defendants making ever-finer distinctions between their products (not just by model, but by model year or even by color) with no obvious line where the distinctions would end.23
It remains to be seen what comes of the competing interpretations of Ford by our state Court of Appeals and the Ninth Circuit. Perhaps the Washington Supreme Court will weigh in. But for now, at least, plaintiffs can enjoy a broader application of Ford in Washington state courts than in Washington federal courts. For plaintiffs seeking to hold out-of-state defendants accountable in Washington, that is something to celebrate.
Ron Park, EAGLE member, is an associate at Friedman | Rubin PLLP in Seattle. He briefed and argued the appeal on behalf of the Downings.
1 141 S. Ct. 1017 (2021).
2 No. 36298-1-III (Apr. 14, 2022).
3 Downing v. Losvar, No. 36298-1-III, slip op. at 3.
4 See Daimler AG v. Bauman, 571 U.S. 117, 127 (2014).
5 Ford, 141 S. Ct. at 1024.
7 See id. at 1025.
8 113 Wn.2d 763, 772 (1989).
9 See Downing, No. 36298-1-III, slip op. at 45.
10 See Ford, 141 S. Ct. at 1026.
11 See Downing, No. 36298-1-III, slip op. at 42.
12 Ford, 141 S. Ct. at 1025 (quoting Bristol Myers Squibb Co. v. Superior Court of Cal., 137 S. Ct. 1773, 1780 (2017)) (emphasis added); Downing, No. 36298-1-III, slip op. at 40.
13 Ford, 141 S. Ct. at 1029–30 (citation omitted).
14 Id. at 1030 (citing World-Wide Volkswagen Corp. v. Woodson, 444 U.S. 286, 297 (1980)).
15 Id. at 1028 (citation omitted).
16 22 F.4th 852 (9th Cir. 2022).
17 See id. at 856–57.
18 See LNS, 22 F.4th at 857, 864.
19 LNS, 22 F.4th at 856.
21 See Downing, No. 36298-1-III, slip op. at 26–27.
22 Id. at 39.
23 See id. at 27.