Bandemer v. Ford Motor Co., A17-1182

• Court: Supreme Court of Minnesota (US)
• Writing for the Court: MCKEIG, Justice.
• Citation: 931 N.W.2d 744
• Parties: Adam BANDEMER, Respondent, v. FORD MOTOR COMPANY, Appellant, Eric Hanson, et al., Defendants.
• Docket Number: A17-1182
• Decision Date: 31 July 2019

931 N.W.2d 744

Adam BANDEMER, Respondent,
v.
FORD MOTOR COMPANY, Appellant,

Eric Hanson, et al., Defendants.

A17-1182

Supreme Court of Minnesota.

Filed: July 31, 2019

OPINION

MCKEIG, Justice.

Appellant Ford Motor Company (Ford) appeals from a court of appeals decision affirming a district court’s exercise of specific personal jurisdiction over Ford in a products liability case. Central to the litigation is a Ford vehicle that was involved in a car crash in which the passenger was seriously injured and an airbag in the vehicle allegedly failed to deploy. Ford argues that its contacts with Minnesota were not sufficiently connected to the current litigation because the car at issue was designed, manufactured, and sold outside of Minnesota. Because the claims here arise out of or relate to Ford’s contacts with Minnesota, we affirm the court of appeals.

931 N.W.2d 748

FACTS

In January of 2015, Respondent Adam Bandemer, a Minnesota resident, was a passenger in a 1994 Ford Crown Victoria driven on a Minnesota road by defendant Eric Hanson, a Minnesota resident. Hanson rear-ended a Minnesota county snow plow, and the car ended up in a ditch. Minnesota county law enforcement responded to the crash, and Bandemer alleges that he suffered a severe brain injury as a result of the passenger-side airbag not deploying. He was treated for his injuries by Minnesota doctors in Minnesota. Bandemer alleges that the airbag failed to deploy because of a defect, and that the accident was caused by Hanson’s negligence. He filed a complaint in district court alleging products liability, negligence, and breach of warranty claims against Ford and negligence claims against Hanson and his father, who owned the car.

Ford moved to dismiss Bandemer’s claims for lack of personal jurisdiction. See Minn. R. Civ. P. 12.02(b). Ford does not dispute the quantity and quality of its contacts with Minnesota, nor does it dispute the reasonableness of personal jurisdiction under the circumstances. But it argues that, because the Ford car involved in the accident was not designed, manufactured, or originally sold in Minnesota, Ford cannot be subject to personal jurisdiction in Minnesota on this claim.

Ford’s contacts include sales of more than 2,000 1994 Crown Victoria cars—and, more recently, about 200,000 vehicles of all kinds in 2013, 2014, and 2015—to dealerships in Minnesota. Ford’s advertising contacts include direct mail advertisements to Minnesotans and national advertising campaigns that reach the Minnesota market. Ford’s marketing contacts include a 2016 "Ford Experience Tour" in Minnesota, a 1966 Ford Mustang built as a model car for the Minnesota Vikings, a "Ford Driving Skills for Life Free National Teen Driver Training Camp" in Minnesota, and sponsorship of multiple athletic events in Minnesota. Ford also collects data from its dealerships in Minnesota for use in redesigns and repairs. Finally, Ford has employees, certified mechanics, franchises, and real property, as well as an agent for accepting service, in Minnesota.¹

The district court held that the exercise of jurisdiction over Ford was proper, and Ford appealed. The court of appeals, applying our decision in Rilley v. MoneyMutual, LLC , 884 N.W.2d 321 (Minn. 2016), cert. denied , ––– U.S. ––––, 137 S. Ct. 1331, 197 L.Ed.2d 518 (2017), held that the district court did not err in denying Ford’s motion to dismiss for lack of personal jurisdiction because Ford’s marketing contacts with Minnesota "established a ‘substantial connection between the defendant, the forum, and the litigation, such that [it] purposefully availed [itself] of the forum’ " and those contacts "sufficiently relate[ ] to the cause of action ...."

931 N.W.2d 749

Bandemer v. Ford Motor Co. , 913 N.W.2d 710, 715 (Minn. App. 2018) (quoting Rilley , 884 N.W.2d at 332 ). The court of appeals rejected Ford’s arguments that the Supreme Court’s decisions in Walden v. Fiore , 571 U.S. 277, 134 S.Ct. 1115, 188 L.Ed.2d 12 (2014), and Bristol-Myers Squibb Co. v. Superior Court of California , ––– U.S. ––––, 137 S. Ct. 1773, 198 L.Ed.2d 395 (2017), require a more direct connection between and among the defendant, the forum, and the litigation than the standard articulated by this court in Rilley . 913 N.W.2d at 715–16. This appeal followed.

ANALYSIS

"Whether personal jurisdiction exists is a question of law, which we review de novo." Rilley , 884 N.W.2d at 326 (citation omitted) (internal quotation marks omitted). After a defendant challenges a court’s exercise of personal jurisdiction, the plaintiff must make a prima facie showing that personal jurisdiction is proper. Juelich v. Yamazaki Mazak Optonics Corp. , 682 N.W.2d 565, 569–70 (Minn. 2004). When reviewing a motion to dismiss for lack of personal jurisdiction, we accept all of the factual allegations in the complaint and supporting affidavits as true. Rilley , 884 N.W.2d at 326. In a close case, we resolve any doubt in favor of retaining jurisdiction. Hardrives, Inc. v. City of LaCrosse , 307 Minn. 290, 240 N.W.2d 814, 818 (1976).

Minnesota’s long-arm statute prevents personal jurisdiction over a nonresident defendant if it would "violate fairness and substantial justice." Minn. Stat. § 543.19, subd. 1(4)(ii) (2018). We may "simply apply the federal case law" because Minnesota’s long-arm statute "extend[s] the personal jurisdiction of Minnesota courts as far as the Due Process Clause of the federal constitution allows." Valspar Corp. v. Lukken Color Corp. , 495 N.W.2d 408, 410–11 (Minn. 1992). The Due Process Clause of the Fourteenth Amendment limits the ability of a state to exercise its coercive power by asserting jurisdiction over non-resident defendants. Bristol-Myers Squibb Co. , ––– U.S. ––––, 137 S. Ct. at 1779. A state may not exercise personal jurisdiction unless the defendant has "minimum contacts" with the state and maintaining the lawsuit "does not offend traditional notions of fair play and substantial justice." Int'l Shoe Co. v. Washington , 326 U.S. 310, 316, 66 S.Ct. 154, 90 L.Ed. 95 (1945) (citation omitted) (internal quotation marks omitted).

We analyze five factors to determine whether the exercise of personal jurisdiction is consistent with federal due process: " ‘(1) the quantity of contacts with the forum state; (2) the nature and quality of those contacts; (3) the connection of the cause of action with these contacts; (4) the interest of the state providing a forum; and (5) the convenience of the parties.’ " Rilley , 884 N.W.2d at 328 (quoting Juelich , 682 N.W.2d at 570 ). This five-factor test is a means for evaluating the same key principles of personal jurisdiction established by the Supreme Court—reasonableness in light of traditional notions of fair play and substantial justice. See K-V Pharm. Co. v. J. Uriach & CIA, S.A. , 648 F.3d 588, 592 (8th Cir. 2011) ; Dent-Air, Inc. v. Beech Mountain Air Serv., Inc. , 332 N.W.2d 904, 907 (Minn. 1983). The first three factors determine whether Ford has sufficient "minimum contacts" with Minnesota, and the last two factors determine whether jurisdiction is otherwise "reasonable" under concepts of "fair play and substantial justice." Juelich , 682 N.W.2d at 570.

I.

We will first address factors one through three, which determine whether minimum contacts are present. A defendant has sufficient "minimum contacts" to support personal jurisdiction if the defendant "purposefully avails itself" of the privileges,

931 N.W.2d 750

benefits, and protections of the forum state, such that the defendant "should reasonably anticipate being haled into court there." Burger King Corp. v. Rudzewicz , 471 U.S. 462, 474–75, 105 S.Ct. 2174, 85 L.Ed.2d 528 (1985) (quoting Hanson v. Denckla , 357 U.S. 235, 253, 78 S.Ct. 1228, 2 L.Ed.2d 1283 (1958), and World-Wide Volkswagen Corp. v. Woodson , 444 U.S. 286, 297, 100 S.Ct. 559, 62 L.Ed.2d 490 (1980) ). "In determining whether a defendant has sufficient ‘minimum contacts,’ we consider the contacts alleged by the plaintiff in the aggregate and not individually, by looking at the totality of the circumstances." Rilley , 884 N.W.2d at 337. The forum State " ‘does not exceed its powers under the Due Process Clause if it asserts personal jurisdiction over a corporation that delivers its products into the stream of commerce with the expectation that they will be purchased by consumers in the forum State’ and those products subsequently injure forum consumers." Burger King Corp. , 471 U.S. at 473, 105 S.Ct. 2174 (quoting World-Wide Volkswagen Corp. , 444 U.S. at 297–98, 100 S.Ct. 559 ).

The "minimum contacts" inquiry necessary to support specific² personal jurisdiction over the defendant focuses on "the relationship among the defendant, the forum, and the litigation." Walden , 571 U.S. at 284, 134 S.Ct. 1115 (citation omitted) (internal quotation marks omitted). The "defendant’s suit-related conduct must create a substantial connection with the forum State." Id. Physical presence by the defendant in the forum state is not required for specific personal jurisdiction—rather, sufficient minimum contacts may exist when an out-of-state defendant "purposefully direct[s]" activities at the forum state, and the litigation "arise[s] out of or relate[s]" to those activities. Burger King Corp. , 471 U.S. at 472, 105 S.Ct. 2174 (citation omitted) (internal...