JV-GJ

Daimler Trucks North America LLC v. Superior Court, No. B316199 (D2d5 Jul. 7, 2022)

This is basically the state court equivalent of the U.S. Supreme Court’s recent personal jurisdiction decision in Ford Motor Company v. Montana Eighth Judicial District Court, 141 S.Ct. 1017, 1024–1025 (2021). Plaintiff, a Californian, is a truck driver. His truck is made by Daimler. He bought it used, in California. But it was originally sold in Georgia. Plaintiff got into a bad accident in Oklahoma while on a long-haul trip back to California. He sued Daimler, in California, alleging that the truck had a design defect. Daimler moved to quash for lack of personal jurisdiction. The trial court denied the motion, and Daimler took a writ.

Daimler makes two basic points: (1) it didn’t design, manufacture, assemble, or sell the truck in California; and (2) the accident was in Oklahoma.  

The first point is clearly foreclosed by Ford. There, plaintiffs, who bought used Ford vehicles in their home states sued Ford in home state courts after vehicular accidents in those states. Ford argued that those facts didn’t satisfy the second element of the traditional three-step specific personal jurisdiction analysis—that the claim arise out of or relate to the defendant’s in-state contacts—because the plaintiff’s injuries weren’t caused by anything Ford did in their home states. The Court rejected that analysis, finding that Plaintiff’s claims related to Ford’s extensive marketing and sales of its vehicles in the home states, even if those particular vehicles were sold elsewhere. 

But the second point is different. The Ford plaintiffs sued where the accidents happened, which also happened to be their home states. Here, however, the accident happened in Oklahoma, albeit to a Californian. While Ford suggested that an in-state injury could be relevant to the jurisdictional inquiry, it was not an irreducible minimum to find jurisdiction. The Court here finds that it because Plaintiff is Californian, the out-of-state nature of the accident isn’t dispositive. When a Californian is injured by a product that a defendant extensively markets and sells to Californians, that is enough to satisfy the relatedness test, even if the injury occurs elsewhere.

In coming to this conclusion, the court contrasts Bristol-Myers Squibb Co. v. Superior Court, 137 S.Ct. 1773 (2017), where the court found that a defendant’s extensive marketing and sales of drugs in California did not satisfy relatedness when the plaintiffs were out-of-state citizens who were allegedly injured by pharmaceuticals taken in their home states.

Writ denied.

It seems like we’re effectively seeing a third category of personal jurisdiction emerge. Eight years ago, in another case involving Daimler—Daimler AG v. Bauman, 134 S.Ct. 746 (2014)—the Supreme Court did away with the old “systematic and continuous” test for general jurisdiction, replacing it with a test finding general jurisdiction only where the defendant is “at home.” For a corporation, that’s its headquarters and place of incorporation. So just doing a lot of business in a state is not enough, without more, to make a company subject to jurisdiction there. And Bristol-Myers Squibb declined to blow a hole in that rule by finding, at least for out of state plaintiffs, that lots and lots of in-state business was enough to justify a “sliding-scale” rule where a flimsy standard for relatedness would suffice.

But limiting general jurisdiction causes some problems. Because, under a more stringent test for relatedness in specific-jurisdiction, it means that arbitrary factual distinctions (like the fact that an allegedly defective truck was bought used, in California, from someone who originally bought it in Georgia) could lead to plaintiffs being unable to sue in the courts of their home states, even when the defendant moves lots of the same product in the plaintiff’s home state.

So there is this class of cases where there are (1) home-state plaintiffs; (2) defendants who would have satisfied the pre-Daimler “systematic and continuous” test; and (3) where the instrumentality that hurt the plaintiff is marketed and sold to others in the jurisdiction where the defendant lives. In these cases, we are getting to a kind of junior-varsity general jurisdiction, where “relatedness” requires only that the three elements exist. 

And maybe that’s fine. Jurisdiction feels fair in Ford and here. If companies elect to extensively avail themselves of a state’s markets, state courts should get to vindicate their citizens’ injuries connected with those products, even if the relatedness line is only conceptual, not causal. On the other hand, the plaintiffs in Bristol-Myers—non-Californians suing for injuries allegedly due to taking Plavix outside of California—were pretty obviously engaged in forum shopping, so holding them to a higher relatedness standard makes sense. I'm just not sure this is a rule.