Saturday, March 27, 2021

Ford Plays Legal Hardball With Accident Victims

            The Supreme Court gave the back of its hand to the Ford Motor Company last week [March 25] by rejecting the company’s six-year legal effort to avoid product-defect suits in state courts in Minnesota and Montana stemming from serious automobile accidents in those states.

            The two accidents occurred a few months apart in 2015, six years ago. One mishap left a Montana woman, Markkaya Jean Gullett, dead after her 1996 Ford Explorer ran off the road because of a tire failure.The other accident left a Minnesota man, Adam Bandemer, with a severe brain injury because the air bag in the 1994 Ford Crown Victoria failed to deploy after Bandemer’s friend rear-ended a snowplow as they were en route to a favorite ice-fishing spot.

The two accidents had one thing in common: plaintiffs quickly filed product liability suits against Ford in their home state courts that blamed the injuries on dangerous defects in the Ford-manufactured vehicles. Ford, a Fortune 500 company incorporated in Delaware and headquartered in Michigan, responded to the suits as though the company was being hauled into court in some remote territory with an unfamiliar and unfriendly legal system. In fact, Ford is well familiar with Minnesota and Montana law since the company advertises in both states and sells thousands of cars in both of the states every year.

            Ford crafted a legal strategy that only a law school graduate could see as sensible. Ford argued all the way to the U.S. Supreme Court that Minnesota and Montana courts had no power to force Ford to trial for injuries to their citizens stemming from accidents within their state boundaries. Ford argued instead that the state courts had no jurisdiction over the company because the vehicles involved in the two accidents had not been designed, manufactured, or sold in those states.

            Under Ford’s theory, Bandemer or Gullettt’s personal representative needed to come to Michigan to try to hold the company accountable for the injuries that the allegedly defective Ford vehicles caused. The lawsuits would have been a heavy lift for the plaintiffs, requiring expensive expert testimony to prove the claimed defect and to prove the defect as the proximate cause of the victims’ injuries.

            Ford has an army of in-house lawyers and outside counsel well familiar with defense of product liability lawsuits. Product liability law is no recent or radical innovation in the United States and actually dates back to the early 20th century. In an opinion by the future Supreme Court justice Benjamin Cardozo in 1916, New York’s highest state court established the principle that a manufacturer can be held liable for injuries resulting from a dangerously defective product that the manufacturer introduces into the stream of commerce.

            The defendant in that case, the Buick Motor Company, tried to escape liability for injuries resulting from a defective wooden wheel on two grounds, both as artificially contrived as Ford’s legal strategy in the present-day cases. Buick disclaimed responsibility for the defective wheels by noting that Buick did not manufacture the wheels but only installed them. In addition, Buick argued that the plaintiff needed to sue the dealer, not the manufacturer.

            A century later, neither of those arguments would hold water in a U.S. court today. But Ford’s team of legal pettifoggers saw an opening in the present-day cases by looking to the somewhat complex rules governing a state court’s jurisdiction over an out-of-state company. An out-of-state company can be subject to a state’s general jurisdiction based on its contacts with the forum state—for example, advertising and sales in the forum state. Under a 1945 Supreme Court precedent, however, “specific jurisdiction” in an individual case requires evidence that the out-of-state company’s activities in the state relate to the events at issue in the litigation.

            Justice Elena Kagan made short shrift of Ford’s arguments in her mostly unanimous opinion for the Court in Ford Motor Co. v. Montana Eighth Judicial District. “Allowing jurisdiction in these cases treats Ford fairly,”  Kagan explained, given Montana’s and Minnesota’s interests in the events. “An automaker regularly marketing a vehicle in a State,” Kagan wrote on behalf of five justices, “has ‘clear notice’ that it will be subject to jurisdiction in the State’s courts when the product malfunctions there.”

Three conservative justicesThomas, Alito, and Gorsuch—agreed with the result but  argued in separate opinions that the five-vote opinion improperly stretched the Court’s prior decisions governing jurisdiction over out-of-state companies.

            Ford had influential allies in making its case. The U.S. Chamber of Commerce, several other business lobbies, and the Trump administration all filed friend-of-the-court briefs urging the Court to rule for Ford. Trial lawyers groups, civil procedure professors, and thirty-nine states weighed in with friend-of-the-court briefs on the other side. The states’ brief warned that Ford’s proposed rule “would undermine principles of fair play and substantial justice.”

            As for justice, the plaintiffs in the two states have been put on hold for six years now, still waiting for their day in court before a jury of their peers in their home states. Ford, which proudly touts its vehicles as “built tough,” ought to pay a price in the marketplace for its callous treatment of the accident victims in these cases.

            So far, however, Ford has escaped widespread attention to the case. The case drew limited news coverage when the justices heard oral arguments in October and only back-page coverage when the Court issued its decision on Thursday. But would-be car buyers might want to keep Ford’s anti-consumer position in these cases in mind when they start shopping.


No comments:

Post a Comment