Marissa S. Ronk, an Associate with Wheeler Trigg O’Donnell LLP*
The Colorado Supreme Court recently granted Ford Motor Co. “extraordinary relief” in overturning a trial court’s finding of general jurisdiction over Ford in Colorado. Magill v. Ford.
In 2013, Plaintiff John Scott Magill was driving a Ford vehicle when he was hit by another Colorado resident. In 2015, Mr. Magill and his wife filed a lawsuit in Colorado against the Colorado driver and Ford to recover for their injuries. Ford moved to dismiss the case for lack of personal jurisdiction. Ford is incorporated in Delaware with its principal place of business in Dearborn, Michigan. The company argued that it is not subject to general jurisdiction in Colorado because it is not “at home” there, as required under the U.S. Supreme Court’s 2014 ruling in Daimler AG v. Bauman. Ford also argued it was not subject to specific jurisdiction in Colorado because the car accident did not arise out of its contacts with Colorado.
The trial court denied Ford’s motion to dismiss, concluding that Ford’s “continuous and systematic affiliations” with Colorado were sufficient to subject Ford to general personal jurisdiction there. In particular, the trial court relied on Ford’s marketing in Colorado and its sales through over thirty dealerships in the state. The trial court also noted that Ford has offices and business in Colorado, has a registered agent in Colorado, and it certifies mechanics to work with Colorado consumers. The trial court did not reach the question of specific jurisdiction, resting wholly on a finding of general jurisdiction.
Ford thereafter petitioned the Colorado Supreme Court under Colorado Appellate Rule 21, an extraordinary remedy available under Colorado law. A Rule 21 petition bypasses the Colorado Court of Appeals and instead asks the Colorado Supreme Court to directly hear the issue. The Colorado Supreme Court typically accepts Rule 21 petitions only to address cases that raise issues of first impression and are of significant public importance. The court accepted the petition to consider, in light of Bauman, the scope of general personal jurisdiction over corporate defendants who do business in Colorado.
The Colorado Supreme Court stayed true to the holding of Bauman, finding that the trial court erred in exercising general personal jurisdiction over Ford. It noted that a nonresident defendant’s contacts with the state will rarely justify exercising general jurisdiction.
In its ruling, the court rebuffed many of the arguments that are frequently made in an effort to distinguish the mandate of Bauman. For example, the court specifically rejected as irrelevant the frequently-made argument that Bauman applied only to international disputes. The court also acknowledged Ford’s significant business contacts with Colorado but found that under Bauman, these contacts were still not enough to make Ford “at home” in Colorado, especially when considered in context of Ford’s business globally. Ultimately, the Colorado Supreme Court concluded that the plaintiffs failed to present any evidence that Ford’s contacts with Colorado are somehow different or more substantial than its contacts with other states. Accordingly, the court concluded that the exercise of general personal jurisdiction was inappropriate. It therefore made the Rule 21 order absolute and remanded the case to an appropriately-venued trial court to reach the question of specific jurisdiction.
The Colorado Supreme Court should be applauded for its fidelity to the law and for refusing to allow the trial court to ignore the clear holding of Bauman. Hopefully Colorado state courts will now realize that deviation from the plain message of Bauman is reversible error, and other appellate courts throughout the country will follow the same judicious path taken by the Colorado Supreme Court.
*Ms. Ronk and partner Theresa Wardon represented Ford Motor Co. in Magill v. Ford, along with Jessica Ellsworth and Sean Marotta of Hogan Lovells.