Often overlooked but essential to every case is one question: can a state exercise jurisdiction, thus make decisions, over a defendant?  This is the question of personal jurisdiction.  For companies doing business in multiple states, increasingly common in a 21st century economy, the determination that a court has jurisdiction to hear a claim against a defendant may be just as important as the merits of a claim.  Problems of jurisdiction over defendants can get cases dismissed and raise questions about the power of a party in one state to go after defendants in states located across the country, and whether rulings by that court can legally be enforced against that defendant.  Issues of jurisdiction are essential to claims under the Telephone Consumer Protection Act (TCPA), as companies make telephone calls all over the country.

In Hood v. American Auto Care, LLC[1], a recent decision out of the 10th Circuit Court of Appeals, the court held that American Auto Care (AAC), a Florida company, making calls to a Vermont phone number, could be sued in Colorado.  How?  The Supreme Court’s expanding view of specific personal jurisdiction.

There are two types of personal jurisdiction: general and specific.[2]  A state court has general personal jurisdiction over claims against defendants who are “essentially at home” within its borders.  Since AAC is a Florida company, both parties agreed this was not at issue in Hood.  Specific personal jurisdiction, actually at issue in Hood, requires an affiliation between the forum state (the state where suit is filed) and the underlying controversy, and is limited specifically to that affiliation and controversy.[3]  But even if one of the two are met, the court’s exercise of jurisdiction must still meet the fairness and justice requirements of the constitution.[4]

A court will determine when specific jurisdiction is properly exercised by analyzing two requirements: (1) the defendant has “purposely directed [its] activities at residents of the forum,” and (2) the suit must “arise out of or relate to those activities.”[5]  But, even if both of these requirements are met, the defendant may still avoid jurisdiction by establishing that to be sued in the forum state would violate “traditional notions of fair play and substantial justice.”[6]  At the end of the day, this is a question about whether it is fair to enforce decisions made by the court over this particular defendant in this specific controversy.

In March of 2021, the U.S. Supreme Court took a more expansive approach to personal jurisdiction.  In Ford Motor Company v. Montana Eighth Judicial District Court[7], the Court held that a defendant could be sued in a state even if there was no causal link between the specific injuries at issue and the “minimum contacts” with the forum state created by the defendant’s activities.  In other words, if a defendant directs activity towards State A, and an injury occurs in State A not because of the activity specifically directed towards State A, but activity related closely enough, the defendant may be sued in State A.  To the Supreme Court, the phrase “arise out of or relate to the defendant’s conduct” extends specific personal jurisdiction beyond causation.

This finally brings us to Hood, applying Ford to the Telephone Consumer Protection Act (TCPA).  In Hood, AAC, a Florida company, directed telephone calls to Mr. Alexander Hood offering to sell an extended warranty on a car he recently purchased. Though Mr. Hood was residing in Colorado, he had recently moved from Vermont, where AAC also directed calls, but retained his Vermont cell phone number and area code.  Moreover, the calls from AAC came from a number with a Vermont area code.  When Mr. Hood brought suit in Colorado for alleged violations of the TCPA, AAC moved to dismiss for lack of personal jurisdiction.  AAC stated that it cannot be sued in Colorado for the alleged injury to Mr. Hood because its calls to Colorado residents at Colorado phone numbers could not support personal jurisdiction in this case, as Mr. Hood alleged.  Instead, there must be a causal connection between their Colorado contacts and the suit (not merely similar contacts), and that subjecting AAC to litigation in Colorado, where it had weak contacts, would violate traditional notions of “fair play and substantial justice.”  Mr. Hood argued that AAC’s calls to Colorado phone numbers, from Colorado phone numbers, purposefully directing telemarketing at Colorado, was sufficient to support personal jurisdiction over AAC in Colorado, and that the area code of the number actually used to contact him was irrelevant.  The trial court agreed with AAC.  However, in light of Ford, the 10th Circuit disagreed and sided with Mr. Hood.

The Court found that, even if the calls to Mr. Hood did not occur due to its marketing activity directed specifically to Colorado, he was still “injured” there because of activity essentially identical, thus closely enough related to the activity AAC directs towards Colorado.  Accordingly, Colorado could exercise jurisdiction over the claims against AAC since AAC was “on notice” that it could be sued in Colorado, even if it didn’t expect its calls to a Vermont phone number to be the vehicle which took them into court.  This, the Court said, was not “unfair” since it is routine for a resident of a forum state, injured in that state by conduct emanating from another state, to bring suit in his home state.

The result might have been different if AAC’s calls to Vermont phone numbers were different than those directed to Colorado phone numbers, but since Mr. Hood alleged the types of solicitation were the same in both states, the Court did not address this question.  So it is open for debate: if AAC had made calls specifically targeted in content, as well as location, to specific states, would that make the activity sufficiently unrelated to have avoided Colorado jurisdiction?  Perhaps one day we will see.

[1] 21 F.5th 1216 (10th Cir. 2021).

[2] Daimler AG v. Bauman, 571 U.S. 117, 126–27, 134 S.Ct. 746 (2014).

[3] Bristol-Myers Squibb Co. v. Superior Ct. of Cal., S.F. Cnty., __ U.S. __, 137 S.Ct. 1773, 1780 (2017).

[4] Int’l. Shoe Co. v. Washington, 326 U.S. 310, 316, 66 S.Ct. 154 (1945).

[5] Burger King Corp. v. Rudzewicz, 471 U.S. 462, 472, 105 S.Ct. 2174 (1985) (internal quotation marks omitted).

[6] Int’l. Shoe Co. v. Washington, 326 U.S. 310, 316, 66 S.Ct. 154 (1945).

[7] 141 S.Ct. 1017 (2021).