Reversed! Tenth Circuit Holds that There is Jurisdiction in Colorado Over A Florida Company That Made Calls to a Vermont Phone Number

Can calls by a Florida company to a Vermont phone number subject that Florida company to a nationwide class action in Colorado? Yes, according to the Tenth Circuit’s recent decision in Hood v. American Auto Care, LLC, 2021 U.S. App. LEXIS 38400 (10th Cir. Dec. 28, 2021).

Mr. Hood claims he purchased a used car and soon after “began receiving prerecorded calls to his cell phone claiming that his car warranty was about to expire and offering to sell him an extended warranty.” Not interested in the warranty, but annoyed by the calls, Mr. Hood sued the Florida company in Colorado for its (allegedly) illegal calls.

The wrinkle: Mr. Hood’s phone number has a Vermont area code.

Emphasizing that wrinkle, the District Court dismissed for lack of personal jurisdiction. It held that the call to Mr. Hood’s Vermont phone number did not “arise out of, or relate to,” the company’s calls to Colorado. So there was no personal jurisdiction over the Florida company.

Citing the Court’s recent decision in Ford Motor Co. v. Montana Eighth Judicial District Court, 141 S. Ct. 1017 (2021), the Tenth Circuit reversed. Recall that in Ford, the automaker argued that it could not face suit in Montana or Minnesota for defects that killed and maimed in those States because neither vehicle was designed, manufactured, or first sold in the State where the accident occurred. The Court rejected that argument, explaining that specific jurisdiction arises when a defendant “serves a market for a product in the forum State and the product malfunctions there.”

Applying Ford, the Tenth Circuit rejected the Florida company’s argument that personal jurisdiction requires causation—that jurisdiction attaches only if the conduct “gave rise” to the claim. Instead, consistent with the Court’s analysis in Ford, the Tenth Circuit held that a court can exercise personal jurisdiction over an out-of-state defendant that has injured a resident plaintiff if:

(1) the defendant has purposefully directed activity to market a product or service at resident of the forum, and

(2) the plaintiff’s claim arises from essentially the same type of activity, even if the activity that gave rise to the claim was not directed at forum residents.

Applied to Mr. Hood’s lawsuit, “Ford makes clear that specific jurisdiction is proper when a resident is injured by the very type of activity a nonresident directs at residents of the forum State—even if the activity that gave rise to the claim was not itself directed at the forum State.”

This case is a good reminder that specific jurisdiction requires that conduct “arises out of, or relates to” the harm complained of. But that does not mean the plaintiff must prove direct causation to keep the case in his or her chosen forum.