When Is “Close” Close Enough? Minnesota Supreme Court to Review Scope of the “Closely Related” Personal Jurisdiction Doctrine

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A pending Minnesota Supreme Court case could reshape when out-of-state businesses can be sued in Minnesota based on contracts they never signed.

The Minnesota Supreme Court’s decision to grant review in Medtronic, Inc. v. Lahn highlights an unsettled issue in personal jurisdiction: How far can courts extend their reach by binding non-signatories to forum selection clauses under the “closely related” doctrine?

At stake is not just the application of the doctrine in a single case, but the broader question of how expansively courts may exercise personal jurisdiction over out-of-state parties.

The Dispute and the Doctrine

The dispute in Lahn arises out of employment agreements between Medtronic, Inc. (“Medtronic”), based in Minnesota, and two of its former employees. The agreements included forum selection clauses requiring disputes to be brought in Minnesota and dictated the employees’ consent to personal jurisdiction in Minnesota courts.

After a competitor, AlphaTec Spine, Inc. (“AlphaTec”), recruited the employees—allegedly with knowledge of the existing agreements—Medtronic filed suit against the employees for breach of contract and against AlphaTec for tortious interference with the employment agreements. AlphaTec, a non-signatory to the agreements, moved to dismiss the interference claims for lack of personal jurisdiction.

The state district court declined to dismiss, applying the “closely related” doctrine to bind AlphaTec to the forum selection clauses in the employment agreements based on its knowledge of the agreements.

The Minnesota Court of Appeals affirmed, concluding that application of the “closely related” doctrine allows Minnesota courts to bind a party to a forum selection clause in an agreement  it did not sign, so long as its connection to the agreement or the dispute makes it foreseeable that it could be sued in the chosen forum. This interpretation extends the traditional personal jurisdiction principles, which generally require a party to have meaningful contacts with the forum itself or to have consented to jurisdiction.

Under the Minnesota Court of Appeals’ reasoning, if a party can reasonably foresee that it may be sued in a forum based on its awareness of a contract between third parties containing a forum selection clause, then that foreseeability suffices to establish personal jurisdiction, even in the absence of other contacts with Minnesota.

The Minnesota Supreme Court recently granted review to determine the scope of the “closely related” doctrine.

An Unsettled and Evolving Standard

The foreseeability-based approach to the “closely related” doctrine applied by Minnesota courts, focusing on whether a non-signatory could reasonably anticipate being brought into the chosen forum, may be broader than the more structured approaches used in other jurisdictions.

Other courts have required closer ties to the agreement before binding a non-signatory to a forum selection clause, such as an ownership relationship, actual involvement in the contract, or a direct benefit from the contract. Some courts have also considered the non-signatory’s connection to the agreement and the contracting parties at the time the contract was formed.

As a result, the “closely related” doctrine lacks clearly defined boundaries, and its application varies depending on the forum. The Minnesota Supreme Court’s review presents an opportunity to clarify how broadly the doctrine should be applied in the state.

Why It Matters

The case highlights the potential for expanding judicial powers beyond the traditional limits of personal jurisdiction. Under Minnesota’s foreseeability-based approach, a business may face litigation in a forum it never selected or directly engaged with, simply because of its involvement with a party that the business knew or should have known was bound by a contract containing a forum selection clause.

At the same time, the case underscores the lack of uniformity in how courts apply the “closely related” doctrine. While some courts have required more concrete connections to justify binding out-of-state non-signatories, Minnesota’s approach may continue to allow for a broader assertion of personal jurisdiction.

The Minnesota Supreme Court’s upcoming decision may either reinforce that broader approach, which creates some uncertainty for businesses that deal with parties tied to Minnesota, or impose clearer limits like those of other jurisdictions, providing greater predictability for litigants.

Practical Implications

While the case arises in the employment context, the underlying jurisdictional issues are far broader and may arise in a variety of commercial contexts.

Businesses should consider potential jurisdictional exposure when:

• Hiring employees who are subject to agreements containing forum selection clauses in other states
• Interacting with counterparties who are bound by contracts with such provisions
• Evaluating litigation risk in multistate business relationships

Awareness of an existing agreement—and its forum selection clause—is relevant to whether a court finds it foreseeable that a non-signatory could be bound to that forum. Minnesota’s current interpretation is not limited to what defendants are aware of but also includes what they reasonably should know; those seeking to shield themselves from liability should also exercise due diligence to discover such agreements, rather than turning a blind eye.

Looking ahead, the Minnesota Supreme Court’s forthcoming decision will help define the scope of the “closely related” doctrine in the state and may influence how courts approach similar issues going forward.

For now, the case serves as a reminder that jurisdictional exposure may extend beyond the contracts a business signs and, in some circumstances, reach parties whose connections to an agreement are deemed sufficiently close. Businesses with multistate operations should monitor the case closely, as the Court’s decision could meaningfully shape how jurisdictional risk is assessed.

This article was co-authored by Stoel Rives summer associate Maya Lorentz.

About the Authors

Andrew Pieper is a partner in Stoel Rives LLP’s Litigation group in Minneapolis, where he represents multinational corporations, small businesses, and individuals in complex commercial litigation and appellate matters. He has secured successful results for his clients in precedential decisions by the Eighth Circuit Court of Appeals, the Minnesota Court of Appeals, and the Minnesota Supreme Court.

Maya Lorentz is a summer associate in Stoel Rives LLP’s Minneapolis office through the Twin Cities Diversity in Practice 1L Clerkship program. She currently attends the University of St. Thomas School of Law.