August 3, 2017

Specific Personal Jurisdiction and Drugs; Bristol-Myers Squibb Co. v. Superior Court

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Last term, the Court did not limit itself to discussions of general personal jurisdiction; it also discussed specific personal jurisdiction. And in this case, it placed limits on that kind of jurisdiction.

Almost 700 individual plaintiffs filed eight separate complaints in California Superior Court against Bristol-Myers Squibb (BMS), alleging that a BMS drug, Plavix, had injured them. Of these plaintiffs, only 86 were California residents.

BMS was not headquartered in California; did not develop Plavix in California; did not create a marketing strategy for Plavix in California; and did not manufacture, label, package, or work on the regulatory approval of the product in California. It appears that the only tie between Plavix and California is that BMS sold Plavix in California. BMS moved to quash the service of summons on it on the nonresidents’ claims, but the trial court denied that motion. The appeal eventually made its way to the California Supreme Court, which affirmed in a split decision. The Court then granted certiorari.

The Court began by noting that while there are “a variety of interests” controlling whether specific personal jurisdiction is present, the “primary concern is the burden on the defendant.”

Assessing this burden obviously requires a court to consider the practical problems resulting from litigating in the forum, but it also encompasses the more abstract matter of submitting to the coercive power of a State that may have little legitimate interest in the claims in question. As we have put it, restrictions on personal jurisdiction “are more than a guarantee of immunity from inconvenient or distant litigation. They are a consequence of territorial limitations on the power of the respective States.” “[T]he States retain many essential attributes of sovereignty, including, in particular, the sovereign power to try causes in their courts. The sovereignty of each State . . . implie[s] a limitation on the sovereignty of all its sister States.” And at times, this federalism interest may be decisive.

The California Supreme Court used a “sliding scale approach to specific jurisdiction,” which meant that “the more wide ranging the defendant’s forum contacts, the more readily is shown a connection between the forum contacts and the claim.” The Court rejected that approach.

Under the California approach, the strength of the requisite connection between the forum and the specific claims at issue is relaxed if the defendant has extensive forum contacts that are unrelated to those claims. Our cases provide no support for this approach, which resembles a loose and spurious form of general jurisdiction. For specific jurisdiction, a defendant’s general connections with the forum are not enough.

In this case, there was no direct tie between the nonresident plaintiffs and California.

As noted, the nonresidents were not prescribed Plavix in California, did not purchase Plavix in California, did not ingest Plavix in California, and were not injured by Plavix in California. The mere fact that other plaintiffs were prescribed, obtained, and ingested Plavix in California— and allegedly sustained the same injuries as did the nonresidents—does not allow the State to assert specific jurisdiction over the nonresidents’ claims.

The plaintiffs argued that California nevertheless had specific jurisdiction over BMS because BMS contracted with a California company to distribute Plavix nationally. The Court said that this did not benefit the nonresident plaintiffs because

it is not alleged that BMS engaged in relevant acts together with McKesson in California. Nor is it alleged that BMS is derivatively liable for McKesson’s conduct in California. And the nonresidents “have adduced no evidence to show how or by whom the Plavix they took was distributed to the pharmacies that dispensed it to them.” The bare fact that BMS contracted with a California distributor is not enough to establish personal jurisdiction in the State.

Justice Sotomayor was the lone dissenter. She feels that the Court’s recent limits on general and specific jurisdiction are unwise because

[a] core concern in this Court’s personal jurisdiction cases is fairness. And there is nothing unfair about subjecting a massive corporation to suit in a State for a nationwide course of conduct that injures both forum residents and nonresidents alike.

She would hold that BMS “purposefully availed itself” of California and its substantial market, that the nonresident plaintiffs’ claims described conduct that was “materially identical to acts the company took in California,” and that “there is no serious doubt that the exercise of jurisdiction over the nonresidents’ claims is reasonable.”

I fear the consequences of the majority’s decision today will be substantial. Even absent a rigid requirement that a defendant’s in-state conduct must actually cause a plaintiff ’s claim, the upshot of today’s opinion is that plaintiffs cannot join their claims together and sue a defendant in a State in which only some of them have been injured. That rule is likely to have consequences far beyond this case.

First, and most prominently, the Court’s opinion in this case will make it profoundly difficult for plaintiffs who are injured in different States by a defendant’s nationwide course of conduct to sue that defendant in a single, consolidated action. …

Second, the Court’s opinion today may make it impossible to bring certain mass actions at all. After this case, it is difficult to imagine where it might be possible to bring a nationwide mass action against two or more defendants headquartered and incorporated in different States. There will be no State where both defendants are “at home,” and so no State in which the suit can proceed. What about a nationwide mass action brought against a defendant not headquartered or incorporated in the United States? Such a defendant is not “at home” in any State.

Lesson:

If there is no connection between a plaintiff’s claim and a state, then the state will not have specific jurisdiction to hear the plaintiff’s claim, even if the state’s residents raise materially identical claims.