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U.S. Supreme Court Sets the Stage For Jurisdictional Limitations in Product Liability Matters

Posted in California Courts, Litigation Trends, Missouri Courts, Pharmaceutical and Medical Devices, Products Liability

supreme-court-building-1209701_1280In a groundbreaking decision that follows closely on the heels of its jurisdictional decision in BNSF Railway Co. v. Tyrrell, 581 U.S. __ (May 30, 2017) (“Tyrrell”), the United States Supreme Court held that the California Supreme Court was wrong to let approximately 600 non-California residents join 86 state residents in a pharmaceutical claim against Bristol-Myers in which plaintiffs alleged that it misrepresented the risk of heart attacks and strokes associated with the use of its blood thinner, Plavix. In overturning the decision of the California Court, the Supreme Court premised its holding on the fact that the out-of-state plaintiffs had not shown enough of a connection between their alleged injuries and the company’s activities in California.

 

As previously reported, in an effort to find a way around the restrictions imposed on a court’s exercise of specific personal jurisdiction over a foreign corporation by the U.S. Supreme Court’s Daimler decision,  the California Supreme Court used specific personal jurisdiction as a tool to enlarge the Court’s power to exercise personal jurisdiction over a foreign corporation.  In Bristol-Myers Squibb, the California Supreme Court expressly held that Bristol-Myers Squibb was not subject to general personal jurisdiction in California, as its contacts with the state were not substantial enough to render it “at home” in the jurisdiction. It held, however, that specific personal jurisdiction existed over Bristol-Myers Squibb in California—even for plaintiffs who were not injured in California—based on its “purposeful availment” of the benefits and privileges of the laws of the State of California as a result of its “nationwide marketing, promotion and distribution [that] created a substantial nexus between the non-resident plaintiffs’ claims and the company’s contacts in California . . . .” Bristol-Myers Squibb Co. v. Superior Court, No. S221038, 2016 WL 4506107 (Cal. Aug. 29, 2016).

 

In the Supreme Court’s June 19, 2017 opinion, it reversed the California Supreme Court by a vote of 8-1. It made clear that specific jurisdiction is confined to adjudication of issues deriving from, or connected with, the very controversy that establishes jurisdiction.” If a state has no “legitimate interest” in particular claims, a defendant should not be forced to submit to the coercive power of the state with respect to those claims. Bristol-Myers Squibb Company v. Superior Court of California, San Francisco County, et al., 582 U.S. ___, ____ (2017) (slip op. at 6). The Supreme Court explicitly held that specific jurisdiction requires a connection between the forum and the specific claims at issue. Id. When there is no such connection, specific jurisdiction is lacking regardless of the extent of a defendant’s unconnected activities in the State. Id. at ­­­___ (slip op. at 7).  Applying that requirement, the Court found that California could not exercise specific jurisdiction over Bristol-Myers Squibb with respect to non-residents’ claims because: (1) the non-residents did not claim to have suffered harm in California; and (2) all the conduct giving rise to the non-residents’ claims occurred elsewhere. Further, the fact that other plaintiffs were prescribed, obtained and ingested Plavix in California, and allegedly sustained the same injuries as the non-residents, or that Bristol-Myers Squibb conducted research in California on matters unrelated to Plavix, was irrelevant to specific jurisdiction. Id. at __ (slip op. at 7-9).

 

The Supreme Court’s decision had an immediate impact, as a Missouri state court granted Johnson & Johnson’s motion for a mistrial in a multi-plaintiff talcum powder case based on the Bristol-Myers decision that same day. Johnson & Johnson’s motion focused on the lack of connection between the plaintiffs and the forum state, as well as defendants’ ties to Missouri. This is likely just the beginning when it comes to the impact the Bristol-Myers and BNSF Railway decisions have, particularly in mass tort, multi-plaintiff suits. These decisions certainly limit plaintiffs’ ability to forum shop product liability cases, providing more certainty for corporations as to where a suit may be brought against it, and likely resulting in fewer cases filed in plaintiff-friendly jurisdictions. But, one issue that does appear to be left open by the decision is how much of a connection between a plaintiff’s claim and the forum state is required to permit the assertion of specific jurisdiction. In the instant matter, this issue was not decided because there was no connection at all (Plavix was not manufactured in California, and the non-resident plaintiffs did not purchase, obtain and/or ingest the drug in the state of California). Given the complexities this decision raises for plaintiffs who now may be put in a position to bring separate actions in separate states against separate defendants, this issue is likely to be further litigated, particularly in the mass tort and class action context.