The United States Supreme Court’s decision in Daimler A.G. v. Bauman, 571 U.S. __, 134 S.Ct. 746 (2014), has played a significant role this year in cases pending in Delaware and Rhode Island. Most recently, the California Supreme Court has weighed in, changing what we thought we knew about personal jurisdiction, at least in California.
In Daimler, the U.S. Supreme Court held that a court can exercise general jurisdiction (whereby a state court asserts jurisdiction over a defendant on claims unrelated to the defendant’s activities in the forum state) only when the defendant can be said to be “at home” in the forum – the paradigm being the state in which it is incorporated or has its principal place of business. The California Supreme Court has now found a way to turn that decision on its head. It held in Bristol-Meyers Squibb Co. v. Superior Court, 377 P.3d 874 (Cal. 2016) that plaintiffs from outside California whose claims do not arise out of anything involving California can sue a non-California defendant in a California court.
Bristol-Myers argued, pursuant to Daimler, that it was not subject to personal jurisdiction in the California courts for the suits of 592 non-California plaintiffs. First of all, it argued that it was not subject to specific personal jurisdiction because none of the 592 lawsuits by non-California plaintiffs arose out of anything plaintiff or defendant did in California. Moreover, it argued that it was not subject to general personal jurisdiction because it was not “at home” in California, based on the fact that it was neither headquartered nor incorporated in California.
The California Supreme Court agreed that there was no basis for the exercise of general jurisdiction, but instead found that a “new wave” specific jurisdiction existed because Bristol-Myers engaged in “nationwide marketing, promotion and distribution [that] created a substantial nexus between the non-resident plaintiffs’ claims and the company’s contacts in California . . . .” And, according to the Bristol-Meyers court, the more wide-ranging the defendant’s forum contacts, the more readily a “connection” between the defendant’s forum contacts and the claims by the non-resident plaintiffs can be found.
This decision of the California Supreme Court appears to basically moot the Daimler decision and may make any company that does business nationally subject to personal jurisdiction in California. Bristol-Meyers has filed a writ of certiorari with the U.S. Supreme Court, so this decision may have a short shelf life. For the time being, however, companies should be prepared to litigate in California, as the Bristol-Meyers decision is likely to factor into plaintiffs’ decision when choosing a forum in which to litigate.