Muddling Precedent: California Attempts To Destroy Distinctions Between Personal And General Jurisdiction
The issue here stems from a mass action involving 575 non-California residents (Respondents here) who brought suit in California State court alleging various California State law product liability claims against petitioner Bristol-Myers Squibb (“Bristol-Myers”) based on Respondents’ use of Plavix, a prescription drug manufactured by Bristol-Myers and approved by the Food and Drug Administration (FDA) for use in preventing blood clots. All of Respondents’ claims were based on injuries alleged to have occurred outside California as a result of prescriptions written and filled outside California. Plaintiffs claim no contacts with Bristol-Myers’s activities in California or with California generally. Bristol-Myers is incorporated in Delaware, not California, and its principal place of business is New York. Plavix is manufactured outside of California but gains 1% of its revenue from activities in the state. The mass action also involved several California residents whom there was no controversy over California’s jurisdiction over them.
After a lengthy matriculation through the California court system, ultimately the state’s Supreme Court ruled that specific jurisdiction in this case was created by the activities of the Brystol-Myers being “sufficiently related to [the plaintiffs’] claims to merit personal jurisdiction.” The court stated a “claim need not arise directly from the defendant’s forum contacts in order to be sufficiently related to the contact to warrant the exercise of specific jurisdiction”; it is enough that a claim bears a “substantial connection” to defendant’s forum contacts. The defendant’s activities need not be the but for cause of the injuries to the plaintiff. The scale of the sales and marketing that the defendant engaged in California was similar enough to that which affected the plaintiffs in other states that a direct connection between the harm and in-state contacts was unnecessary when it might otherwise have been. The dissenters on the California Supreme Court criticized the majority for “undermin[ing] [the] essential distinction between specific and general jurisdiction.” Bristol-Myers Squibb Co. v. Superior Court, 1 Cal. 5th 783, 816 (2016) (Werdegar, J., dissenting).
Bristol-Myers Squibb Co. v. Superior Court Of California, No. 16-466 (Supreme Court) (petition stage)
Read the Amicus Brief:
Whether a plaintiff’s claims arise out of or relate to a defendant’s forum activities when there is no causal link between the defendant’s forum contacts and the plaintiff’s claims – that is, where the plaintiff’s claims would be exactly the same even if the defendant had no forum contacts.
When a cause of action does not arise out of a defendant’s case-specific contacts with the forum State, a court may exercise “general jurisdiction” over a corporation if “the continuous corporate operations within a State are so substantial and of such a nature as to justify suit against it on causes of action arising from dealings entirely distinct from those activities.” Goodyear Dunlop Tires Operations, S. A. v. Brown, 564 U.S. 915, 919. “[W]hen a State exercises personal jurisdiction over a defendant in a suit in which plaintiff’s claims “arise out of or relate to” the defendant’s contacts with the forum State, the State is exercising ‘specific jurisdiction’ over the defendant.”Helicopteros Nacionales De Colombia v. Hall, 466 U.S. 408, 414 n.8 (1984). The Supreme Court’s specific jurisdiction jurisprudence after Int’l Shoe Co. v. Washington, 326 U.S. 310 (1945), teaches that the existence or absence of a causal link between defendant’s contacts with the State and plaintiff’s claimed injury is essential in determining whether jurisdiction exists.
ALF’s Amicus Brief:
In an amicus brief the ALF argues that the California Supreme Court’s analysis and holding on specific jurisdiction are fatally flawed. That court ignored the consistent teaching of the Supreme Court on the nature of contacts that can underpin the assertion of specific jurisdiction. The California court identified nothing Bristol-Myers did in the State that gave rise to the claims in their cases. It is irrelevant that claims against another defendant and claims brought by other plaintiffs are subject to California jurisdiction. To establish specific jurisdiction, a plaintiff must identify acts connecting the defendant’s actions in California with the plaintiff’s claims. The ALF asks that the Supreme Court grant certiorari to prevent California from muddling jurisdiction law that otherwise allows companies to avoid availing themselves to a state’s specific jurisdiction unless their in-state activities actually harm the plaintiffs. The consequences of normalizing California’s expansion of specific jurisdiction would practically allow any non-resident to sue using any cause of action available in California against any company engaged in national trade. If California’s approach to specific jurisdiction were adopted by other states this would lead to widespread forum shopping and multiply litigation costs for these large companies that would inevitably be sued in states with the harshest laws against their activities.
On June 19, 2018, the Supreme Court issued a favorable opinion in which it held that California courts lacked specific jurisdiction because such jurisdiction requires a substantial connection between the nonresident plaintiffs’ claims in a “mass-action” suit and the conduct of the defendant in the state where the court is located. Bristol-Myers Squibb Co. v. McNeil-P.P.C., Inc., No. 16–466, slip op. (U.S. June 19, 2017).
Date Originally Posted: March 8, 2017