The Supreme Court addressed the scope of so-called “specific personal jurisdiction,” on Monday, as applied to major corporations, strengthening defendants’ potential arguments at the motion to dismiss stage. Bristol-Myers Squibb v. Superior Court of California, No. 16-466, 2017 WL 2621322 (U.S. June 19, 2017).

Plaintiffs brought a products liability action in California state court against Bristol-Myers Squibb, alleging state-law claims arising out of the design, development, manufacture, marketing, and distribution of its drug Plavix. Id. at *3; id. at *12 (Sotomayor, J., dissenting). Of the 678 plaintiffs, 86 were injured in California (“California residents”). Id. at *3. Bristol-Myers Squibb did not object to California’s personal jurisdiction as to the claims by California residents. Id. But as for claims by the other 592 non-California residents, it argued that the California courts lacked personal jurisdiction over Bristol-Myers Squibb. Id.

The non-California residents had not been exposed to Plavix advertisements in California, had not been prescribed the drug in California, did not purchase the drug in California, were not injured in California, and had not been treated for their relevant injuries in California. Id. at *4. Moreover, Bristol-Myers Squibb contended that it “did not develop Plavix in California, did not create the marketing strategy in California, and did not manufacture, label, package, or work on the regulatory approval of the product in California.” Id. at *4. The company did advertise and sell Plavix in California, but California sales accounted for only approximately 1% of the company’s nationwide sales revenue. Id. at *4; id. at *12 (Sotomayor, J., dissenting).

The Supreme Court Applies Its Longstanding Rule in a Fortune 500 Context

Justice Alito wrote the opinion of the Court, which drew a dissent only from Justice Sotomayor. The Court reiterated its longstanding rule for specific personal jurisdiction: for courts “to exercise specific jurisdiction over a defendant, ‘the suit’ must ‘aris[e] out of or relat[e] to the defendant’s contacts with the forum.” Id. at *6 (quoting Daimler Chrysler v. Bauman, 134 S. Ct. at 754 (2014)). Thus, “there must be an ‘affiliation between the forum and the underlying controversy, principally, [an] activity or an occurrence that takes place in the forum state.’” Id. at *7 (quoting Goodyear Dunlop Tires Ops., S.A. v. Brown, 564 U.S. 915, 919 (2011)).

The Court determined that there was no such affiliation between California and the non-California residents’ suit against Bristol-Myers Squibb. Id. at *8. In doing so, the Court:

• explicitly rejected the argument that California courts could exercise personal jurisdiction as to the non-residents’ claims because they were essentially identical to the pending, related claims of California residents.
• implicitly rejected the argument that personal jurisdiction was appropriate because it would not be burdensome for Bristol-Myers Squibb to litigate the non-California residents’ claims in California.
• reaffirmed that specific personal jurisdiction is a suit-specific analysis in which it is irrelevant whether the defendant could be subject to personal jurisdiction in the forum state in other matters.
• clarified that a company’s marketing and sales of a product in a forum state is insufficient to trigger specific jurisdiction where the relevant plaintiff was not subject to that marketing and did not make purchases in the forum state.

Significant Impact

Bristol-Myers Squibb represents the third time this term that the Supreme Court has delimited the locations in which corporations may be sued and the Court found jurisdiction lacking in each case. See TC Heartland v. Kraft Foods, 137 S. Ct. 1514 (2017); BNSF Railway v. Tyrell, 137 S. Ct. 1549 (2017). This most recent case has perhaps the most significant consequences, as specific personal jurisdiction is the primary method through which plaintiffs argue personal jurisdiction. See Daimler AG v. Bauman, 134 S. Ct. 746, 749 (2014) (“[S]pecific jurisdiction has become the centerpiece of modern jurisdiction theory.”). This holding also arguably continues a trend by the Supreme Court to limit the locations in which corporations can be sued.

Defendants’ New Options

Bristol-Myers Squibb provides defendants with a forum choice. Personal jurisdiction, whether general or specific, can be waived by the defendant. Accordingly, if a defendant is sued in a state without a clear connection between the claims brought by each plaintiff, the defendant can (1) move to dismiss any claims lacking the required connection, which could narrow or eliminate the suit, or (2) submit to personal jurisdiction, which could be ideal if the plaintiffs’ choice is forum is convenient or otherwise attractive for the defendant. With this in mind, plaintiffs may still choose to bring suit against a defendant in a court that might lack personal jurisdiction in the hope that the defendant will not object. But if the defendant objects to the forum that lacks the requisite contacts with the claims, then Bristol-Myers Squibb has reiterated that the case cannot be maintained, regardless of the convenience or seeming reasonableness of bringing the suit in that state.