U.S. Supreme Court Clarifies Constitutional Limits on Specific Jurisdiction Over Foreign Defendants…Again

by Miles & Stockbridge P.C.

Since 2011, the U.S. Supreme Court has continued to roll back the expansion of personal jurisdiction by lower courts and has set more limitations on where a plaintiff can sue corporate defendants. We have  watched this unfold in the Court’s rulings in Goodyear Dunlop Tires Operations, S.A. v. Brown, 564 U.S. 915, 924-929 (2011) and the seminal case Daimler AG v. Bauman, 134 S.Ct. 746 (2014). On June 19, 2017, the Supreme Court further rolled back jurisdictional expansion in Bristol-Myers Squibb Co. v. Superior Court, 137 S.Ct. 1773 (2017), where the Court clarified the constitutional limits on exercising specific jurisdiction over foreign corporate defendants.  

In Bristol-Myers, 86 California residents and 592 non-California residents sued Bristol-Myers Co. in California state court, alleging that the pharmaceutical company’s drug Plavix had damaged their health. Bristol-Myers Co. is incorporated in Delaware, and headquartered in New York. The non-resident plaintiffs did not obtain Plavix in California, nor were they treated for their alleged injuries in California. Bristol-Myers Co. filed a motion to quash service of summons on the non-residents’ claims for lack of personal jurisdiction, which the trial court denied. The California appellate court held that the trial court exercised specific jurisdiction over the non-resident plaintiffs’ claims. The California Supreme Court also affirmed, and applied a “sliding scale approach” under which the strength of the requisite connection between the forum and the specific claims at issue is relaxed, if the defendant has extensive forum contacts to the state. 137 S.Ct. at 1776. The California Supreme Court found that Bristol-Myers Co.’s “wide ranging” contacts with California were enough to support a finding of specific jurisdction over the non-resident plaintiff’s claims. Id.

The Supreme Court found that the California Supreme Court’s analysis, including the “sliding scale approach,” was wrong. The Court held that the non-resident plaintiffs could not sue the pharmaceutical manufacturer in California when their contact with Plavix, and even their alleged subsequent injuries all occurred outside of the state. The Supreme Court stressed that state courts could not circumvent the constitutional requirements for specific jurisdiction, without the plaintiff(s) (resident or non-resident) proving a connection between their alleged injuries and the corporate defendant’s activities in the forum state.   

The Supreme Court rejected the lower court’s “sliding scale approach,” which the Court held was inconsistent with its recent rulings on personal jurisdiction, and resembled “a loose and spurious form of general jurisdiction.” Id. Further, the Court held that the California court could not exercise specific jurisdiction over the non-resident claims simply because there were other resident plaintiffs who were prescribed, obtained, and ingested Plavix in California on the basis that the claims were similar and that Bristol-Myers Co. engaged in sporadic activity in the state. The Court reversed, and determined this is not specific jurisdiction. It explained that what the trial court lacked for specific jurisdiction over the non-residents’ claims was a connection (any substantial connection) between the forum and the specific claims at issue. The Court found that the non-resident plaintiffs failed to satisfy this prerequisite for specific jurisdiction.

It is clear that the recent decisions by the U.S. Supreme Court, including Bristol-Myers, support that the Court has taken steps to limit the notion of “national” personal jurisdiction which will force plaintiffs to more carefully consider the jurisdictions in which they file their lawsuits. For defense counsel, this is a promising start that will bolster immediate dismissals in class action litigation, and hopefully wane “forum-shopping,” which continues to force corporate defendants to litigate cases in distant plaintiff-friendly forums.  

In the context of product liability litigation, the impact of Bristol-Myers has already been seen in a St. Louis trial court that declared a mistrial in a lawsuit filed by out-of-state plaintiffs against the New Jersey-based Johnson & Johnson over its talc-related products. The Court’s ruling in Bristol-Myers offers defense counsel nationwide with yet another tool to protect their clients on jurisdictional grounds, and when applicable to seek an immediate dismissal in future products liability/mass torts cases. 

Opinions and conclusions in this post are solely those of the author unless otherwise indicated. The information contained in this blog is general in nature and is not offered and cannot be considered as legal advice for any particular situation. Accessing this blog and reading its content does not create an attorney-client relationship with the author or with Miles & Stockbridge. Any federal tax advice provided in this communication is not intended or written by the author to be used, and cannot be used by the recipient, for the purpose of avoiding penalties which may be imposed on the recipient by the IRS. Please contact the author if you would like to receive written advice in a format which complies with IRS rules and may be relied upon to avoid penalties.

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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