SACRAMENTO - A new study by the Civil Justice Association of California details the volume of product liability cases that out-of-state plaintiffs filed in Los Angeles and San Francisco against pharmaceutical companies between January 2010 and May 2016.
In the 64-month period, the study shows that there were a total of 2,919 cases, with 25,503 plaintiffs. Non-California plaintiffs comprised 89.9 percent of the total versus 10.1 percent of Golden State-based plaintiffs in these product liability cases.
Twelve percent of the U.S. populace lives in California. Yet just one of every ten, or 10 percent, of the plaintiffs in these pharmaceutical cases reside in the Golden State.
And, in two-thirds, or 67 percent, of the 2,919 cases the CJAC studied, there were no California plaintiffs.
A California Supreme Court 4-3 decision on Aug. 29 is responsible for green-lighting litigation of out-of-state plaintiffs against defendants in the Golden State, according to CJAC.
“In this case, 678 total plaintiffs sued Bristol-Myers Squibb (BMS) for injuries allegedly arising from their use of Plavix, a prescription medicine used to inhibit blood clotting after a heart attack or stroke,” according to the CJAC study.
“The numbers in the BMS case are similar to those the research found. In that case, 86 of 678 total plaintiffs, or 12.6 percent, were California residents. Five hundred ninety two, or 87.4 percent lived in 34 other states.
The potential for more out-of-state plaintiffs to rely on the BMS decision and bring their claims to California courts is significant, but not a welcome one, according to CJAC.
"California courts have been plagued with budget issues – courthouse construction is currently on hold due to budget issues," CJAC President Kim Stone stated in a release.
"Allocated and necessary judgeships have not been funded due to budget concerns. Yet, our courts are available for out of state plaintiffs to sue out of state defendants, while California residents have to wait in line for an available courtroom."
California Supreme Court Associate Justice Kathryn M. Werdegar was one of the three justices who dissented.
"As California holds a substantial portion of the United States population, any company selling a product or service nationwide, regardless of where it is incorporated or headquartered, is likely to do a substantial part of its business in California," Werdegar wrote.
"Under the majority‘s theory of specific jurisdiction, California provides a forum for plaintiffs from any number of states to join with California plaintiffs seeking redress for injuries from virtually any course of business conduct a defendant has pursued on a nationwide basis, without any showing of a relationship between the defendant‘s conduct in California and the nonresident plaintiffs’ claims.
"The majority thus sanctions our state to regularly adjudicate disputes arising purely from conduct in other states, brought by nonresidents who suffered no injury here, against companies who are not at home here but simply do business in the state.”
Justices Ming W. Chin and Carol A. Corrigan concurred with Werdegar.
The decision could have a substantial impact in courts across the country, according to law professor Scott Dodson of UC Hastings in San Francisco.
“This is a big decision on an important issue of personal jurisdiction from the most important state court in the nation,” Dodson said.
“What contacts are considered when determining personal jurisdiction over a defendant is a question that has been left unanswered by the Supreme Court and thus has divided lower courts.
“This means that national corporations doing similar business in all 50 states potentially could be hauled into any one state’s court for claims in every state.”
The California legislature adjourned Aug. 31. Any effort to enact law preventing litigation from non-resident plaintiffs in product liability cases could not until next year.
"The high-profile nature of the case, coupled with a split decision from a prominent court, means that it is likely that BMS will appeal to the U.S. Supreme Court,” Dodson said, “and that the justices may be inclined to hear the case.”
What firms are bringing out-of-state plaintiffs?
Which Law Firms Are Doing this?
The CJAC study indicates that relatively few firms represent plaintiffs in the cases studied. In fact, CJAC indcates that 25 firms represent 91 percent of the plaintiffs.
Out of those firms, seven had California residents make up less than 7 percent of their plaintiffs:
· Andrews & Thornton of Irvine.
· Napoli Bern Ripka Shkolnik, a firm that has split, with Napoli maintaining offices in El Segundo.
· Audet & Partners of San Francisco.
· The Miller Firm of San Francisco.
· The Mulligan Law Firm of Dallas.
· Edwards & de la Cerda of Dallas.
· The Law Offices of Sin-Ting Mary Liu of San Clemente.