SAN FRANCISCO -- A recent California Supreme Court decision involving the pharmaceutical company Bristol Myers Squibb will greatly impact products liability lawsuits in California and possibly in other states, experts say.
Judge Tani Cantil-Sakauye
The decision comes from eight 2012 lawsuits filed against Bristol Myers Squibb, the maker of Plavix, a drug prescribed to prevent blood clots, after 678 patients taking it suffered strokes and/or bleeding. The California Supreme Court decision in Bristol-Myers Squibb v. Superior Court states that Bristol Myers Squibb Co. (BMS), a pharmaceutical manufacturer, conducts significant business and research activities in California but is neither incorporated nor headquartered there. In March 2012, eight separate amended complaints were filed in San Francisco Superior Court by or on behalf of 678 individuals, consisting of 86 California residents and 592 nonresidents, all of whom allegedly were prescribed and ingested Plavix, a drug created and marketed by BMS, and as a result suffered adverse consequences. BMS contests the propriety of a California court’s exercising personal jurisdiction over it for purposes of adjudicating the nonresident plaintiffs’ claims.
The divided court ruled that BMS is subject to state-court jurisdiction. Bristol Myers Squibb operates five offices in California but also directs TV, print and radio marketing campaigns to non-residents. Speaking for the majority, Chief Justice Tani Cantil-Sakauye wrote: "Where a forum seeks to assert specific jurisdiction over an out-of-state defendant who has not consented to suit there, this fair warning requirement is satisfied if the defendant has purposefully directed his activities at residents of the forum and the litigation results from alleged injuries that arise out of or relate to those activities."
The Bristol Myers Squibb decision partially refutes a U.S. Supreme Court 2014 ruling that had narrowed forum shopping. The plaintiffs’ attorneys were upset in 2014 by the case of Daimler AG v. Bauman (2014). General jurisdiction became more difficult to argue under Daimler because states no longer allowed a case to be filed in any state where the defendant had a substantial business presence. The Daimler v. Bauman case said that the old system was going to be limited to two instances: the state of incorporation and the state where the Defendant has its principal place of business.
According to J. Nicci Warr, an attorney with Stinson Leonard Street LLP who handles complex business litigation, the Bristol Myers Squibb decision is likely to draw more cases to California.
“The impact of the California Supreme Court's decision will not necessarily be limited to California," Warr told the Northern California Record. "There are a number of states across the country that attract an outsized proportion of mass tort litigation because they are seen by the plaintiffs' bar as favorable locations. Daimler limited the opportunity to file lawsuits in these locations. It is likely that the plaintiffs' bar will push courts in other states to adopt the holding of the California Supreme Court to get around the limits imposed by Daimler.”
This decision could also impact non-products cases.
“The Bristol-Myers Squibb decision is likely to have the largest impact on products liability and other mass-tort cases, but it could have repercussions in other areas, as well," Warr said. "Jurisdiction is often an important issue in any high-stakes litigation, and any theory that makes it easier for the plaintiffs' bar to bring cases (and particularly to aggregate cases) in their favored locations is significant. For example, some defendants in class actions have argued that the class must be limited to residents of the forum state because the court lacks personal jurisdiction over the defendant for the claims of non-residents. Under the California Supreme Court's reasoning, this argument would likely be rejected.”
Bristol Meyers Squibb will likely not let this go easily.
“I expect that Bristol-Myers Squibb will ask the U.S. Supreme Court to review—and reverse—the California Supreme Court's decision, Warr said. "Although the U.S. Supreme Court hears only a small percentage of the cases it is asked to review (and even fewer with the current eight-justice court), the fact that the California court split 4-3 with a strongly worded dissent may increase the chances that the court will hear the case. We should know by the end of November whether Bristol-Myers Squibb intends to seek review by the U.S. Supreme Court.”