Supreme Court takes nonresident jurisdiction case

By Christopher Knoll | Feb 3, 2017

The U.S. Supreme Court recently agreed to take up the arguments put forth in the appealed Bristol-Myers Squibb v. Superior Court, a case that involves establishing the limits of personal jurisdiction over nonresident parties cited in a mass class-action lawsuit.

WASHINGTON -- The U.S. Supreme Court recently agreed to take up the arguments put forth in the appealed Bristol-Myers Squibb v. Superior Court, a case that involves establishing the limits of personal jurisdiction over nonresident parties cited in a mass class-action lawsuit.

According to Scott Dodson, a professor of law at UC Hastings College of the Law, there are two types of personal jurisdiction: general and specific.

“General jurisdiction allows a court to assert jurisdiction over the defendant for any cause of action no matter where that cause of action arises," Dodson told the Northern California Record. “As a result, general jurisdiction is fairly limited. Wherever a defendant can be fairly said to reside is where the applicable court can assert general jurisdiction."

Specific personal jurisdiction is a slightly different animal and is asserted by the court when a defendant evidences purposeful contact related to the cause of the action in question with the forum state.

The Bristol-Myers Squibb case is particularly interesting because it raises the question of whether a plaintiff’s suit is justified when it involves a defendant deliberately seeking to conduct a significant part of its operations within the petitioning state (or forum state), even if there is no causal association between the defendant’s forum contacts and the plaintiff’s allegations.

The origins of the case stem from March 2012, when more than 600 individual plaintiffs filed eight separate complaints against the pharmaceutical giant. The suits assert that the anti-coagulant drug Plavix resulted in 18 deaths and a series of injuries. Bristol-Meyers was incorporated in Delaware, but its main office is in New York and many of its research facilities are in New Jersey.

Eventually, lawyers for the plaintiffs wrapped together all eight cases in a class-action suit that ended up in the Superior Court in California, which had 86 of the 678 plaintiffs. The court ruled in September that both in- and out-of-state residents could sue the company in California court. That decision was appealed by the defendant.

David Levine, also a professor of law at UC Hastings, told the Record that “prior to 1945, the question (of personal jurisdiction) was framed as whether the corporation was ‘present’ in the forum (state) due to its activities.”

Levine said that over time, with cases like Helicopters v. Hall (1984), the Supreme Court began to assess whether a corporation in one state was amenable to general personal jurisdiction in another state if significant contact with that state existed.

The pliability of general personal jurisdiction was also addressed by cases like World World-Wide Volkswagen Corp. v. Woodson (1980) and Goodyear Dunlop Tires Operations, S.A. v. Brown (2011), Levine said. In those cases, the companies in question were doing a pervasive national business and did not vigorously question their amenability to general personal jurisdiction until another Supreme Court case began to reverse the pendulum’s swing.

In 2014, the Supreme Court began to scale back the broadening definition of general jurisdiction. In Daimler AG v. Bauman, the court once again set the requirements for general jurisdiction to its pre-1945 status.

Dodson explained to the Northern California Record that despite appearances, the lower court in the Bristol-Myers case did not ignore Daimler.

“Everyone on the California high court agreed that under Daimler … which has recently and significantly tightened the law regarding general personal jurisdiction, the trial court could not assert general personal jurisdiction over the claims of nonresidents,” he said.

Dodson said the court found that “specific personal jurisdiction was OK in this circumstance because the claims by nonresidents against Bristol Myers were sufficiently related to the claims of residents to permit jurisdiction.”

Where the majority party and the dissenters of the California court parted company was over the issue of relatedness. According to Dodson, the dissenting judges found Bristol-Myers’ forum activities not substantially related to the nonresident plaintiffs’ claims.

Bristol-Myers asserted that California courts lacked jurisdiction because none of the deaths or injuries occurred in California, and there were no factual allegations of any significant activity having occurred in the state, thus providing no relatedness.

The California Superior Court responded that while the defendant did not meet the requirements of general jurisdiction within California, it was subject to specific personal jurisdiction since Bristol-Myers carried out a large part of its research operations in the state, sold the product through a California distributor, assumed the risk of a suit when it engaged in a nationwide marketing campaign and faced similar claims filed by California residents. Bristol-Myers appealed, leading the case to the Supreme Court.

Laura Hortas, vice president and head of Corporate and Employee Communications at Bristol-Myers Squibb, told the Northern California Record that the company was “pleased with the Supreme Court’s decision to hear this case and look(ed) forward to the opportunity to present this matter.”

Levine told the Record that “presumably the Supreme Court took the case to clarify the question of whether a court can assert specific personal jurisdiction over claims that are related to the forum, but the claims do not arise from those contacts.

"This is a position Justice Brennan advocated in several opinions, but there never was a majority opinion adopting (or rejecting) his position,” he said. “A pro-business Roberts court, especially with the addition of Judge Gorsuch, may well hold that Bristol-Myers does not have to defend the nonresidents' claims in California.”

Dodson appeared to agree.

“Given the skepticism that many members of the Supreme Court have on broad expansion of personal jurisdiction, it seems unlikely that the Supreme Court will affirm wholesale” California’s opinion and reasoning, Dodson said.

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