July 27, 2017 Practice Points

SCOTUS Narrows the State Court Forums Available in Mass Tort Actions

By Donald F. Winningham III

On June 19, 2017, the United States Supreme Court handed down one of two new personal jurisdiction cases when it reversed the California Supreme Court’s approach to ascertaining specific personal jurisdiction. See Bristol-Meyers Squibb Co. v. Super. Ct. Cal., S.F. Cnty., 137 S. Ct. 1773 (2017). The Supreme Court rejected California’s application of the “sliding scale approach to specific jurisdiction.” Id. at 1778 (citation omitted). The Court narrowed the possible state-court forums in which plaintiffs could bring actions by reaffirming the requirement that there be “a connection between the forum and the specific claims at issue.” Id. at 1781.

In Bristol-Meyers, over 600 plaintiffs who took the drug Plavix filed suit in California state court against Bristol-Meyers Squibb (BMS). BMS is “a large pharmaceutical company [that] is incorporated in Delaware and headquartered in New York.” Id. at 1777. BMS conceded that it is subject to general jurisdiction in Delaware and New York and that the suits could be brought there. See Daimler AG v. Bauman, 571 U.S. ––––, 134 S. Ct. 746 (2014). BMS, however, did not develop, create a marketing strategy for, “manufacture, label, package, or work on the regulatory approval of [Plavix] in California.” Bristol-Meyers Squibb Co., 137 S. Ct. at 1778. Plavix sales in California amounted to a little over one percent of total nationwide sales revenue for BMS. Id.

Plaintiffs were a group consisting of 86 residents and 592 non-residents from 33 other states. Id. The non-resident claims had no ties to California. Id. (“The nonresident plaintiffs did not allege that they obtained Plavix through California physicians or from any other California source; nor did they claim that they were injured by Plavix or were treated for their injuries in California.”). Yet this did not stop the California Supreme Court from concluding that the extensive contacts that BMS has with the state “permitted the exercise of specific jurisdiction ‘based on a less direct connection between BMS’s forum activities and plaintiffs’ claims than might otherwise be required.” Id. at 1779 (citation omitted).

The Supreme Court reversed, reaffirming the requirement that “for a court to exercise specific jurisdiction over a claim, 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 1781 (alteration in original) (quoting Goodyear Dunlop Tires Operations, S.A. v. Brown, 564 U.S. 915, 919 (2011)). Bristol-Meyers clears up what exactly the underlying controversy is. Related, identical claims do not create an underlying controversy. Instead, each claim is in itself a controversy over which the court must have either specific or general jurisdiction. See id. (“[E]ven regularly occurring sales of a product in a State do not justify the exercise of jurisdiction over a claim unrelated to those sales” (alterations in original) (quoting Goodyear, 564 U.S. at 931 n.6)).

The obvious immediate impact of Bristol-Meyers is the limitation of mass-tort litigation to states where the defendant is subject to general jurisdiction or where the defendants conducted activities out of which each and every claim arises. Thus, a practitioner preparing to file a mass tort action needs to carefully analyze their choice of forum to avoid wasteful motion practice related to the court’s personal jurisdiction over the defendant(s). Likewise, defense counsel should be on the lookout for instances in which a court might lack the requisite jurisdiction over a defendant.

The more interesting development to watch for, however, is how federal district and appellate courts handle the application of this case in diversity actions. Because the Supreme Court specifically left “open the question whether the Fifth Amendment imposes the same restriction on the exercise of personal jurisdiction by a federal court,” id. at 1784, a different result may be reached if a case similar to Bristol-Meyers is filed in a federal court. At least one court has already distinguished its case from Bristol-Meyers. See Dubose v. Bristol-Meyers Squibb Co., 2017 WL 2775034, at *4 (N.D. Cal. 2017).

Donald F. Winningham III is counsel at Bressler, Amery & Ross P.C., in Birmingham, Alabama.

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