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June 01, 2018 Feature

Recent Developments in Personal Jurisdiction

By Joan R. Camagong
Recent Developments in Personal Jurisdiction

Recent Developments in Personal Jurisdiction

Bristol-Myers Squibb—The Decision

Over the last few years, the United States Supreme Court has taken a critical look at the bounds of personal jurisdiction and effectively reined in its expansion. The Court’s decision in Bristol-Myers Squibb v. Superior Court of California, San Francisco Co., 137 S. Ct. 1773 (2017) (BMS) follows suit. There, the Court clarified that its long-standing specific jurisdiction principles apply to nonresident plaintiffs whose claims have been joined with those of in-state plaintiffs, and thus, courts cannot assert jurisdiction over claims brought by nonresident plaintiffs unless each such plaintiff can establish a connection between the nonresident defendant’s conduct in the forum and their own specific claims.

In BMS, 592 plaintiffs residing outside of California joined 86 California resident plaintiffs to sue Bristol-Myers Squibb and McKesson Corporation, asserting various product-defect claims based on their use of Bristol-Myers Squibb’s blood-thinning drug Plavix. Bristol-Myers Squibb, the manufacturer of Plavix, is a global pharmaceutical company incorporated in Delaware and headquartered in New York, and McKesson Corporation is a California-based distributor of the drug.

The California Supreme Court applied a “sliding scale” approach to specific jurisdiction to find that California courts could exercise specific jurisdiction over the out-of-state plaintiffs’ claims because it was sufficient that the in-state and out-of-state plaintiffs’ claims were based on the same product and the same allegedly “misleading marketing and promotion of that product.” Id. at 1779.

The United States Supreme Court reversed this decision, rejecting the California Supreme Court’s approach as “resembl[ing] a loose and spurious form of general jurisdiction.” Id. at 1781. In doing so, the Court clarified once and for all that due process requires either the defendant is at home in the jurisdiction (i.e., incorporated in the forum or maintains its principle place of business there) or the claims are connected to the defendant’s contacts in that jurisdiction. As the Court explained:

[T]he nonresidents were not prescribed Plavix in California, did not purchase Plavix in California, did not ingest Plavix in California, and were not injured by Plavix in California. The mere fact that other plaintiffs were prescribed, obtained, and ingested Plavix in California—and allegedly sustained the same injuries as did the nonresidents—does not allow the State to assert specific jurisdiction over the nonresidents’ claims . . . [W]hat is missing here—is a connection between the forum and the specific claims at issue.

Id. While the Supreme Court clarified the contours of specific jurisdiction, it also left certain questions open for the lower courts to decide.

Unanswered Questions

How much of a connection between a plaintiff’s claims and the forum state is required to permit the assertion of specific jurisdiction? BMS did not reach this issue because there was no connection between California and the claims of the non-California plaintiffs. But what connection is required will certainly be a question that courts will engage with in future cases. A look at cases following BMS confirms this.

In Dubose v. Bristol-Myers Squibb, a South Carolina plaintiff sued Bristol-Myers Squibb in the Northern District of California for injuries allegedly caused from her use of the drug at issue in South Carolina. 2017 WL 2775034, at *3 (N.D. Cal. June 27, 2017). The court distinguished BMS, reasoning that Dubose’s injuries would not have occurred but for Bristol-Myers Squibb’s contacts with California because the drug’s California clinical trials were part of the “unbroken chain of events leading to Plaintiff’s alleged injury.” Id. Even though only a small number of clinical trials were conducted in California relative to several other states, the court found the plaintiff’s allegations that California was the location of “nearly every pivotal clinical trial necessary for NDA approval” sufficient to depart from BMS. Id. at *4.

In contrast, courts have applied BMS in similar factual scenarios. In the Xarelto litigation, the Southern District of Illinois dismissed non-Illinois plaintiffs who did not claim injuries from ingesting Xarelto in Illinois. Berousee v. Janssen Research & Development, No. 3:17-cv-00716, 2017 WL 4255075 (S.D. Ill. Sept. 26, 2017). Similar to the Dubose plaintiff, the Xarelto plaintiffs also alleged that Illinois was the location for clinical trials, which formed the foundation for Xarelto’s FDA approval. Id. at *4. Unlike the Dubose court, however, the Xarelto court did not find this sufficient. Instead, the Xarelto court found the matter analogous to BMS in that defendant’s contacts with the forum states were not “directly related to the challenged conduct” (i.e., injuries alleged from drug use) and thus dismissed the non-Illinois plaintiffs. Id. at *3.

Thus, there appears to be a divide over the level of contact necessary to trigger specific jurisdiction under BMS. Where one court found clinical trials in the forum state to be sufficient, another has not. Nonetheless, the developing weight of authority appears to favor the latter.

How does BMS apply in the class action context? BMS involved a mass tort action, where several plaintiffs are joined together in one action, as opposed to where a single plaintiff injured in the forum state seeks to represent a multi-state class. At least one court has found this a reason not to extend BMS to class actions. Fitzhenry-Russell v. Dr. Pepper Snapple Grp., No. 17-cv-00564 NC, 2017 WL 4224723 (N.D. Cal. Sept. 22, 2017). In Fitzhenry-Russell, Dr. Pepper moved to dismiss the non-California class members, arguing that BMS should be read as a bar to the non-California class members’ claims. In rejecting Dr. Pepper’s challenge, the court noted that this may be a situation where the “[n]onnamed class members … may be parties for some purposes and not for others.” Id. at *5. In other words, the citizenship of the unnamed plaintiffs was not considered for personal jurisdiction purposes, regardless of the fact that 88 percent of the purported class members were not California residents. Id.

While application of BMS to the class action context may seem dubious in light of the above, several other courts across the country have found BMS applicable. In the Northern District of New York, for example, the court dismissed non-forum classes under BMS because like BMS, the only connection to the forum was the in-state plaintiffs’ use of the products. Spratley v. FCA US LLC, No. 3:17-cv-0062, 2017 WL 4023348 (N.D.N.Y. Sept. 12, 2017). Similarly, in the Northern District of Illinois, a court dismissed the non-forum plaintiffs’ claims because they failed to show any connection between their claims and the defendant’s forum contacts. McDonnell v. Nature’s Way Products, No. 1:16-cv-05011, 2017 WL 4864910 (N.D. Ill. Oct. 26, 2017).

In light of BMS and the decisions that followed, it can be expected that some courts will continue to grapple with the required connection between a defendant’s forum contacts and the challenged conduct and whether and how to apply BMS in the class action context. Regardless, the developing case law appears to favor a narrowing view of specific jurisdiction and application to the class action context.

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Joan R. Camagong

Associate with Shook, Hardy & Bacon LLP

Joan R. Camagong is an associate with Shook, Hardy & Bacon LLP in San Francisco, California. Her practice focuses on complex product liability and class action litigation. She is a vice-chair of the TIPS’s Products Liability Committee and the Pharmaceutical, Medical Device, and Biosciences Committee. She may be reached at [email protected].