Several weeks ago, the U.S. Supreme Court issued its opinion in Bristol-Myers Squibb Co. v. Superior Court of Cal., No. 16-466, 581 U.S. —, 2017 WL 2621322 (June 19, 2017) (“Bristol-Myers Squibb”). The more than 600 plaintiffs seeking redress for alleged harm suffered from using a pharmaceutical drug, presented the Supreme Court with the following question: could a California state court exercise personal jurisdiction over nonresident plaintiffs joining California plaintiffs? In an 8-1 decision authored by Justice Alito, the Supreme Court held that the nonresidents’ claims lacked personal jurisdiction. Although the claims at issue pertained to alleged harm from a pharmaceutical drug, this case has far reaching implications for companies who do business in more than one jurisdiction.
On appeal from the California Supreme Court, Bristol-Myers Squibb presented a detailed examination of specific jurisdiction. The Supreme Court disagreed with the California Supreme Court’s finding that nonresidents’ claims were subject to specific jurisdiction of the Court. The Supreme Court remarked:
“The present case illustrates the danger of the California approach. The State Supreme Court found that specific jurisdiction was present without identifying any adequate link between the State and the nonresidents’ claims. As noted, the 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. As we have explained, “a defendant’s relationship with a . . . third party, standing alone, is an insufficient basis for jurisdiction.” [Citation.] This remains true even when third parties (here, the plaintiffs who reside in California) can bring claims similar to those brought by the nonresidents. Nor is it sufficient—or even relevant—that BMS conducted research in California on matters unrelated to Plavix. What is needed—and what is missing here—is a connection between the forum and the specific claims at issue.”
In addressing the nonresident and resident plaintiffs’ arguments concerning consequences of an adverse ruling, the Supreme Court noted:
“Our straightforward application in this case of settled principles of personal jurisdiction will not result in the parade of horribles that respondents conjure up. [Citation.] Our decision does not prevent the California and out-of-state plaintiffs from joining together in a consolidated action in the States that have general jurisdiction over BMS. BMS concedes that such suits could be brought in either New York or Delaware. [Citation.] Alternatively, the plaintiffs who are residents of a particular State—for example, the 92 plaintiffs from Texas and the 71 from Ohio—could probably sue together in their home States. In addition, since our decision concerns the due process limits on the exercise of specific jurisdiction by a State, we leave open the question whether the Fifth Amendment imposes the same restrictions on the exercise of personal jurisdiction by a federal court. [Citation.].”
Darrell is an associate at Weintraub Tobin, specializing in complex business litigation disputes. He also provides outside general counsel services to clients across the manufacturing, construction, and real estate industries.