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Supreme Court Issues Important Jurisdictional Ruling in Plavix Case

646545By Meenakshi Krishnan

On Monday, June 19, the Supreme Court held 8-1 in Bristol-Myers Squibb Co. v. Superior Court of California, San Francisco County that California courts lacked specific jurisdiction to entertain claims brought by plaintiffs who were not California residents, as there was an insufficient connection between the forum and the specific claims at issue. 

In Bristol-Myers Squibb Co., a group of plaintiffs—86 California residents and 592 residents from other states—filed several state law claims in California Superior Court, alleging health damage caused by Plavix, a drug manufactured and sold by Bristol-Myers. The nonresident plaintiffs did not claim that they procured Plavix through any California source, nor did they claim they were injured or treated for their injuries in California. Bristol-Myers did not develop, market, manufacture, or otherwise work on Plavix in California, though the drug was sold in the state. Bristol-Myers asserted lack of personal jurisdiction, and after the Supreme Court’s decision in Daimler AG v. Bauman, the California Court of Appeal held that California courts had specific jurisdiction over the nonresidents’ claims. The California Supreme Court affirmed, applying a “sliding scale approach to specific jurisdiction.” Under that approach, “the more wide ranging the defendant’s forum contacts, the more readily is shown a connection between the forum contacts and the claim.” The Supreme Court granted certiorari to decide whether the California courts’ exercise of jurisdiction in this case violated the Due Process Clause and subsequently reversed and remanded.

Writing for an eight-justice majority, Justice Alito held that this case fell squarely within the Court’s settled principles regarding specific jurisdiction. Citing Goodyear Dunlop Tires Operations, S.A. v. Brown, the Court reaffirmed 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.” Accordingly, the Court rejected the California Supreme Court’s “sliding scale approach” as squarely out of line with its precedent. The Court described the approach as “a loose and spurious form of general jurisdiction.” A defendant’s general, even if extensive, contacts with the forum state are insufficient to establish specific jurisdiction. The Court further clarified that even though California resident plaintiffs could bring claims similar to those brought by nonresidents, this was an insufficient basis for specific jurisdiction. The Court also explained that the nonresidents’ reliance on Keeton v. Hustler Magazine, Inc. and Phillips Petroleum Co. v. Shutts was misplaced. Keeton did not concern “jurisdiction to entertain claims involving no in-state injury and no injury to residents of the forum State.” Meanwhile, as Shutts concerned the due process rights of plaintiffs, as opposed to defendants, it had no bearing on the case. Lastly, the Court rejected the plaintiffs’ contention that Bristol-Myers’ decision to contract with a California company for national distribution of Plavix was sufficient to establish personal jurisdiction. In closing, the Court emphasized that the decision did not prevent the California and out-of-state plaintiffs from bringing a consolidated action in those states with general jurisdiction, or plaintiff residents of a particular state from suing together in their home states. The Court also left open the question of whether the Fifth Amendment imposes the same restrictions on the exercise of personal jurisdiction by a federal court. 

Justice Sotomayor, in dissent, emphasized the substantial impact of the Court’s decision. She predicted several outcomes of the ruling: First, aggregation of claims of plaintiffs in different states will be more difficult; second, it may now be impossible to bring a national mass action in state court against defendants who are “at home” in different states; third, the decision will “result in piecemeal litigation and the bifurcation of claims.” For Justice Sotomayor, permitting specific jurisdiction in this case would not offend the “traditional notions of fair play and substantial justice” at the heart of jurisdictional analysis. Bristol-Myers “purposefully availed” itself of the California market, and the nonresidents’ claims pertained to Bristol-Myers’ “same essential acts” across all states—the marketing and distribution of Plavix. Moreover, Bristol-Myers already faces identical claims from California residents, so Justice Sotomayor expressed no doubt that “the exercise of jurisdiction over the nonresidents’ claims is reasonable.”

The Court’s decision is available here.