BREAKING NEWS: Supreme Court Decision on Bristol-Myers Squibb v Calif Superior Ct

06/20/17

The United States Supreme Court handed down its latest opinion yesterday reigning in the improper exercise of personal jurisdiction over out-of-state corporations in Bristol-Myers Squibb Co. v. Superior Court of California, San Francisco County, et al.  This opinion makes it abundantly clear that the exercise of personal jurisdiction is limited and must comport with a narrow determination of due process.  In Bristol-Myers Squibb the State of California had employed a “sliding scale” to justify the exercise of specific personal jurisdiction over a pharmaceutical company for out-of-state injuries to out-of-state plaintiffs.  The Supreme Court reversed, finding that California’s “sliding scale” was not specific jurisdiction but rather a “loose and spurious form of general jurisdiction,” and reaffirming that in order to exercise specific jurisdiction there must be a sufficient nexus between the claim and the forum regardless of the defendant’s other contacts with the jurisdiction. Click here for the Court's Opinion.

A class action was brought in California against Bristol-Myers Squibb by a group of nearly 700 plaintiffs alleging injury from the drug Plavix.  Bristol-Myers is incorporated in Delaware and headquartered in New York.  Only 86 of the plaintiffs were California residents who could allege that they purchased, consumed, or were injured by Plavix in the state of California.  Bristol-Myers Squibb moved to dismiss for lack of personal jurisdiction.  Applying a “sliding scale,” the California Supreme Court found that “the more wide ranging the defendant’s forum contacts,” the more tenuous the connection could be between the forum state and the claims.  The California Court found that the out of state plaintiffs’ claims were similar to the in-state plaintiffs’ claims and that Bristol-Myers Squibb had sufficient connections to California between its marketing of its drugs there and its research facilities (although none of those research facilities helped develop Plavix) to justify the exercise of jurisdiction even though the nexus between California and the claim was remote.

The United States Supreme Court reversed, citing “settled principles regarding specific jurisdiction.”  The Court reminded the parties that the exercise of personal jurisdiction is not about the convenience of the court but is more fundamentally a question of the “abstract matter of submitting to the coercive power of a State that may have little legitimate interest in the claims in question.”  The existing case law on specific jurisdiction, the Court held, provides “no support” for an approach in which a tenuous connection between a controversy and a jurisdiction can be strengthened by the defendant’s unrelated connections to the forum state.   If the defendant’s conducts are not sufficiently pervasive to give rise to general personal jurisdiction, then the plaintiff must allege an “adequate link between the State and the . . . claims.”

The Court was also not persuaded, although the lone dissent by Justice Sotomayor was, that the fact that the California plaintiffs alleged the same injuries arising from the same conduct as the non-resident plaintiffs had any bearing on whether California had jurisdiction.  The defendant’s relationship to a third party, without more, is an “insufficient basis for jurisdiction.”

For more information on this decision and the implications of challenging personal jurisdiction please contact John C. McMeekin II at jmcmeekin@rawle.com or Laura Bower Braunsberg at lbraunsberg@rawle.com.