June 20, 2017
Bristol-Myers Squibb v. Superior Court of California, 582 U.S. ___ (2017) (Alito, J.).
Response by Alan Morrison1
Geo. Wash. L. Rev. On the Docket (Oct. Term 2016)
Slip Opinion | Bloomberg | SCOTUSblog
Bristol-Myers Squibb v. Superior Court of California: Another Big Personal Jurisdiction Win for Defendants
Over the past half-dozen years, the Supreme Court has issued a series of rulings that, taken together, have seriously limited the ability of plaintiffs to obtain personal jurisdiction over defendants in their preferred forum. On June 19, 2017, the Court, in an opinion by Justice Samuel Alito, from which only Justice Sonia Sotomayor dissented, held that non-residents of a State could not sue a defendant that was neither incorporated nor had its principal of business in that State for injuries that occurred outside that state.2 That was so even though the plaintiffs only sought to join suits by state residents, regarding the same product sold nationwide, which caused injuries alleged to be identical to those of state residents.3 The result, which was hardly a surprise, is not itself a devastating blow to plaintiffs, but its impact will depend on where the next shoe falls in cases that will have even more practical significance than the ones already decided.
The relevant facts regarding personal jurisdiction are simple and not disputed. Bristol-Myers Squibb sold the blood thinner Plavix throughout the United States, earning the company billions of dollars in annual revenues at its height.4 When problems developed, the company was sued by thousands of individuals who took the drug; among them were 678 who brought suit in California, of whom 86 were California residents. Although the claims of all the plaintiffs were identical, the Court ruled that the Due Process Clause only permits those who took Plavix in California to sue Bristol-Myers there.
The principal dispute between the majority and the dissent was how close the relationship had to be between the claims of the non-residents and activities of the defendant in the forum state. As the majority saw it, neither the fact that (1) identical claims by California residents were joined in these cases, nor (2) that Bristol-Myers has five California research facilities, employing 160 individuals, and about 250 sales representatives, nor (3) that Bristol-Myers sold 187 million Plavix pills in California, grossing $900 million in six years, mattered because none of these facts showed any “connection between the forum and the claims [of the non-resident plaintiffs] at issue.”5 Justice Sotomayor, by contrast, found the “relates to” requirement to be much less rigid: because the claims of all plaintiffs involved defendant’s “materially identical” conduct, and the sale of Plavix was done on a nationwide basis, she concluded that the requirement was satisfied for bringing non-resident claims in California.6
In one sense, the decision was not a major setback for plaintiffs because any Plavix user can still sue in their home state (assuming they took they drug where they now live, a possible exception that was not before the Court). Moreover, they can also sue in Bristol-Myers’ home jurisdictions–its place of incorporation or its principal place of business. What Bristol-Myers wanted in this case, and what corporate defendants want generally, is to be able to avoid suits in jurisdictions which the plaintiffs believe are more favorable to them.7 Defendants do not oppose efficiency arising from all consolidations (the plaintiffs’ justification for bringing in non-residents), but they want the cases brought on their own home turf–which is their own version of forum-shopping–or at least in the fifty home states of the plaintiffs, with no outsiders permitted.
Defense counsel will surely not rest after this latest victory, especially given their perfect record at the Court since 2011 and the near unanimity in all of the rulings except J. McIntyre Machinery, Ltd. v. Nicastro,8 where there were concurring votes of two Justices and a dissent by three others. The likely next targets are nationwide opt-out state court class actions. In 1985, the Court upheld one in Phillips Petroleum Co. v Shutts,9 which the plaintiffs in Bristol-Myers argued could not be possible if the Court ruled in favor of the defendant here. In Shutts, the defendant claimed that it would violate the Due Process rights of the absent class members unless the class was an opt-in class, but the Court disagreed, citing the requirements of notice, adequate representation, and the right to opt-out as sufficient protections to provide class members with all the process that was due them. Plaintiffs here argued that it would be “absurd” to conclude that the result in Shutts would be reversed only if defendant had relied on its own rights, and not those of the class. But the Court met that response by citing only what the Court held in Shutts, not what it might have held had it been presented with the arguments made here.10 Whether that was an adequate response for today is much less important than how the Court will respond when there is the inevitable direct challenge to a nationwide state-law class action.11
Although the majority was untroubled by the limits on consolidation that its opinion imposes, which it characterized as plaintiffs’ “parade of horribles,”12 the dissent focused on the very real problems that may result. Among these include suits against more than one defendant, in the likely event that they do not share a common “home” where all the cases can be brought, or suits involving foreign defendants with no “home” in the U.S.13 In addition, the dissent raised a question regarding facts similar to those in World-Wide Volkswagen Corp. v. Woodson,14 where personal jurisdiction was found wanting as to the two New York defendants who sold the car at issue, but the German manufacturer never sought dismissal on personal jurisdiction grounds. Applying the ruling here to those facts suggested to the dissent that the result for the manufacturer would not be different under the majority’s “relates to” test.15 The claims at issue there were for design and manufacturing defects which occurred, if at all, far from Oklahoma where the accident took place and far from New York where the vehicle was sold to plaintiffs. Will it matter that defendant sells cars and provides warranty and other services in the State where the injury occurred, or will it, like Bristol-Myers’ other business in California in this case, be seen as irrelevant to the personal jurisdiction inquiry?
Last, there is the issue of whether the result would be different if the suit based on state law claims were brought in federal rather than state court, a possibility raised by the plurality in McIntyre,16 and by the majority in Bristol-Myers.17 To the extent that these state court limits are about enforcing federalism, federal courts are in a different position. But the federal court alternative is, for now, a purely academic question because, with very limited exceptions, plaintiffs with non-federal claims in federal court can obtain personal jurisdiction over the defendant only to the same extent that the courts of the state in which the district court sits could do so.18 Whether that limit could be changed by rule, or would require a statute, is unclear; what is clear is that any such change would be bitterly fought by the defense bar, which prefers federal to state courts, but prefers “home” courts even more. At the very least, the ruling here “hands one more tool to corporate defendants . . . and forces injured plaintiffs to bear the burden of bringing suit in what will often be far-flung jurisdictions.”19
There is one unsettled area of personal jurisdiction that did not make it into either opinion in Bristol-Myers: claims arising from Internet activities. In a First Amendment decision handed down the same day as Bristol-Myers, the Court in Packingham v. North Carolina,20 recognized the transformative nature of the Internet, but gave no clue as to how that fact would apply in this context. At the very least, these personal jurisdiction cases and the Internet will provide classroom hypotheticals and final exam questions for at least a decade of civil procedure students and their instructors.
Dean Alan B. Morrison is the Lerner Family Associate Dean for Public Interest & Public Service Law, at The George Washington University Law School, where he teaches civil procedure and constitutional law. Dean Morrison is an experienced Supreme Court advocate, having argued 20 cases before the Court. He frequently does moot courts for advocates and files amicus briefs in the Supreme and other courts. He is a former President of the American Academy of Appellate Lawyers and is a regular High Court commenter for On the Docket and other publications.
- The author filed an amicus brief in support of the plaintiffs-respondents in this case. Brief for Alan Morrison as Amici Curiae Supporting Respondents, Bristol-Myers Squibb v. Superior Court of California, No. 16-466, slip op. (U.S. June 19, 2017).
- See Bristol-Myers Squibb v. Superior Court of California, No. 16-466, slip op. (U.S. June 19, 2017).
- See id. at 9.
- See id. at 2 (Sotomayor, J., dissenting).
- Id. at 1–2 (majority opinion).
- Id. at 5–6 (Sotomayor, J., dissenting).
- The same kind of forum-shopping was found wanting in the Court’s other personal jurisdiction case this term, BNSF R. Co. v. Tyrrell, 137 S. Ct. 1549 (2017), with the same winning lineup, except that Justice Sotomayor dissented only in part. Because the two plaintiffs in that case were railroad employees injured on the job away from their homes, they may not even be able to sue where they reside, although the railroad, for public relations reasons, may choose not to fight that battle, in contrast to Tyrrell, where Montana state courts had become a particularly friendly venue for railroad employees.
- 564 U.S. 873 (2011).
- 472 U.S. 797 (1985).
- See Bristol-Myers, slip op. at 11.
- See id. at 10, n.4 (Sotomayor, J., dissenting) (recognizing this open issue).
- See id. at 12 (majority opinion).
- Id. at 10 (Sotomayor, J., dissenting).
- 444 U.S. 286 (1980).
- Bristol-Myers, slip op. at 9, n.3 (Sotomayor, J., dissenting).
- 564 U.S. at 885–86. But see id. at 904, n.12 (Ginsburg, J., dissenting) (questioning what purpose would be served under the Due Process Clause by applying different personal jurisdiction rules to federal and state courts in the same location).
- See Bristol-Myers, slip op. at 12.
- See Fed. R. Civ. P. 4(k)(1)(A) (granting “personal jurisdiction over a defendant . . . who is subject to the jurisdiction of a court of general jurisdiction in the state where the district court is located”).
- See Bristol-Myers, slip op. at 10 (Sotomayor, J., dissenting).
- No. 15-1194, slip op. (U.S. June 19, 2017).
Recommended Citation Alan Morrison, Response, Bristol-Myers Squibb v. Superior Court of California: Another Big Personal Jurisdiction Win for Defendants, Geo. Wash. L. Rev. On the Docket (June 20, 2017), http://www.gwlr.org/bristol-myers-squibb-v-superior-court-of-california/.