Personal Jurisdiction Over Corporations Revisited in Bristol-Myers Squibb Co v Superior Court of California, San Francisco County

Last month, the U.S. Supreme Court granted certiorari in Bristol-Myers Squibb Co v Superior Court of California, San Francisco County. The case involves an issue of great importance to U.S. businesses — the limits of specific jurisdiction.

Specific vs. General Jurisdiction

In order for a state court to exercise personal jurisdiction over a defendant, it must have certain “minimum” contacts with the state, such that the party “could reasonably expect to be haled into court” in that state. With regard to corporations, state courts have general jurisdiction (jurisdiction over a defendant in that state irrespective of the nature of the claim) if the defendant has its principal place of business in the state or if the corporation is incorporated in the state. Specific jurisdiction is more limited. The Due Process Clause authorizes a state court to exercise specific jurisdiction over a defendant only when the plaintiff’s claims “arise out of or relate to” the defendant’s forum activities.

Facts of Bristol-Myers Squibb Co v Superior Court of California, San Francisco County

The case arises from a class-action lawsuit alleging that Bristol-Myers Squibb Co. (Bristol-Myers) negligently and wrongfully designed, developed, manufactured, tested, packaged, promoted, marketed, distributed, labeled, and sold Plavix by misrepresenting the drug’s safety and efficacy. The respondents are 575 non-California residents who joined 86 California residents in suing Bristol-Myers on individual product-defect claims.

Bristol-Myers sought to dismiss the claims for lack of personal jurisdiction. It argued that the claims had no link to the company’s California activities, noting that the respondents were not injured by Plavix in California, were not treated in California, were not prescribed Plavix by California doctors, and did not have their Plavix prescription filled by California pharmacies.

The California Supreme Court held that Bristol-Myers’s general business activities in the State were sufficient to subject the company to specific jurisdiction on respondents’ claims. It held that Bristol-Myers’s “nation-wide marketing, promotion, and distribution of Plavix created a substantial nexus between [respondents’] claims and the company’s contacts in California concerning Plavix” because even though respondents did not allege that they ingested Plavix that was marketed, promoted, or distributed in California, their “claims are based on the same allegedly defective product and the assertedly misleading marketing and promotion of that product, which allegedly caused injuries in and outside the state.”

The dissert argued that the majority’s decision was inconsistent with Supreme Court precedent. It further argued that it “undermines [the] essential distinction between specific and general jurisdiction.”

Issues Before the Supreme Court Presented by Bristol-Myers Squibb Co v Superior Court of California, San Francisco County

On January 19, 2017, the justices agreed to consider the following question:

Whether a plaintiff’s claims arise out of or relate to a defendant’s forum activities when there is no causal link between the defendant’s forum contacts and the plaintiff’s claims-that is, where the plaintiff’s claims would be exactly the same even if the defendant had no forum contacts.

The Court has not yet scheduled oral arguments in the case. Please stay tuned for updates.