New California and Illinois Opinions Force Drug Companies to Litigate Out-of-State Plaintiff Cases in California and Illinois

Jordan Lipp, Esq. | Partner, Davis Graham & Stubbs LLP

In the last week, the California Supreme Court and the Illinois Court of Appeals have each issued opinions finding that their respective states had personal jurisdiction to hear lawsuits by out-of-state plaintiffs against out-of-state defendant drug companies.

On August 29, 2016, in Bristol-Myers Squibb Co. v. The Superior Court of San Francisco County, — P.3d –, 2016 WL 4506107 (Cal. 2016), the California Supreme Court in a 4-3 decision addressed the issue of personal jurisdiction in a case where 678 individuals, consisting of 86 California residents and 592 nonresidents, all alleged adverse consequences from the use of Bristol-Myers Squibb’s drug Plavix.  Bristol-Myers Squibb is incorporated in Delaware, headquartered in New York City, with substantial operations in New Jersey.  The lawsuits were filed in San Francisco Superior Court.

On the issue of general jurisdiction (i.e., whether a defendant can be sued in the forum regardless of whether the case is related to the forum), the Court stated that “although the company’s ongoing activities in California are substantial, they fall far short of establishing that it is at home in this state.”  However, on the issue of specific jurisdiction (i.e., whether the case-linked conduct occurred in the forum), the Court found that Bristol-Myers Squibb’s national marketing, promotion, and distribution of Plavix in California, coupled with its research and development facilities in California, created specific jurisdiction, even with respect to the out-of-state plaintiffs.  Although the majority opinion stated its decision did “not render California an all-purpose forum for filing suit against [the defendant] for any matter,” the dissent warned that the “the majority [decision] expands specific jurisdiction to the point that, for a large category of defendants, it becomes indistinguishable from general jurisdiction.”

Only a few days earlier, on August 26, 2016, in M.M. v. GlaxoSmithKline LLC, 2016 Ill. App. LEXIS 575 (Ill. App. 2016), the Illinois Court of Appeals for the First District addressed whether the Circuit Court of Cook County, Illinois had specific jurisdiction over GlaxoSmithKline in lawsuits brought by 12 nonresident plaintiffs against GlaxoSmithKline based upon the drug Paxil.  Although GlaxoSmithKline is based in Delaware and does not have corporate or administrative headquarters in Illinois, the Illinois Court of Appeals found that personal jurisdiction existed over GlaxoSmithKline.  The Court reasoned that as the Plaintiffs’ allegations involved GlaxoSmithKline’s alleged errors during its clinical trials of Paxil, which partially occurred in Illinois, these Illinois clinical trial actions established specific jurisdiction.

While Daimler AG v. Bauman, 134 S. Ct. 746 (2014) and other recent decisions have given hope to drug and device companies that they will not be sued in forums other than their home states, especially in cases where the plaintiffs also do not reside in the forum state, neither the California nor Illinois decisions advance this cause.

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