Personal Jurisdiction Pivotal Issue Again for Drug and Device Companies

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

While personal jurisdiction issues (i.e., where a company can get sued) may seem esoteric and dull, there are few issues that have larger ramifications for drug and device companies than personal jurisdiction.  Defending a lawsuit against a drug and device company in Philadelphia, Pennsylvania is completely different than defending a lawsuit against a drug and device company in Cheyenne, Wyoming.  Yesterday, the United States Supreme Court granted certiorari in a personal jurisdiction case coming from the California Supreme Court in a mass lawsuit against Bristol-Myers Squibb.  The United States Supreme Court review has the potential to clear up the murkiness around these issues, and it potentially could have a dramatic effect on reducing the locations where a drug or device company can get sued in any particular case.

As discussed more in an earlier blog post, the 4-3 decision by the California Supreme Court that will now be reviewed, 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.  See Bristol-Myers Squibb Co. v. The Superior Court of San Francisco County, 377 P.3d 874 (Cal. 2016). 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 California Supreme 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.”  This follows current law from the United States Supreme Court.

However, on the issue of specific jurisdiction (i.e., whether the case-linked conduct occurred in the forum), the California Supreme 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.”

The last two times the United States Supreme Court has waded into issues of specific jurisdiction in similar contexts – J. McIntyre Mach., Ltd. v. Nicastro, 564 U.S. 873 (2011) and Asahi Metal Indus. Co., Ltd. v. Superior Court of California, Solano Cty., 480 U.S. 102 (1987) – there was no majority decision, leaving many specific jurisdiction issues cloudy and open to debate.  Depending upon the United States Supreme Court’s ruling in the Bristol-Myers Squibb case, we may finally see clarity on issues of specific jurisdiction, which will help answer where a drug or device company can, or cannot, be sued.  This case will be closely watched, and depending upon the outcome, it could become one of the most important cases in recent memory for litigation involving drug and device companies.

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