U.S. Supreme Court Clamps Down on Mass Tort State Court Lawsuits

Jordan Lipp | Partner, Davis Graham & Stubbs LLP

Yesterday morning, in an 8-1 decision, the United States Supreme Court determined that plaintiffs who did not reside in California could not sue Bristol-Myers Squibb in California.  The decision is the latest one in a string of decisions from the United States Supreme Court, which are limiting the scope of personal jurisdiction – i.e., where a company can get sued.  The question of where a company can or cannot get sued is one of the most important issues in defending lawsuits against life science companies.  And this lawsuit is a classic example of these issues.

As discussed more in earlier blog posts as we’ve followed this litigation, this appeal involved personal jurisdiction issues 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.  Bristol-Myers Squibb challenged the jurisdiction of California courts to hear the claims of plaintiffs who did not reside in California.  While the California Supreme Court found there was no 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 found that there was specific jurisdiction (i.e., case-linked jurisdiction) due to Bristol-Myers Squibb’s “wide ranging” contacts with California.

Yesterday, the United States Supreme Court reversed the California Supreme Court.  As “the nonresidents were not prescribed Plavix in California, did not purchase Plavix in California, did not ingest Plavix in California, and were not injured by Plavix in California,” the United States Supreme Court Court found specific jurisdiction lacking.  Specific jurisdiction in these circumstances is absent no matter how many other connections Bristol-Myers Squibb had to California, no matter how many California residents had sued Bristol-Myers Squibb for the same conduct in California, and no matter how efficient having combined litigation  in California might be.  While hardly a surprising ruling, this decision could have far reaching consequences in large-scale drug and device litigation.  While a drug or device company can be sued in the state in which it is headquartered or incorporated (i.e., the concept of general jurisdiction), it will be much harder for plaintiffs to sue drug and device companies in any other plaintiff-friendly jurisdictions.  Rather, this Bristol-Myers Squibb decision will continue the trend in confining plaintiffs to suing drug and device company only in their own home-state, or where the drug or device company is headquartered / incorporated.

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