If momentum counts for anything in U.S. Supreme Court decision-making, civil litigators and corporate counsel are in for a major victory sometime this month.
The high court is poised, as soon as June 19, to hand down a ruling in Bristol-Myers Squibb v. Superior Court of California, probably the most important of three cases before the court this term dealing with the important issue of jurisdiction: where corporations can be sued, and the extent to which plaintiffs can forum-shop.
For litigators, “this case is huge,” said Hugh Young Jr. of the Product Liability Advisory Council, whose membership includes 94 manufacturing companies nationwide. “It’s not a sleeper case, it’s a big damned deal.”
In the two other cases this term—BNSF Railway v. Tyrrell and TC Heartland v. Kraft Foods Group—the court has already ruled against those who try to file suits in plaintiff-friendly venues that have little or no connection to the defendant corporation or the injuries at issue.
“We’ve been fighting for decades for venue reform, but it looks like the Supreme Court is finally stepping in and doing something about it,” said Shook, Hardy & Bacon partner Victor Schwartz, a longtime tort reformer who coined the phrase “litigation tourism” to describe the problem.
Depending on how definitive the high court’s ruling is, the decision could even lead companies to consider moving facilities out of states with plaintiff-friendly courts.
“You might not want to move your headquarters or where you are incorporated, but if you can be flexible about where to locate, this could be the time to do it,” Locke Lord partner Rusty Perdew said.
Each of the three cases before the court this term has a unique context governed by differing statutes or precedents, but Morrison & Foerster partner Brian Matsui said, “The trend line is toward tightening the reins.”
Matsui and others came away from the April 25 oral argument in the Bristol-Myers case thinking that the court, as with the other two cases, was leaning toward the pharmaceutical company that was sued in a class action over injuries caused by Plavix, a blood-thinning drug.
While not willing to predict the outcome, Perdew said that during the argument there were “no other clear plaintiff-side justices” besides Justice Sonia Sotomayor, who has dissented in recent pro-defendant jurisdiction rulings.
Bristol-Myers Squibb’s lawyer, Neal Katyal of Hogan Lovells, emphasized during arguments that plaintiffs in the class action at issue included “hundreds of plaintiffs who were not prescribed a drug in California, who did not take it in California, who lacked any injury in California, and who had no other connection to California.”
But by using a “sliding scale,” the California Supreme Court decided the company’s nationwide marketing, promotion and distribution of Plavix created a “substantial nexus” to California that justified California courts’ specific jurisdiction over the lawsuit.
Katyal asked for a rule that would require plaintiffs to show that their injuries were caused by the defendant’s activities in the state where the suit is filed.
Not everyone is looking forward to a possible win for Bristol-Myers Squibb.
“While I don’t want to speculate on the outcome in Bristol-Myers, a decision denying jurisdiction could force cases with multiple defendants to be split and cause inconsistent verdicts,” said Robert Peck of the Center for Constitutional Litigation, who wrote a brief in the case for the American Association for Justice.
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