For the third time this spring, business advocates on Monday succeeded in persuading the U.S. Supreme Court to limit forum-shopping by tightening jurisdictional rules that determine where corporate defendants can be sued.
In Bristol-Myers Squibb v. Superior Court of California, the court sided with the pharmaceutical company in its battle against a class action brought in California by injured users of Plavix, a blood-thinning drug, even though many of the plaintiffs had little or no connection to the state.
Justice Samuel Alito, writing for the majority, said “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 mere fact that other plaintiffs were prescribed, obtained, and ingested Plavix in California—and allegedly sustained the same injuries as did the nonresidents—does not allow the state to assert specific jurisdiction over the nonresidents’ claims.”
Alito continued, “What is needed—and what is missing here—is a connection between the forum and the specific claims at issue.”
Justice Sonia Sotomayor was the lone dissenter, asserting that the ruling “will make it impossible to bring a nationwide mass action in state court against defendants who are ‘at home in different states. And it will result in piecemeal litigation and the bifurcation of claims.”
The 8-1 ruling in the closely-watched California case came on the heels of TC Heartland v. Kraft Foods Group Brands, a May 22 decision that limited patent infringement lawsuits primarily to the state of the defendant’s incorporation, and BNSF Railway v. Tyrrell, a May 30 ruling that said the Fourteenth Amendment bars states from conducting trials when the corporation “is not ‘at home’ in the state and the episode-in-suit occurred elsewhere.”
The U.S. Chamber of Commerce and other business groups pushed these and other cases toward the Supreme Court this term, seeking clarification of murky jurisdiction precedents that have encouraged states to go their own way.
“Because the pervasive confusion in the lower courts is traceable to language in this court’s own decisions, only this court can provide clarity,” states a brief in the Bristol-Myers case filed by the Product Liability Advisory Council. Alan Untereiner of Robbins, Russell, Englert, Orseck, Untereiner & Sauber was counsel of record on the brief.
“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, before the decision came down.
In the Bristol-Myers case, the California Supreme Court ruled that both in-state and out-of-state plaintiffs could sue the pharmaceutical company in California. The company had sought to exclude non-California plaintiffs from the litigation, but a majority of justices ruled that California courts had “specific jurisdiction” because Bristol-Myers conducted significant research, sales and marketing within the state. “We conclude the company’s California activities are sufficiently related to the nonresident plaintiffs’ suits.”
The decision was a win for Bristol-Myers Squibb’s lawyer Neal Katyal of Hogan Lovells, who argued for the drug company. Rachel Kovner, assistant to the solicitor general also argued on the side of the company. Thomas Goldstein of Goldstein & Russell argued against Bristol-Myers Squibb.
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