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U.S. Supreme Court Ruling Significantly Impacts Product Liability Litigation

Attorney: Hillary H. Huth, Charles T. Sheldon, Lisa M. Rice | Published 6.21.17

On Monday, the United States Supreme Court issued a decision in the case of Bristol-Myers Squibb Co. v. Superior Court of California, San Francisco County, et al. finding that California courts lack jurisdiction to hear nonresidents’ claims in a class action case alleging they were injured by Plavix, a blood thinner drug manufactured and sold by Bristol-Myers.

The case was filed in California state court by a group of over 600 plaintiffs, only 86 of whom were California residents. The plaintiffs who resided outside of California did not claim to have purchased Plavix from any California source, and did not claim that they were injured by Plavix in California. Bristol-Myers challenged the state court’s jurisdiction over the nonresidents’ claims.

Although Plavix was not developed or manufactured in California, Bristol-Myers does have other research and marketing facilities in California. The California Supreme Court found that these activities were sufficient to establish jurisdiction in California because the claims of the California residents and the nonresidents were based on the same allegedly defective product and misleading marketing of the product.

In a 8-1 decision, the United States Supreme Court reversed the California Supreme Court and held that California courts did not have specific personal jurisdiction over the nonresidents’ claims as they were not prescribed Plavix in California, did not purchase the drug in California, and were not injured by the drug in California.

The opinion noted that it was not sufficient, or even relevant, that Bristol-Myers conducted research in California on matters unrelated to Plavix as a connection between the forum and the specific claims at issue was still missing. Additionally, the fact that Bristol-Myers had contracted with McKesson, a California company, to distribute Plavix nationally was not sufficient to establish specific personal jurisdiction.

Justice Sotomayor alone dissented on grounds that Bristol-Myers is a large corporation and that the advertising and distribution efforts for Plavix were national as the same advertisements were seen throughout the country. Justice Sotomayor’s dissent noted that the Court’s decision will make it difficult to bring nationwide mass actions in state courts except in a defendant’s “home” state.

The decision in Bristol-Myers Squibb Co. v. Superior Court of California follows the court’s ruling last month in BNSF Railway Co. v. Tyrrell, which itself reaffirmed the court’s recent views on the limitations of state-court jurisdiction announced a few years ago in Daimler AG v. Bauman.

The decision limits plaintiffs’ attorneys ability to “forum shop” product liability cases, and in the context of mass torts, means that a defendant’s home jurisdiction – where it is incorporated or maintains its headquarters – may be the only state-court forum for a consolidated nationwide suit.