United States: Attention Out-of-State Plaintiffs: The Tour Ends Here. Next Stop, Home

Last Updated: September 21 2015
Article by Kevin M. Hara

Last year, the Supreme Court sent a resounding message regarding personal jurisdiction when it decided Daimler AG v. Bauman, 134 S.Ct. 746, 752 (2014). Bauman announced a significantly more stringent standard for finding a corporation to be "essentially at home" in a foreign jurisdiction and, as a result, made personal jurisdiction harder to establish in courts outside the state of a company's place of incorporation or principal place of business. For more discussions about Bauman and its effect, see our prior posts here or those over at the Drug and Device Law blog.

In this post, we highlight two recent post-Bauman personal jurisdiction opinions from a medical device product liability multi-district legislation (MDL) as good examples of how Bauman is useful in mass litigation where joinder provisions are misused to file multi-plaintiff lawsuits. In such circumstances, a single complaint will include a number of plaintiffs from different jurisdictions, with the only connection between them being that the plaintiffs took the same prescription drug or received the same medical device. Filing multi-plaintiff lawsuits can save on filing fees, and can also thwart the defendant's ability to remove the case to federal court on diversity grounds (as described here and here).

Two post-Bauman decisions issued last month, Torres v. Johnson & Johnson, No. 2:14–cv–29741, 2015 WL 4888749 (S.D.W.Va. August 17, 2015), and Bragg v. Johnson & Johnson, No. 2:14–cv–29743, 2015 WL 4889308 (S.D.W.Va. Aug. 17, 2015), demonstrate how the new personal jurisdiction test can be used to limit forum shopping and improper aggregation of multiple plaintiffs into one complaint.

Torres and Bragg each involved one complaint listing multiple out-of-state plaintiffs and a few local plaintiffs (in Torres, a 22-plaintiff complaint was originally filed in state court in New Mexico, and in Bragg, a 50-plaintiff complaint was originally filed in state court in Texas). The cases were removed to federal courts in New Mexico and Texas, then transferred to an MDL pending in the Southern District of West Virginia.

In both cases, the defendants resided and had their principal places of business in New Jersey. Although they conducted business in New Mexico and Texas, they were not incorporated in, and did not have their headquarters in, these states. As a result, these defendants were not "at-home" in New Mexico or Texas, and no general personal jurisdiction existed over them in these states. As the court recognized, the pre-Bauman paradigm likely would have resulted in general jurisdiction, but the Supreme Court had concluded that "the exercise of general jurisdiction in every State in which a corporation engages in a substantial, continuous, and systematic course of business ... [was] unacceptably grasping." Torres, at *5 (citing Bauman, 134 S.Ct. at 761 (internal quotation marks and citation omitted); see also Bragg, at *7 (same).

Turning to case-specific personal jurisdiction, Torres and Bragg considered whether the plaintiffs' claims arose from a connection to the state of filing on a plaintiff-by-plaintiff basis. As a result of this claim-specific personal jurisdiction analysis, the claims of the out-of-state plaintiffs were dismissed for lack of personal jurisdiction, and jurisdiction was retained over the defendants for the local plaintiffs' claims only.

In their application of Bauman, Torres and Bragg are not particularly novel or distinctive—and their ordinariness is the very thing that makes them notable. Before Bauman, most defendants would not have gotten very far with a personal jurisdiction challenge to the filing of a multi-plaintiff complaint. Now, however, defendants have more procedural options when plaintiffs' lawyers pile their clients' lawsuits into the states they view as providing the most plaintiff-friendly environments. Using Bauman to get rid of the claims that properly belong elsewhere can be an important first step toward disaggregating plaintiffs and discouraging the litigation tourism and de facto mass actions that have become commonplace in product liability litigation.

This article is presented for informational purposes only and is not intended to constitute legal advice.

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