United States: Are You Affiliated? The Supreme Court Further Limits Forum Shopping In The Mass Tort Context

Last Updated: July 4 2017
Article by Hall R. Marston

Pardon the Jimi Hendrix allusion, but it seemed appropriate given yesterday's Supreme Court decision in Bristol-Myers Squibb Co. v. Superior Court of California, No. 16-466 (June 19, 2017), in which the California Supreme Court's finding of specific jurisdiction against a drug manufacturer was reversed as to non-California plaintiffs, who sued alleging personal injuries due to their ingestion of Plavix, a prescription drug that inhibits blood clotting. While for defendants the decision is undoubtedly welcome, the Court relies on an "affiliation" threshold, requiring a relationship between the defendant and forum arising from the plaintiff's claim before specific jurisdiction over the defendant can be maintained. "Affiliation" works well for the facts of the case, but perhaps not so well for broader applications. Just as the 1960's square had no clue what Hendrix meant, it may be that "affiliation" lacks sufficient precision to give judges guidance on more complicated facts patterns in the future.

California and non-California plaintiffs filed eight separate state court complaints alleging personal injuries due to use of Plavix. As to the non-residents, BMS moved unsuccessfully to quash service of process for want of personal jurisdiction, arguing that because these plaintiffs alleged no California connection to their injuries (they didn't get Plavix through a California source, and weren't injured or treated in California) there was no basis for the exercise of jurisdiction. The California Court of Appeal reversed on general jurisdiction, citing Daimler, but affirmed on specific jurisdiction. The California Supreme Court affirmed the appellate court, agreeing there was no general jurisdiction, but finding specific jurisdiction under a "sliding scale approach to specific jurisdiction." Since BMS had other California contacts, unrelated to plaintiffs' claims, the exercise of jurisdiction was justified since a "less direct connection between BMS's forum activities and plaintiffs' claim" was all that need be shown.

The Supreme Court, per Justice Alito, reversed, 8-1. While a court with general jurisdiction over a corporation (that is, a court sitting in a forum in which the corporation is "fairly regarded as at home") may hear any claim against the defendant, the rules are different for forum where the defendant is not at home. To exercise specific jurisdiction, the suit must arise out of or relate to the defendant's forum contacts. There must be an "affiliation" between the forum and the underlying controversy, to wit, activity or an occurrence in the forum state, sufficient to justify the exercise of jurisdiction. This requirement grows out of the territorial limitations on the power of the states, who retain sovereign authority to try causes in their courts. Under the Fourteenth Amendment, even if the forum is the most convenient, even if the defendant suffers minimal or even no inconvenience in litigating there, and even if the state has an interest in applying its law to the dispute, interstate federalism may divest a state of its power to render a valid judgment, in the absence of an adequate affiliation.

BMS sold all sorts of products in California (including Plavix to the California plaintiffs), but those sales, and other activities were unrelated to the non-residents' claims, and therefore could not supply a constitutional basis for the exercise of jurisdiction. In a direct rebuff to the California Supreme Court, Justice Alito wrote "[o]ur cases provide no support for this approach, which resembles a loose and spurious form of general jurisdiction."

While an "affiliation" standard works well in this context, where it appears that a group of non-California plaintiffs, probably gathered together by a bundler using advertising to secure representation, insinuate themselves into suits to take advantage of a plaintiff-friendly jurisdiction, it may not work so well at the margins. Assume, for example, foreign plaintiffs, without other connections to the forum, allege that forum-based activity, supported by a defendant not otherwise amenable to general jurisdiction, caused their injury. (Think use of opinion-leaders in the prescription drug context, or independent research done in California, but licensed by a foreign corporation.) Are opinion-leaders affiliated? Is the licensee of technology developed in the forum but marketed elsewhere affiliated with the forum where the research was independently conducted?

Corporate defendants no doubt welcome this restrictive approach to specific jurisdiction, and it will likely inhibit the ability of mass tort bundlers to concentrate the power of numbers in a jurisdiction perceived to be more receptive to such claims. But, since "affiliation" lacks precision, we can no doubt anticipate that the outer limits of Justice Alito's doctrine will be tested, and if possible stretched by what is an ever aggressive mass tort bar.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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