SCOTUS Rules CA Courts Lack Specific Jurisdiction to Entertain Injury Claims by Non-Residents (Bristol-Myers)

June 20, 2017Article

The U.S. Supreme Court has struck down the ability of non-California residents to sue defendants in California courts for injury claims that have no connection to California, even where defendants have extensive business contacts in the state. In Bristol-Myers Squibb v. Superior Court of California, the high court reversed the California Supreme Court and held that when the activities of the defendant which allegedly cause an out-of-state plaintiff's injuries have no connection to the venue state, the state cannot establish specific jurisdiction over defendants simply by virtue of their extensive business activities in California.

Nearly 600 non-Californians filed suit in the California Superior Court in San Francisco, alleging they were harmed by Bristol-Myers' blood-thinning drug, Plavix. The California Supreme Court held that even though plaintiffs' injuries occurred outside California and they resided out of state, California state courts could nevertheless maintain specific personal jurisdiction over Bristol-Myers based on the company's extensive contacts in the state, such as the development, marketing and distribution of products in California, and nearly $1 billion in sales here. This was a departure from prior state and federal cases which generally require some connection between the forum state and the injury in order to establish specific personal jurisdiction.

In an 8-to-1 opinion, the U.S. Supreme Court reversed the California Supreme Court and held that since the relevant plaintiffs were not California residents, and there is no affiliation between the forum and the underlying controversy, California courts cannot maintain specific jurisdiction over Bristol-Myers based only on their unrelated business activity in California.

This ruling will have a major impact on mass tort cases involving multiple defendants such as jurisdictions like Madison County, Illinois, which is a hotbed of asbestos litigation against defendants with little or no contacts to the forum. We have already seen this impact on a talc case in Missouri that resulted in a dismissal seven days into trial.

This ruling can be effectively used to prevent out-of-state plaintiffs from "forum shopping" and subjecting defendants to California's relatively plaintiff-friendly laws and juries.  This case, along with the Court's previous ruling inDaimler AG v. Bauman, can protect businesses from litigating claims in California which have no connection to California.  The rulings also provide businesses greater certainty in knowing and anticipating which jurisdictions' rules will apply in the event of litigation for injury claims.