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In Bristol-Myers Squibb Co. v. Superior Court (June 19, 2017, Case No. 16-466), the United States Supreme Court has ruled 8-1 that California lacks “specific” personal jurisdiction over a pharmaceutical company, reversing a 4-3 decision last year by the California Supreme Court.  The case arises from a mass tort action filed in California by almost 600 non-resident plaintiffs along with 86 residents, alleging that the defendant’s drug Plavix caused them personal injuries.

• All agreed that the defendant, incorporated in Delaware and headquartered in New York, was not “at home” in California as required for general jurisdiction under Daimler AG v. Bauman.
• But the state high court asserted specific jurisdiction over the defendant, which normally requires that the plaintiffs’ claims arise from the defendant’s in-state activities.  Here, Bristol-Myers Squibb did not research or manufacture the drug in California, and none of the non-resident plaintiffs could show that the Plavix they took was sold or prescribed in California.  But the California Supreme Court relied on Bristol-Myers Squibb’s voluminous sales of Plavix through an in-state distributor (co-defendant McKesson), its maintenance of some other California research facilities, its nationwide advertising of the drug, and the “efficiency” of litigating the non-residents’ claims alongside the similar claims of state residents.

The U.S. Supreme Court rejected not only that result, but the “sliding scale approach to specific jurisdiction” that the California Supreme Court used to reach it.  “Under this approach,” the opinion explains, quoting the state-court majority, “‘the more wide ranging the defendant’s forum contacts, the more readily is shown a connection between the forum contacts and the claim.’”  (Slip op. at 3.)  That test led the California court to conclude that the drugmaker’s significant contacts with California permitted the exercise of specific jurisdiction based on “a less direct connection between [the defendant’s] forum activities and plaintiffs’ claims than might otherwise be required.”  (Ibid.)  The U.S. Supreme Court agreed with Justice Werdegar’s dissenting opinion:  “Our cases provide no support for this approach, which resembles a loose and spurious form of general jurisdiction.”  (Slip op. at 7.)

The high court held that settled principles of specific jurisdiction foreclosed the California courts from entertaining the non-residents’ claims against Bristol-Myers Squibb, because no connection existed between those claims and the defendant’s in-state activities.  The court rejected reliance on the similar claims of state residents to justify entertaining the claims of non-residents in the same suit, regardless of any purported efficiency.  It likewise rejected reliance on California’s jurisdiction over co-defendant McKesson, because “it is not alleged that BMS engaged in relevant acts together with McKesson in California.  Nor is it alleged that BMS is derivatively liable for McKesson’s conduct in California”—as might be the case if the non-resident plaintiffs could show that McKesson was the source of the Plavix they took.  (Slip op. at 11-12.)

Importantly, the court confined its decision to “the due process limits on the exercise of specific jurisdiction by a State,” noting: “we leave open the question whether the Fifth Amendment imposes the same restrictions on the exercise of personal jurisdiction by a federal court.”  (Slip op. at 12.)