Leslie Brueckner of Public Justice and I just published an article in Law360 about the Supreme Court’s recent decision in Bristol-Myers Squibb Co. v. Superior Court. Here it is in full:
Although the case was closely watched by both sides of the aisle because of its potential to strictly limit plaintiffs’ ability to sue corporations outside of their “home” state, the 8-to-1 ruling was decided on “settled principles” of law — and, as a result, it did not move the legal needle anywhere near as far as the defense bar was hoping.
In this case, both California and nonresident plaintiffs sued Bristol-Meyer Squibb (BMS), a national pharmaceutical company, for personal injuries caused by Plavix, a cardiovascular drug linked to strokes and other serious injuries. Because BMS is incorporated in Delaware and headquartered in New York, and conducts most of its operations on the East Coast, there was no basis for asserting “general,” or “all-purpose,” jurisdiction over BMS in California.
Instead, the question was whether California courts could assert specific jurisdiction over BMS, which exists where the plaintiff’s claims “aris[e] out of or relat[e] to the defendant’s contacts with the forum.”
Specific jurisdiction was a non-issue as to the California plaintiffs because they had bought their Plavix in California and were injured in the state. But the nonresident plaintiffs did not allege any links between their claims and California; they simply sought to join their claims with those of California residents, which were based on similar facts.
Despite the absence of any links between the nonresidents’ claims and California, the California Supreme Court upheld the exercise of specific jurisdiction over BMS. The court applied a “sliding scale” approach to specific jurisdiction, which considers the overall range of a defendant’s contacts with the forum, even those that have no relation to the plaintiff’s claims. Under this approach, “the more wide ranging the defendant’s forum contacts, the more readily is shown a connection between the forum contacts and the claim.”
Applying this test, the state high court concluded that specific jurisdiction over the non-residents’ suits against BMS was proper because BMS had extensive contacts with California (including almost $1 billion of Plavix sales to California residents) and because the claims of resident and nonresident plaintiffs were “based on the same allegedly defective product and the assertedly misleading marketing and promotion of that product.”
The U.S. Supreme Court reversed, in a decision written by Justice Alito and joined by all other justices except for Justice Sotomayor, who dissented. The court held that California’s unique “sliding scale” approach to specific jurisdiction “resembles a loose and spurious form of general jurisdiction,” because it looks only to defendants’ “general connections” with the forum.
This is insufficient under established precedent, the court held, citing Goodyear Dunlop Tires Operations SA v. Brown and International Shoe Co. v. Washington. Applying “settled principles,” the court found that, because “all the conduct giving rise to the nonresidents’ claims occurred elsewhere,” California lacked specific jurisdiction over BMS with regard to the non-resident plaintiffs.
Not a Sea Change: Court Hews to “Settled Principles” in Rejecting California’s Test
The defense bar has hailed BMS as a major victory for corporations, but that’s wishful thinking. In reality, the court ducked the major legal question presented in the case: the meaning of the U.S. Supreme Court’s oft-stated (and cryptic) rule that, for specific jurisdiction to exist, a plaintiffs’ claims must “arise out of or relate to” the defendant’s contacts with the forum state.
The court first enunciated this standard back in 1984, in Helicopteros Nacionales de Colombia SA v. Hall, but in that very case it “decline[d] to reach the question[ ] … whether the terms ‘arising out of’ and ‘related to’ describe different connections between a cause of action and a defendant’s contacts with a forum.”
Court watchers expected BMS to answer this question, but no such luck. In striking down the California Supreme Court’s “sliding-scale approach,” the BMS majority didn’t discuss the “arise out of or relate to” test at all. Instead, it simply held that California’s “sliding scale” approach ran afoul of “settled principles” and “is difficult to square with our precedents.”
The majority’s silence on this point is particularly notable given how hard BMS tried to get the court to address it. BMS made this issue a central focus of its merits brief and urged the court to hold that “a defendant’s forum conduct must be a proximate cause of the plaintiff’s claim.”
But the court declined to reach the issue, ruling instead that California’s approach is invalid because it allowed for a finding of specific jurisdiction despite the lack of any connection between the forum “and the specific claims at issue.”
It is telling, however, that the BMS majority faulted the sliding-scale approach, because it allows specific jurisdiction to be predicated on contacts that are completed unrelated to a plaintiffs’ claims. This unique feature of California’s rule, wrote the court, caused it to resemble a “loose and spurious form of general jurisdiction” — the type of jurisdiction that allows a defendant to be sued based on acts that “are unrelated to [the plaintiff’s] claims.”
The italicized reference to “unrelated acts” suggests that the majority simply saw no need to decide the meaning of the “arise out of or relate to” because, in its view, California’s approach violated any interpretation of that test. In any event, the fact that BMS did not explain or set any limits on the “arise out of or relate to” test greatly limits the decision’s precedential impact.
Unique Facts Further Limit BMS’s Reach
Beyond that (and relatedly), the facts of BMS are so unique as to render it almost sui generis. The majority went out of its way to emphasize the absence of “any adequate link between the State and the nonresidents’ claims,” noting that “the nonresidents were not prescribed Plavix in California, did not purchase Plavix in California, did not ingest Plavix in California, and were not injured by Plavix in California.”
The court ultimately held that, because “’[t]he relevant plaintiffs are not California residents and do not claim to have suffered harm in that State, [and] in addition, … all the conduct giving rise to the nonresidents’ claims occurred elsewhere, [i]t follows that the California courts cannot claim specific jurisdiction.”
This holding has limited bearing on cases where the non-resident plaintiffs have suffered harm in the forum, or where the conduct giving rise to the non-resident’s injuries has occurred there. BMS simply does not speak to those circumstances, leaving those closer jurisdictional questions for another day.
To be sure, BMS does mean that mass actions can no longer be brought in coordinated proceedings in state court on behalf of all injured plaintiffs nationwide, if the underlying suits are not filed in the state where the defendant is subject to general, or all-purpose, jurisdiction.
That is no small change in the law, as Justice Sotomayor’s dissent lays bare. Nevertheless, the court’s opinion in BMS is a fairly muted application of personal jurisdiction doctrine, which may explain why Justices Ginsburg and Kagan joined it.
Nor should BMS have any dramatic impact on class actions. Some members of the defense bar say that BMS will limits plaintiffs’ ability to bring multistate class actions in any state court that could not exercise general jurisdiction over the defendant. This argument, however, over-reads BMS. As Justice Sotomayor noted in her dissent, the majority did not “confront the question whether its opinion … would also apply to a class action in which a plaintiff injured in the forum State seeks to represent a nationwide class of plaintiffs, not all of whom were injured there.”
And the reasoning of BMS does not logically extend to class actions. As Justice Sotomayor noted in her dissent, it has long been established that “[n]onnamed class members may be parties for some purposes and not for others.” For instance, nonnamed class members are “not parties” with respect to determining diversity for purposes of jurisdiction.
Should the rule for class actions be any different when it comes to personal jurisdiction? We think not. Though beyond the scope of this article, there are compelling reasons why a class representative’s satisfaction of personal jurisdiction should suffice to establish adjudicatory jurisdiction over class members.
In the end, there is no doubt that BMS is a lamentable result for “plaintiffs who are injured in different States by a defendant’s nationwide course of conduct [and wish] to sue that defendant in a single, consolidated action.” But there is also no doubt that the court did not create a new specific jurisdiction test.
Instead, the court simply applied established precedent and issued a narrow, factbound ruling. In the aftermath of BMS, then, lower courts would do well to adhere to settled principles of personal jurisdiction — and refrain from crediting far-reaching theories of personal jurisdiction that the Supreme Court itself declined to embrace.
Leslie A. Brueckner is a senior attorney at Public Justice, where her areas of practice include class actions, constitutional law, food safety, federal preemption and combating court secrecy. Andre M. Mura is a partner at Gibbs Law Group LLP and of counsel to Girard Gibbs LLP; he represents plaintiffs in class action and complex litigation concerning consumers’ and workers’ rights, products liability, drug and medical devices, federal jurisdiction and constitutional law.
The opinions expressed are those of the author(s) and do not necessarily reflect the views of the firm, its clients, or Portfolio Media Inc., or any of its or their respective affiliates. This article is for general information purposes and is not intended to be and should not be taken as legal advice.
 137 S. Ct. 1773 (2017).
 See id. at 1781, 1793.
 See id. at 1778. See generally Daimler AG v. Bauman, 134 S. Ct. 746, 187 (2014)
 BMS, 137 S. Ct. at 1780 (quoting Daimler, 134 S. Ct. at 754 (internal quotation marks omitted)).
 377 P.3d 874, 879 (Cal. 2016).
 Id. at 888.
 137 S. Ct. 1773, 1781 (2017) (emphasis added).
 564 U.S. 915 (2011).
 326 U.S. 310 (1945).
 137 S. Ct. at 1781.
 Id. at 1782 (citing World-Wide Volkswagen Corp. v. Woodson, 444 U.S. 286, 295 (1980)).
 BMS, 137 S. Ct. at 1780 (quoting Daimler, 134 S.Ct., at 754 (internal quotation marks omitted)). See also Burger King Corp v. Rudzewicz, 471 U.S. 462, 472 (1985).
 See Helicopteros Nacionales de Colombia SA v. Hall, 466 U.S. 408, 414, nn. 8–9 (1984).
 Bristol Myers Squibb v. Superior Court, Brief for Petitioner, No. 16-466, 2017 WL 908857 (Mar. 1, 20017) at *13 (emphasis added).
 BMS, 137 S. Ct. at 1781; see also id. at 1788 (Sotomayor, J., dissenting) (noting that majority declines to adopt a “rigid requirement that a defendant’s in-state conduct must actually cause a plaintiff’s claim”).
 Id. at 1781 (emphasis added).
 See id. at 1788 n.3 (Sotomayor, J., dissenting) (characterizing majority’s decision as “factbound”).
 Id. at 1782.
 Id. at 1789.
 137 S. Ct. at 1789 n.4 (Sotomayor, J., dissenting).
 Id. (quoting Devlin v. Scardelletti, 536 U.S. 1, 9-10 (2002)).
 Devlin, 536 U.S. at 10.
 See Diane P. Wood, Adjudicatory Jurisdiction and Class Actions, 62 Ind. L. J. 597, 616–617 (1987), cited approvingly by 137 S. Ct. at 1789 n.4 (Sotomayor, J., dissenting).
 137 S. Ct. at 1789 (Sotomayor, J., dissenting).