Jurisdiction -- 2016

Bristol-Myers Squibb Company v. Superior Court (Anderson)   (U.S. Supreme Court)

Business and industry opposes finding of California jurisdiction

The NAM and coalition associations filed a merits amicus brief in the California Supreme Court on June 10, 2015. The question before the court is whether California can extend specific jurisdiction over a non-resident corporate defendant. A group of resident plaintiffs had been established, and a separate group of non-resident plaintiffs with identical claims sought to bring their claims before the Californian courts. Bristol-Myers Squibb’s (BMS) moved to quash the service of the summons on the basis that California lacked jurisdiction. The trial court denied the motion, saying that California had general jurisdiction over BMS without addressing specific jurisdiction.

The Court of Appeals decided that California did not in fact have general jurisdiction over BMS in light of the recently decided Daimler AG v. Bauman (2014). However, ostensibly applying the “substantial contacts” test of International Shoe, the court of appeals found that BMS had engaged in “substantial, continuous economic activity” in California, and that was enough to warrant the extension of specific jurisdiction. The Court held that because BMS did business in California and the claims of the non-residents were similar to the claims of the resident plaintiffs, specific jurisdiction was appropriate.

This decision has broad implications for entities doing any business in California. It will dramatically increase their exposure to liability, opening them up to legal actions in California from classes of non-resident plaintiffs. The NAM and its allies argued in an amicus letter that this ruling would place a great burden on manufacturers and any other businesses in California. It is unreasonable and unlawful to extend jurisdiction to the California court system when neither the plaintiffs nor defendants are residents of the state. It goes against the notion of jurisdictional fairness and it is unreasonable to defendant corporations.

The NAM filed a brief in support of the California Supreme Court hearing this appeal, and we filed a merits brief after review was granted. On 8/29/16, the California Supreme Court ruled 4-3, with a strong dissent, that a state court may exercise specific personal jurisdiction over an out-of-state drug company based on claims filed by non-residents whose claim lacks any contact with California, so long as the drug company has extensive contacts in the State and provides the same drug to California residents who raise similar claims.

The case was later appealred to the U.S. Supreme Court, which held 9-1 that the California court did not have jurisdiction over the plaintiffs simply because they had suffered the same injuries as California plaintiffs. Justice Sotomayor was the lone dissenter because she feared the holding would lead to fragmented, piecemeal litigation and eliminate the ability to have a nationwide mass action.

Related Documents:
NAM brief  (June 10, 2015)
NAM amicus letter  (September 25, 2014)


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