Personal Jurisdiction
| Publication year | 2016 |
| Author | By Scott Dodson |
By Scott Dodson
Personal jurisdiction is a doctrine that describes the constitutional limits of a court's adjudicatory authority over parties, especially parties located outside the state where the court sits. Under the famous Supreme Court case International ShoeCo. v. Washington,1a state may assert personal jurisdiction over a nonresident defendant that has sufficient "minimum contacts" with the state when the contacts arise out of or are related to the cause of action.2 But what makes a contact "related to" the cause of action? The Supreme Court of California answered that question in Bristol-Myers Squibb Co. v. The Superior Court of San Francisco County on August 29, 2016.3
Bristol-Myers Squibb manufactures the drug Plavix, a blood-clotting inhibitor. In a set of complaints filed in California state court, 86 California residents and 592 nonresidents sued Bristol-Myers Squibb and its California distributor for injuries related to their use of Plavix. The claims were based upon the allegations that the defendants engaged in a uniform, nationwide misrepresentation of Plavix's benefits and side effects in an effort to increase sales in California and elsewhere.
The complaints did not allege that the nonresident plaintiffs had any connections to California. Bristol-Myers Squibb is a Delaware company with its headquarters in New York and substantial operations in New Jersey. Bristol-Myers Squibb does have a presence in California—including five research and laboratory laboratories, around 250 salespersons, and a small lobbying office—and it sold almost 187 million Plavix pills to distributors and wholesales in California in 2006-2012, with sales revenue exceeding $900 million. But it has never manufactured Plavix in California, nor has it conducted any Plavix research or development in California. Accordingly, Bristol-Myers Squibb filed a motion to quash service as to the nonresident plaintiffs, arguing that it was not subject to personal jurisdiction in California as to the nonresident plaintiffs' claims.
The Supreme Court of California disagreed. Relying on prior cases,4 the Court stated that a "related" contact need not arise directly from the defendant's contacts with California but instead need only have a "substantial nexus or connection" to the defendant's contacts with California.
Applying that test to the facts of the case, the California Supreme Court reasoned that the conduct giving rise to the nonresident plaintiffs' claims was substantially connected to the conduct giving rise to the California plaintiffs' claims because it was identical except for being in different states. Bristol-Myers Squibb engaged in a common, coordinated, nationwide course of distribution; its product was the same across states; its marketing and promotion of Plavix were consistent among California and other states; and the misrepresentations alleged to have been made to nonresidents were identical to those alleged to have been made to California plaintiffs. The Court also concluded that "the fact that the company engages in research and product development in [its] California facilities is related to [nonresident] plaintiffs' claims that BMS engaged in a course of conduct of negligent research and design that led to their injuries, even if those claims do not arise out of BMS's research conduct in this state."
Accordingly, the Court found that Bristol-Myers Squibb's out-of-California conduct giving rise to nonresident plaintiffs' claims was related to its California conduct and therefore sufficient to give California personal jurisdiction over Bristol-Myers Squibb regarding the nonresident claims. In essence, Bristol-Myers Squibb's coordinated, nationwide distribution and marketing effort, coupled with its substantial research and development operations within California, made its efforts outside of California "related to" its significant efforts within California for purposes of personal jurisdiction.
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Three justices dissented. In their view, the non-California conduct was "similar" and "parallel" to, but failed to "intersect" with, the California conduct. The dissenters would require a connection between the nonresident plaintiffs' legal claims and Bristol-Myers Squibb's California contacts. No California contact has any legal significance to the nonresident plaintiffs' claims. Indeed, the nonresident plaintiffs' claims would contain the same allegations even if Bristol-Myers Squibb had no California contacts. For that reason, the dissenters would find no personal jurisdiction in California over Bristol-Myers Squibb on the nonresident plaintiffs' claims.
The opinion is significant for several reasons. First, it is the first decision to examine, with plausible...
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