U.S. Supreme Court Rejects Personal Jurisdiction in Pharmaceutical Case with Respect to Non-Resident Plaintiffs

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A group of plaintiffs, including 86 California residents and 592 residents of other states, sued Bristol-Myers Squibb Company (BMS) in California state court, alleging that the pharmaceutical company’s drug Plavix had damaged their health. BMS is incorporated in Delaware and headquartered in New York, and it maintains substantial operations in both New York and New Jersey. Although it engages in business activities in California and sells Plavix there, BMS did not develop, create a marketing strategy for, manufacture, label, package, or work on the regulatory approval for Plavix in the State. The nonresident plaintiffs did not allege that they obtained Plavix from a California source, that they were injured by Plavix in California, or that they were treated for their injuries in California. The California Supreme Court found specific jurisdiction over the manufacturer, even with respect to the non-residents, but the U.S. Supreme Court reversed:

“In order for a court to exercise specific jurisdiction over a claim, there must be an affiliation between the forum and the underlying controversy, principally, an activity or an occurrence that takes place in the forum State. When there is no such connection, specific jurisdiction is lacking regardless of the extent of a defendant’s unconnected activities in the State. For this reason, the California Supreme Court’s ‘sliding scale approach’ is difficult to square with our precedents. Under the California approach, the strength of the requisite connection between the forum and the specific claims at issue is relaxed if the defendant has extensive forum contacts that are unrelated to those claims. Our cases provide no support for this approach, which resembles a loose and spurious form of general jurisdiction. For specific jurisdiction, a defendant’s general connections with the forum are not enough. A corporation’s continuous activity of some sorts within a state…is not enough to support the demand that the corporation be amenable to suits unrelated to that activity.

“The present case illustrates the danger of the California approach. The State Supreme Court found that specific jurisdiction was present without identifying any adequate link between the State and the nonresidents’ claims. As noted, 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 mere fact that other plaintiffs were prescribed, obtained, and ingested Plavix in California — and allegedly sustained the same injuries as did the nonresidents — does not allow the State to assert specific jurisdiction over the nonresidents’ claims….  The present case illustrates the danger of the California approach. The State Supreme Court found that specific jurisdiction was present without identifying any adequate link between the State and the nonresidents’ claims. As noted, 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 mere fact that other plaintiffs were prescribed, obtained, and ingested Plavix in California — and allegedly sustained the same injuries as did the nonresidents — does not allow the State to assert specific jurisdiction over the nonresidents’ claims. As we have explained, a defendant’s relationship with a third party, standing alone, is an insufficient basis for jurisdiction. This remains true even when third parties (here, the plaintiffs who reside in California) can bring claims.”

“In a last ditch contention, respondents contend that BMS’s decision to contract with a California company McKesson to distribute Plavix nationally provides a sufficient basis for personal jurisdiction. But the requirements of International Shoe must be met as to each defendant over whom a state court exercises jurisdiction. In this case, 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. And the nonresidents have adduced no evidence to show how or by whom the Plavix they took was distributed to the pharmacies that dispensed it to them…. The bare fact that BMS contracted with a California distributor is not enough to establish personal jurisdiction in the State.”

 

Bristol-Myers Squibb vs. Superior Court of California, No.16–466, 2017 WL 2621322 (June 19, 2017).

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