On August 29, 2016, the California Supreme Court held that a company with that was neither headquartered nor incorporated in California, nor had any peculiar ties to the state is subject to personal jurisdiction of the California courts on the basis of specific jurisdiction.
This decision stems from a case involving Bristol-Myers Squibb Co. (“BMS”), a company which manufactures a pharmaceutical drug called Plavix. BMS is incorporated in Delaware, headquartered in New York, and maintains substantial operations in New Jersey. While the company did not research, develop, or manufacture Plavix in California, it does have research and laboratory facilities in California and employs 250 sales representatives there.
Plaintiffs, consisting of both California residents and non-residents, brought suit over adverse consequences from ingesting Plavix. BMS alleged that the court lacked personal jurisdiction over it to adjudicate the claims of the non-resident plaintiffs. The California Supreme Court first looked to whether BMS could be subject to general jurisdiction and held that under the United States Supreme Court’s “at home rule” for general jurisdiction, general jurisdiction could not be asserted over BMS as the company’s activities in California did not meet the standards for general jurisdiction. The appointment of an agent for service of process, when required by state law, could not compel its surrender to general jurisdiction for disputes unrelated to its California transactions. However, the BMS was subject to specific jurisdiction as BMS purposely directed its activities at the forum state, the plaintiffs’ claims arose out of or were related to those forum-directed activities, and the exercise of jurisdiction was reasonable in light of the traditional notions of fair play and substantial justice. It is important to note that the holding “does not render California an all-purpose forum for filing suit against BMS for any matter, regardless of whether the action is related to its forum activities.” The court reiterated that specific jurisdiction is decided on a case-bycase basis and is a fact specific inquiry.
However, based on the Court’s reasoning, the decision opens the doors for any large company with a nationally marketed product and employees in the state could be subject to specific personal jurisdiction in California.