Over the past week, we received two new decisions from our readers. This post is about the first of them (there's an internal hang-up with the other, that we hope will clear up shortly).
The first case sent to us is In re Plavix Related Cases, 2014 WL 3928240 (Ill. Cir. Cook Co. Aug. 11, 2014), concerning post-Bauman personal jurisdiction, and specifically the impending demise of litigation tourism. This Plavix decision is a welcome counterpoint to the absurd and abusive California decision – also about Plavix litigation tourism – that we blogged about last week in our “Hotel California” post. Unlike the California court, the Illinois decision didn’t go along with the plaintiffs’ effort to reassemble pre-Bauman “continuous and substantial” precedent under the guise of “minimum contacts” jurisdiction.
The Illinois Plavix decision arose from coordinated proceedings involving 502 Plavix plaintiffs in Cook County (Chicago), Illinois – 486 of which were non-Illinois litigation tourists. By “litigation tourist” we mean non-resident plaintiffs whose claims also had nothing to do with the state in which they sued. At this point, some of you may be asking, “what about CAFA?” Well, we don’t know either, but we have to assume that plaintiffs were intelligent enough: (1) to file complaints with fewer than 100 plaintiffs, and (2) not to do anything that smacked of seeking consolidation for trial.
Back to the main story. The only fact that the non-Illinois plaintiffs offered was that the defendants sold a lot of Plavix ($1.7 billion worth) to persons, unlike them, who actually resided in Illinois. 2014 WL 3928240, at *1. Other than that, none of the defendants was either incorporated of had a principal place of business in Illinois. Whatever other contacts the defendants had with Illinois (branch offices with a few employees) had nothing to do with these plaintiffs’ claims. Id.
In short, Plavix presented the same sort of situation as Bauman – a large company being sued in-state solely because of a volume of business commensurate with the overall size of the enterprise. That’s not enough according to the Supreme Court, as we discussed here.
The Cook County mass torts judge agreed. First, there was no waiver of the personal jurisdiction issue. Plavix, 2014 WL 3928240, at *6. Timing can be a big deal, because challenges to personal jurisdiction are easily waived if not brought early in litigation.
Second, there could be no general jurisdiction under Bauman. “International relations” was not a basis for distinguishing Bauman(which it refers to as “Daimler”):
Daimler is binding precedent from the United States Supreme Court which this Court is bound to follow. . . . [T]he Court in Daimler made clear that the general jurisdiction rule in set forth in Goodyearapplied to foreign corporation from “sister state[s].” Accordingly, the Court will apply the holding of Daimler to the present case.
Plavix, 2014 WL 3928240, at *6 (emphasis added). UnderBauman, “jurisdictional formulations” that would “permit general jurisdiction over [a corporation] in every other State in which [its] sales are sizable” are “unacceptably grasping.” Id. (Bauman cites and quotation marks omitted).
The only exception to Bauman’s state of incorporation/principal place of business rule is for “exceptional” situations similar toPerkins v. Benguet Consol Mining Co., 342 U.S. 437 (1952), in which a corporation “was essentially headquartered in [a different place] on an interim basis.” Plavix, 2014 WL 3928240, at *7. There is no analogy between Perkins and today’s litigation tourism:
In the present case, by contrast, Plaintiffs claim that Defendants should be subject to general jurisdiction in Illinois because Defendants have retained an Illinois agent for service of process, occupied buildings in Illinois, and employed Illinois residents. Defendants’ Illinois contacts are far from exceptional. To the contrary, these are contacts which would be typical of a corporation doing business in any state. Plaintiffs’ suggestion that Defendants’ substantial Illinois sales revenue justifies imposing general jurisdiction on Defendants warrants special attention because a similar argument was raised and rejected in Daimler. . . . Plaintiffs’ jurisdictional framework, taken to its logical conclusion, would produce exactly that forbidden result: national general jurisdiction in every state in which Defendants are doing business and generating sales revenue. Daimler makes clear that such an approach to general jurisdiction does not comport with due process.
Id. (emphasis added).
Third, there wasn’t any specific jurisdiction in Plavix either. The court considered the “Hotel California” decision and specifically rejected it as “unpersuasive” – finding it based on a “substantial connection test” that did not exist in Illinois. Plavix, 2014 WL 3928240, at *8. The Plavix court was being nice – personal jurisdiction is a constitutional question, so the California quirk cited was a fig leaf. The California court simply got it wrong:
[T]o satisfy the second factor of the specific jurisdiction analysis, the plaintiff's claim must directly arise out of the contacts between the defendant and the forum. . . . [T]he [necessary] relationship between the plaintiff's claim and the defendant’s forum contacts exists where (1) the plaintiff’s claim would not have occurred but for the defendant’s forum activities and (2) the defendant’s forum conduct gave birth to the cause of action.
Id. (citations and quotation marks omitted). With respect to litigation tourists, with no domiciliary or injury-related ties to Illinois, the court instead found the specific jurisdictional analysis in Glater v. Eli Lilly & Co., 744 F.2d 213, 216 (1st Cir. 1984), more appropriate. Plavix, 2014 WL 3928240, at *9:
Plaintiffs in the present case are individuals who (1) ingested a drug in one state; (2) were allegedly harmed by the drug in that state, and (3) then filed suit for injuries caused by the drug in a different state where the drug is also distributed. . . . [T]he injuries suffered by Plaintiffs’ in the present case do not arise from Defendants’ Illinois contacts. The non-Illinois Plaintiffs claim they were injured when they ingested Plavix in their home states. Likewise, Plaintiffs’ claims do not relate to Defendants’ Illinois contacts. While Defendants established a large business network to facilitate the distribution of Plavix in Illinois, Plaintiffs have failed to establish any causal or logical link between their claims and Defendants’ Illinois operations. Accordingly, Plaintiffs have failed to satisfy the second factor of the specific jurisdiction analysis. This failure is fatal to Plaintiffs' jurisdictional argument.
Id. Because neither of the first two prongs of specific jurisdiction were met, whether exercising jurisdiction was otherwise “reasonable” never came into play. Id.
Plavix also refused to retain “pendent” personal jurisdiction under the ruse of a “common fact scheme.” Such jurisdiction was neither procedurally proper nor would it further “judicial economy, avoidance of piecemeal litigation, and overall convenience of the parties.” Id.
The bottom line on personal jurisdiction in Plavix was that “All non-Illinois Plaintiffs' cases are hereby DISMISSED” – 486 out of 502. That's good news. If Bauman can clear out the litigation tourists in Cook County, it can do so elsewhere.
While we’re on the question of personal jurisdiction, it’s probably a good idea to add the transcript of the personal jurisdiction hearing in Halliburton v. Johnson & Johnson, Inc., CJ-13-299, Transcript(Ok. Cir. Pottawatomie Co. June 17?, 2014), which we've had kicking around here for some time. Facing some 700 litigation tourists, the Oklahoma Court came to essentially the same conclusion as Plavix – that personal jurisdiction was precluded byBauman:
[T]he Court is unconvinced at this particular time that the specific jurisdiction for the non-Oklahoma plaintiffs has been shown sufficiently for the Court to grant personal jurisdiction of those persons and be the order of the Court . . . that the motion . . . to dismiss the non-Oklahoma plaintiffs for lack of personal jurisdiction is granted.
Transcript at 23-24. This is the same case the the Washington Legal Foundation blogged about here, and you can learn the case’s backstory on the WLF site. What we’re adding is the actual transcript of the hearing at which the litigation tourists were dismissed.
We hope to be in a position to tell you about the other case tomorrow (it's also a favorable result). In any event, keep those defense wins coming!