In August 2016, the Supreme Court of California issued its decision in Bristol-Myers Squibb v. Superior Court, which – as detailed more fully in our earlier post – features an expansive interpretation of specific personal jurisdiction that is difficult to reconcile with the U.S. Supreme Court’s general personal jurisdiction decisions in Goodyear Dunlop Tires Operations, S.A. v. Brown, 131 S. Ct. 2846 (2011) and Daimler AG v. Bauman, 134 S. Ct. 746 (2014). Those decisions significantly limited the exercise of general personal jurisdiction over defendant corporations to their state of incorporation and principal place of business unless “exceptional circumstances” exist.
The Bristol-Myers decision appears to find a loophole in that precedent through its broad interpretation of specific personal jurisdiction. Specifically, under Bristol-Myers, a defendant corporation that is not subject to general personal jurisdiction in California can nonetheless be sued there for claims that undisputedly do not arise from its contacts in the state, as long as the subject matter is at least nebulously connected to those contacts. This decision presents particularly meaningful risk to players in the retail industry in light of California’s consistent ranking as one of the worst forums for litigation in the country.
Bristol-Myers has since petitioned the U.S. Supreme Court for a writ of certiorari. The Respondents filed their opposition brief brief just last week.
In broad terms, Bristol-Myers’s briefing focuses on two themes: (1) a “deep and acknowledged” split in the lower courts on the meaning of “relatedness” for the purpose of the specific personal jurisdiction analysis, and (2) the conflict between the Supreme Court of California’s decision and existing U.S. Supreme Court precedent. With respect to the first, Bristol-Myers emphasizes the need for the court’s intervention to prevent “jurisdictional gamesmanship by plaintiffs” and to allow “predictability for entities that do business in the State.” With respect to the second, Bristol-Myers asserts that the decision will render Daimler “a dead letter for any company that does substantial business in California or markets its products nationally.”
The Respondents take a far more narrow view of the Bristol-Myers decision, and thus, argue against the need for the U.S. Supreme Court’s involvement. They first argue that there is no such split in the lower courts for the high court to resolve. They argue that none of the cases on which Bristol-Myers relies reject the assertion of jurisdiction on similar facts. None feature a fact pattern in which “the same nationwide marketing and distribution activities” give rise to both the residents’ and non-residents’ claims. None feature a defendant with the same scope of related in-state activities as those maintained by Bristol-Myers in California. And none feature a mass action in which “the non-resident defendant is indisputably subject to the personal jurisdiction of the forum’s courts for some plaintiffs; all the plaintiffs bring essential identical claims; and the non-resident defendant will inevitably be a party to the litigation of the claims of the non-residents.”
They further argue that the unique facts of the case and the California Supreme Court’s fact-intensive analysis betray Bristol-Myers’s assertion that Daimler will become a “dead letter” should the decision stand.
A review of the parties’ briefing highlights significant questions for companies in the retail industry should the U.S. Supreme Court deny the petition and thereby allow the decision to stand as controlling law in California. For example, what is a “nationwide marketing and distribution” scheme for purposes of this analysis? How is it defined? How is the court’s analysis impacted by the fact that this particular case involves mass litigation, coupling hundreds of non-resident claims with those of the California claimants? Would the analysis be the same if a single non-resident plaintiff had filed the suit against Bristol-Myers in California?
We will continue to monitor this case as it works its way through the U.S. Supreme Court and keep you apprised of any answers to these and many other questions raised by the Bristol-Myers decision.