On June 19, 2017, the U.S. Supreme Court held where a plaintiff’s claims would be exactly the same even if the defendant had no forum contacts, there is no basis for specific jurisdiction because the case does not sufficiently arise out of or relate to the defendant’s forum activities. Similar to the ruling in BNSF Railway Co. v. Tyrrell, the panel ruled 8-1 to limit forum shopping in the case of Bristol-Meyers Squibb Co. v. Superior Court of California, 528 U.S. __ (2017), No. 16-466 and Justice Sotomayor dissented.
In a previous update, we discussed the U.S. Supreme Court’s decision to address the California Supreme Court’s attempts to widen the limits of specific jurisdiction in Bristol Myers Squibb. The California Supreme Court had found that California courts had specific jurisdiction of the claims of almost 600 out-ofstate plaintiffs against Bristol-Meyers Squibb Co., a global pharmaceutical company incorporated in Delaware and headquarters in New York, even though the actions giving rise to their claims occurred entirely outside of California.
The U.S. Supreme Court held that the exercise of personal jurisdiction must comport with the requirements of the Due Process Clause of the 14th Amendment, which examined whether the defendant had a sufficient relationship with the forum state to subject it to jurisdiction. The Court looked to Daimler AG v. Bauman for the precedent that general personal jurisdiction over corporate entities is essentially limited where the corporation is at home, the state of incorporation and the state where the company has its principal place of business. For specific, or case-linked, jurisdiction, the Court held the suit had to arise out of the defendant’s contacts with the forum state. As such, a connection must exist between the controversy at issue and the state seeking to exercise specific jurisdiction. In Bristol-Meyers Squibb, the relevant plaintiffs were not residents of California, did not claim to have suffered harm in California, nor did any relevant act occur inside California. As such, the case did not sufficiently arise out of or relate to the defendant’s contacts with California for the state to exercise specific jurisdiction.
Similar to her dissent in BNSF Railway Co., Justice Sotomayor delivered a dissent in which she argued that the basis for personal jurisdiction should be whether the defendant has sufficient minimum contacts with a state such that subjecting the defendant to a lawsuit within that state does not offend traditional notions of fair play and substantial justice (the International Shoe Co. v. Washington test). Justice Sotomayor further notes that the majority decision would make it unnecessarily difficult to hold a nationwide corporation liable for acts that harm plaintiffs in different states.
This decision was expected in light of the holding in BNSF Railway Co. v. Tyrrell, where the Supreme Court limited a plaintiff’s ability to forum shop using the standard found in Daimler AG. However, while the Court noted that its decision will not “result in a parade of horribles,” the Court did provide alternatives to how the litigation can still proceed: (1) the in-state and out-of-state plaintiffs could join together in a consolidated action in the states that have general jurisdiction over BristolMeyers Squibb; (2) the nonresident plaintiffs could bring suit in their respective home states; and (3) the Court left open the question of whether the 5th Amendment imposes the same restrictions on the exercise of personal jurisdiction by a federal court.