​​In a decisive 8-1 vote, the U.S. Supreme Court rejected a theory of specific jurisdiction that would allow a state court to assert specific jurisdiction over the claims of out-of-state plaintiffs whose claims were not directly linked with that state. The opinion in the case, Bristol-Myers Squibb Co. v. Superior Court of California, authored by Justice Samuel A. Alito Jr., came down on June 19. Justice Alito explained that neither the similarity of claims between in-state and out-of-state plaintiffs, nor the defendant’s contacts with a state can provide a basis for specific jurisdiction. Rather, the Court reaffirmed that “specific jurisdiction is confined to adjudication of issues deriving from, or connected with, the very controversy that establishes jurisdiction.”

Jurisdictional Developments

A state court’s jurisdiction extends to all controversies in which it may issue a binding judgment on the defendant. Over the years, the Court has defined two forms of jurisdiction a state may assert—general and specific. General jurisdiction is typically proper if the defendant is closely connected with the state. Specific jurisdiction is proper if the claims are related to the defendant’s conduct within that state.

In recent years, the Court has clarified both of these standards to limit state jurisdictional authority. In both the Goodyear Dunlop Tires Operations v. Brown and Daimler AG v. Bauman cases, the Court limited a state’s assertion of general jurisdiction to defendants that are either incorporated or have their principal place of business within that state. Then, in Walden v. Fiore, the Court tightened the standard for a state’s assertion of specific jurisdiction, clarifying that a defendant’s contacts with a state-resident plaintiff cannot serve as the sole connection between that state and that defendant.

Background on the Decision

In 2013, 659 plaintiffs brought claims against Bristol-Myers Squibb Company, alleging that they suffered harm by using Plavix—a drug manufactured and sold by BMS. The plaintiffs—which included 575 non-Californians—brought these claims in California Superior Court. BMS challenged the Superior Court’s jurisdiction to adjudicate the claims of the non-residents. The Superior Court ruled that it could assert both general and specific jurisdiction over BMS, and BMS appealed.

The California Appellate Court initially affirmed the Superior Court, but later reversed its general jurisdiction determination in light of the Supreme Court’s decision in Daimler. BMS appealed the Appellate Court’s affirmance of the specific jurisdiction determination to the California Supreme Court. The California Supreme Court affirmed, explaining that specific jurisdiction over non-resident claims against BMS was proper because “BMS’s forum contacts, including its California-based research and development facilities, are substantially connected to the nonresident plaintiffs’ claims because those contacts are part of the nationwide marketing and distribution of Plavix, a drug BMS researched and developed, that gave rise to all the plaintiffs’ claims.”

The Supreme Court’s Decision

In a much anticipated decision, the Supreme Court reversed the California Supreme Court, reaffirming the principle that specific jurisdiction can only be asserted when there is a direct connection between the asserted claims and the defendant’s conduct within the forum state. In straightforward prose, the Court explained that “[w]hat is needed [for specific jurisdiction to be proper]—and what is missing here—is a connection between the forum and the specific claims at issue.” The Court rejected the California Supreme Court’s evaluation of the defendant’s general contacts with the state for the purposes of finding specific jurisdiction. Justice Alito directly rebuffed this approach as “difficult to square with our precedents” and “resembl[ing] a loose and spurious form of general jurisdiction.” Further, the Court was unpersuaded that the effect on mass action claims merited a different outcome. Justice Alito explained that the “decision does not prevent the California and out-of-state plaintiffs from joining together in a consolidated action in the States that have general jurisdiction over BMS.” Interestingly, the Court concluded with an explicit statement that its ruling did not address “whether the Fifth Amendment imposes the same restrictions on the exercise of personal jurisdiction by a federal court.”

In lone dissent, Justice Sonia Sotomayor criticized the Court’s opinion as insulating nationwide corporations from consolidated mass actions, and forcing piecemeal litigation.

The Takeaways

On the whole, the Bristol Myers-Squibb decision is more significant for what it rejected than for what it held. The California Supreme Court’s decision was viewed by many as a sideways challenge to the Court’s recent restriction of general jurisdiction, which limited its exercise to a defendant’s home court. The California Supreme Court’s analysis opened the door to exercising specific jurisdiction over defendants with strong ties to a forum. In this opinion, the Supreme Court unequivocally shut that door, consolidating its recent shifts on personal jurisdiction.

Justice Sotomayor’s dissent, in addition to concluding that specific jurisdiction was proper in this case, dropped a footnote addressing California’s capacity to exercise general jurisdiction (an issue not before the Court) and expressing skepticism of the Court’s post-Daimler analysis, writ large. However, given the 8-1 vote, Justice Sotomayor’s favored approach seems destined for dissent in the foreseeable future.

The majority opinion and the dissent did agree on at least one thing: going forward, there is no question that state court mass actions with nationwide plaintiffs are limited to a forum that can exercise general jurisdiction—i.e. a defendant’s home state. This fact may limit a defendant’s exposure to certain state law causes of action, and will certainly reduce the instances in which a defendant is forced to litigate in an unfamiliar forum.

One remaining question for defendants and plaintiffs alike is whether the jurisdiction of federal courts is equally limited under the Fifth Amendment. Although largely settled in the minds of most practitioners and judges, the Supreme Court has never formally held that federal district courts cannot exercise personal jurisdiction based on a defendant’s nationwide contacts. With the majority’s express reservation of this question—and its portentous citation to a thirty year-old case reserving the same question—there is reason to think that the Supreme Court will continue to modify the standards for determining personal jurisdiction going forward.

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