Recently, the Supreme Court made a major ruling on the topic of personal jurisdiction in the case of Bristol-Myers Squibb Co. v. Superior Court of California(“BMS”). Personal jurisdiction refers to the court’s power over the parities in a lawsuit. Personal jurisdiction has and may always be a thorn in the side of plaintiff attorneys.
The doctrine stems back as early as 1878 in the case of Pennoyer v. Neff where the Court held that every state possesses exclusive jurisdiction over persons and things within its boundaries and that no state can exercise direct jurisdiction over persons or things outside of its boundaries. According to Pennoyer, a court can enter a judgment against a non-resident only if the party 1) is personally served with process while within the state or 2) has property within the state, and that property is attached when the suit is filed.
Pennoyer proved to be unworkable as the country became more industrialized and people were able to travel with ease. The Supreme Court recognized these changes in the case of International Show Co. v. Washington. In this case, the Court held that, for a state to exercise personal jurisdiction over a defendant, the defendant must have “such minimum contacts with the state so that exercising jurisdiction over the defendant would not offend traditional notions of fair play and substantial justice.” Even today, International Shoe is the ultimate test for personal jurisdiction. However, what it means to have “minimum contacts” with a state has taken on many different shapes over the years, especially now with the BMS case on the forefront.
The facts of BMS are fairly straightforward. Defendant Bristol-Myers Squibb Company (“BMS”) manufactures anticoagulants-drugs meant to inhibit blood clotting. Seven hundred residents of thirty-three states claimed to have been injured by BMS’s anticoagulant; of these seven hundred, 86 were residents of California and 592 were residents of other states. All residents claimed, among other things, that BMS’s anticoagulant was defective in design or manufacturing, that BMS was negligent, and that BMS deceived them through false advertisement. They filed complaints in the Superior Court of California.
BMS argued that California lacked personal jurisdiction over BMS and thus could not exercise power over BMS to try the out-of-state residents’ case. In support of its argument, BMS showed that it was incorporated in Delaware, had headquarters in New York City, and did most of its business in New Jersey.
Additionally, BMS showed that it did not manufacture, promote, test, label, package or distribute the anticoagulants in California; rather, BMS performed these acts in New York and New Jersey facilities.
The case ultimately made its way to the Supreme Court. The Court held for BMS by a vote of 8-1. Writing for the majority, Justice Alito emphasized that “specific jurisdiction is confined to adjudication of issues deriving from, or connected with, the very controversy that establishes jurisdiction.” If a state has no “legitimate interest” in particular claims, a defendant should not be forced to “submit to the coercive power” of the state with respect to those claims. In other words, for there to be specific jurisdiction, there must be “a connection between the forum and the specific claims at issue.” When there is no such connection, Justice Alito stated that “specific jurisdiction is lacking regardless of the extent of a defendant’s unconnected activities in the State.”
What does this ruling mean for mass tort? What this decision means is that it is going to be much harder for large groups of plaintiffs to sue a corporation in state court for damages caused by a manufacturers’ products. It’s not enough for the defendant to have engaged in some activity in that jurisdiction. Now, mass tort attorneys must show that the plaintiffs’ injuries arose out of the defendant’s contacts with the forum state. Obviously, a defendant’s principal place of business or state of incorporation is enough, as such contacts would confer what is known as “general jurisdiction.” However, what will be enough for specific jurisdiction is yet to be determined. The next few years of mass tort litigation will be telling. While not an extinct animal by any means, mass tort is now a weakened animal.