SCOTUS MAKES FORUM SHOPPING HARDER
By: James B. Galbraith with Amanda D. Wright
Many lawsuits today are very expensive to prosecute, often document and expert intensive. This is true of Pharmaceutical Drug cases and Toxic Tort Chemical Exposure cases, to name a few.
With tort reform, certification requirements for a class action plaintiff’s claim now make that status much harder to attain.
Plaintiff attorneys sometimes need a large number of claimants to support and justify the investment of a significant amount of hours, dollars, and expertise. This is most readily demonstrated in recent litigation involving, Plavix, Essure, General Motors Starters, asbestos and silica products, breast implants, MTBE, talcum powder, and Round-Up exposure to name a few.
With the class action vehicle not being so readily available, innovative Plaintiff attorneys have resorted to joining hundreds and even thousands of claimants from all over the country into a single lawsuit.
However, a recent 8-1 decision, by The U. S. Supreme Court is bad news for plaintiff attorneys shopping around the nation for the most advantageous place in which to file their lawsuits. In Bristol-Myers Squibb Co. v. Superior Court of California the Court made it clear that a nonresident defendant must have specific case-linked contacts within a state relating to the subject matter of the lawsuit before a state court can exercise specific personal jurisdiction.
Bristol-Myers Squibb, maker of the blood thinning prescription drug Plavix, was sued by a group of more than 600 plaintiffs in California state court alleging that they had been harmed by Plavix. Bristol-Myers Squibb, a large pharmaceutical company, is incorporated in Delaware, headquartered in New York, and maintains substantial operations in both New York and New Jersey where Plavix was developed. The U. S. Supreme Court noted that Bristol-Myers Squibb does significant business in California, including marketing Plavix, but it did not develop, manufacture, package, or label Plavix from there, and the overall marketing plan and regulatory approval work for Plavix was not done in California.
More than 590 of the plaintiffs were not residents of California. The nonresidents were not prescribed Plavix in the state, did not buy the drug there, and were not injured or treated for alleged injuries in California. The California Supreme Court denied general personal jurisdiction but ruled that the state court had specific personal jurisdiction because the nonresident claims were similar to those of the California resident plaintiffs.
The U.S. Supreme Court reversed and held that the California state court did not have specific personal jurisdiction over the nonresidents’ claims. Allowing the suit to proceed in California without identifying an adequate link or minimum contacts between the state and the nonresidents’ claims would violate the due process clause of the Fourteenth Amendment. In so holding, the Court stated that regardless of Bristol-Myers Squibb’s California activities that are unrelated to the Plavix litigation, the California court cannot claim specific jurisdiction because all of the conduct giving rise to the nonresidents’ claims occurred outside of California. However, the Court left open the question of whether the due process clause of the Fifth Amendment imposes the same restrictions on the exercise of specific personal jurisdiction by a federal court.
As a result of this Supreme Court Opinion, not only must the defendant have sufficient contacts with the State for the court to have the power and authority (jurisdiction) to preside over and ultimately resolve the dispute, but if the lawsuit is not brought in the defendant’s home state or state of principal place of business there must also be a “causal nexus” between the defendant’s contact with the State and each plaintiff’s injury. This will likely result in fewer parties per case, but more lawsuits filed in multiple states. The costs of prosecuting multiple cases in various courts will significantly increase. That will likely result in fewer of these lawsuits being filed.