U.S. Supreme Court Will Hear Case That Could Limit Out-of-State Product Liability Actions
In September, we discussed several new trends in jurisdiction, including an opinion—Bristol-Myers Squibb Co. v. Superior Court of San Francisco County—in which the California Supreme Court held that hundreds of non-California plaintiffs could bring claims under various state laws in the California courts.1 Last Thursday, the U.S. Supreme Court agreed to review that case. With this case, the Supreme Court has the opportunity to answer an important question about the limits of specific jurisdiction, and to curb the ability of mass-tort plaintiffs to consolidate hundreds (or thousands) of out-of-state claims in favored locations that have no connection to the litigation.
The U.S. Supreme Court's 2014 opinion in Daimler AG v. Bauman dealt a significant blow against forum shopping, limiting general jurisdiction over corporate entities to only two locations—the state of incorporation and the state where the company has its principle place of business. But last year, the California Supreme Court issued an opinion that threatened to reinstitute many problematic aspects of the pre-Daimler regime under the guise of specific jurisdiction. In Bristol Myers Squibb, a majority of the state high court found that California courts had specific jurisdiction over the claims of almost 600 out-of-state plaintiffs, even though the actions giving rise to their claims occurred entirely outside California. According to the majority, specific jurisdiction was permissible because the out-of-state plaintiffs were joined with several California plaintiffs whose "claims are based on the same allegedly defective product and the assertedly misleading marketing and promotion of that product, which allegedly caused injuries in and outside the state." The dissent, on the other hand, explained that specific jurisdiction based on "mere similarity and joinder,  expands specific jurisdiction to the point that, for a large category of defendants, it becomes indistinguishable from general jurisdiction."
In reviewing the California Supreme Court’s decision, the U.S. Supreme Court has the opportunity to address the limits of specific jurisdiction, and to make clear that specific jurisdiction cannot be used as an end-run around Daimler. The very fact that the Court has decided to hear the Bristol Myers Squibb appeal is good news for companies that face product liability actions. We will most likely know by the end of June 2017 whether that good news will develop into another strike against forum shopping by the U.S. Supreme Court.
If you have questions about Bristol-Myers Squibb Co. v. Superior Court of San Francisco County, or the U.S. Supreme Court's review of that case, please contact Michelle Corrigan, J. Nicci Warr or the Stinson Leonard Street contact with whom you regularly work.
1. See, "Location, Location, Location: Personal Jurisdiction in Products Liability Lawsuits", J. Nicci Warr, Stinson Leonard Street (Sep. 28, 2016)