SCOTUS accepts second case in a week on jurisdictions where businesses can be sued
The U.S. Supreme Court on Thursday agreed to decide whether a pharmaceutical company headquartered in New York can be sued in California by plaintiffs who don’t live there.
The case is the second case granted within a week that raises jurisdictional issues in cases against corporations. At issue is whether Bristol-Myers Squibb must defend claims in California by nonresidents who allege the blood-thinning drug Plavix caused bleeding and strokes. SCOTUSblog, Law.com (sub. req.), Reuters and Courthouse News Service have stories.
According to the cert petition (PDF), Plavix is not made, designed or packaged in California. The California Supreme Court nonetheless ruled that both in-state and out-of-state residents could sue in the state because Bristol-Myers conducts research, sales and marketing there.
According to Law.com, several cert petitions have been filed with the U.S. Supreme Court raising jurisdictional issues, “signaling the increasing concern raised by business groups about being sued in states that have little connection to their products of the underlying dispute.”
The Washington Legal Foundation and the U.S. Chamber of Commerce were among the groups filing amicus briefs urging review in the Bristol-Myers case.
The Chamber warned that the trend of expanded jurisdiction “could well expose corporations that do business nationwide to what amounts to general personal jurisdiction in all 50 states.”
The Washington Legal Foundation maintains the California Supreme Court ignored constitutional limits on state court jurisdiction over out-of-state defendants set in a 2014 Supreme Court case, Daimler AG v. Bauman. The group’s press release is here (PDF). In the Daimler case, the Supreme Court rejected arguments that German-based Daimler AG could be sued in California for a subsidiary’s alleged collaboration in Argentine atrocities.
The case granted on Thursday is Bristol-Myers Squibb v. Superior Court of California. In the other jurisdiction case, the U.S. Supreme agreed to review a Montana Supreme Court decision that allowed out-of-state employees of BNSF Railway to sue in Montana for injuries that occurred outside the state. That case is BNSF Railway v. Tyrell.
