Supreme Court limits jurisdictional reach of state courts in Plavix class action
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The U.S. Supreme Court ruled Monday that California courts did not have specific jurisdiction to hear the claims of nonresidents in a Plavix class action when those plaintiffs didn’t buy or ingest the drug in the state.
The Supreme Court ruled (PDF) 8-1 in a class action suit that claimed the blood-thinning drug caused bleeding and strokes.
Justice Samuel Anthony Alito Jr. wrote the majority opinion finding that California courts did not have jurisdiction over the nonresidents’ claims against Bristol-Myers Squibb, which is incorporated in Delaware and headquartered in New York.
The company sells and markets Plavix in California, and does research there. The California Supreme Court ruled that, because the nonresident claims were similar to those of California residents, those activities were sufficient.
The U.S. Supreme Court reversed. Allowing the nonresidents’ claims would violate the due process clause, the court held. The state supreme court erred, Alito said, by allowing the suit without identifying an adequate link between the state and the nonresidents’ claims.
The nonresidents weren’t prescribed Plavix in the state, didn’t buy or take the drug there, and weren’t injured by the drug there, Alito said.
The decision concerned specific jurisdiction, which is one of two ways that plaintiffs can establish a defendant has sufficient contact with a state so that courts can exercise personal jurisdiction in a case.
Specific jurisdiction is based on the defendant’s contacts with the state giving rise to the cause of action, while general jurisdiction is based on whether the defendant is “at home” in the state. (Erwin Chemerinsky explains the differences in this ABA Journal article previewing the Bristol-Myers Squibb case.)
Alito said there was no personal jurisdiction over the nonresidents’ claims because they didn’t suffer any harm in the state.
The ruling, he said, “will not result in the parade of horribles that respondents conjure up.” Class actions can still be brought in states with general jurisdiction over Bristol-Myers Squibb—either New York or Delaware, as conceded by the company.
Justice Sonia Sotomayor dissented. “I fear the consequences of the court’s decision today will be substantial,” she wrote. “The majority’s rule will make it difficult to aggregate the claims of plaintiffs across the country whose claims may be worth little alone. It will make it impossible to bring a nationwide mass action in state court against defendants who are ‘at home’ in different states. And it will result in piecemeal litigation and the bifurcation of claims.”
Neal Katyal of Hogan Lovells argued the case for Bristol-Myers Squibb. In a statement, he said his client is hopeful the decision will provide litigants more certainty regarding where lawsuits can be heard. “At its core,” he said, “this decision was about basic principles of federalism and fairness in our legal system.”
The case is Bristol-Myers Squibb Co. v. Superior Court of California.