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JAMES M. BECK is Counsel resident in the Philadelphia office of ReedSmith. He is the author of, among other things, Drug and Medical Device Product Liability Handbook (2004) (with Anthony Vale). He wrote the seminal law review article on off-label use cited by the Supreme Court in Buckman v. Plaintiffs Legal Committee. He has written more amicus briefs for the Product Liability Advisory Council than anyone else in the history of the organization, and in 2011 won PLAC's highest honor, the John P. Raleigh award. He has been a member of the American Law Institute (ALI) since 2005. He is the long-time editor of the newsletter of the ABA's Mass Torts Committee.  He is vice chair of the Class Actions and Multi-Plaintiff Litigation SLG of DRI's Drug and Device Committee.  He can be reached at jmbeck@reedsmith.com.  His LiinkedIn page is here.

hampWhat follows is a collaborative effort between Bexis and Reed Smith‘s Kevin Hara, who helped research and write this post.  It’s not really a guest post, but Kevin had such a large hand in it that his contribution deserves to be separately acknowledged.

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As attorneys, we are fond of rules:  they give us structure, define boundaries sometimes both literally in a physical sense and figuratively in a nonphysical – but no less fundamental – way.   Nearly four years have elapsed since the Supreme Court crystallized the limitations on general personal jurisdiction in the landmark case Daimler AG v. Bauman, 134 S. Ct. 746 (2014) (“Bauman”), whose praises we have lauded, here, here, and here.  We followed Bauman, a case near and dear to the hearts of litigators on the right side of the “v.”, because it dealt a significant blow to the litigation tourism that has multiplied over recent years by confining general jurisdiction to the places in which a nonresident defendant is “at home.”  Nonetheless, plaintiffs’ attorneys have attempted to stretch that definition in a number of ways, including arguing for general jurisdiction based on judicial estoppel, waiver, and alter ego, as we explained here and here.

Those arguments are largely fact- and case-specific.  Another argument plaintiffs have asserted post-Bauman, however, is not, and is therefore of greater concern.  That is the issue of consent-based jurisdiction through a corporation’s registration to do business – which is mandatory in all 50 states.  Thus, general jurisdiction by “consent” based simply on registration to do business/appointment of an agent for service of process has the potential to be every bit as “grasping” and “exorbitant” as the general jurisdiction theories rejected in Bauman itself.  Because of this, under Bauman’s due process principles, such registration requirements should not subject nonresident defendants to all-purpose jurisdiction.  Thankfully, in most states, it does not.  As discussed in much greater detail below, we believe the following states gave rejected general jurisdiction by consent based on state registration statutes:

Alaska, Arizona, Arkansas, California, Colorado, Connecticut, Delaware, District of Columbia, Florida, Idaho, Illinois, Indiana, Louisiana, Maine, Maryland, Massachusetts, Michigan, Mississippi, Missouri, Montana, Nevada, New Hampshire, New Jersey, New Mexico, New York, North Carolina, North Dakota, Ohio, Oklahoma, Oregon, Rhode Island, South Carolina, South Dakota, Texas, Utah, Vermont, the Virgin Islands, Washington, West Virginia, and Wisconsin.

In a few jurisdictions, precedent exists that (at least so far) allows foreign corporations that have registered to do business to be haled into court even for claims unrelated to any in-state activity.  While this precedent was not directly addressed by Bauman, it contravenes the principles underlying Bauman, not to mention opening the door wide for forum shopping, improper litigation tourism, and other forms of gamesmanship that strain what we consider the bounds of fair play.

Sports, much like the practice of law, has its own rules designed to ensure fair play and impose important limits on the particular game at issue.  One prime example is discussed in “The Common Law Origins of the Infield Fly Rule,” 123 U. Pa. L. Rev. 1474 (1975).  For attorneys who lament some of the tactics that still stretch the bounds of legal rules and regulations and are baseball aficionados, consider the Official Rules of Major League Baseball (“MLB”) Rule 7.08 “Retiring a Runner,” and its inherent flexibility and vulnerability.  Our focus on the territorial limits to jurisdiction recognized and applied by Bauman’s holding and due process reminds us about a recent article that discussed a trick play in a high school championship game known as “The Play That Broke Baseball,” dubbed “Skunk in the Outfield.”  The play, like consent to jurisdiction through registration, exceeded the bounds of sportsmanship, but did not at the time technically break the rules.

As always, we start with the applicable rule, in this case Official MLB Rule 7.08, which proscribes the baseline for a runner. According to Rule 7.08, any runner is out when:

(a)(1) He runs more than three feet away from his base path to avoid being tagged unless his action is to avoid interference with a fielder fielding a batted ball.  A runner’s base path is established when the tag attempt occurs and is a straight line from the runner to the base he is attempting to reach safely; or

(2) after touching first base, he leaves the base path, obviously abandoning his effort to touch the next base.

MLB Rule 7.08.  The key portion of the rule is the second sentence of subsection (a)(1), which sets the base path, which is “established when the tag attempt occurs and is a straight line from the runner to the base he is attempting to reach safely.”   Thus, there is no base path if no player is attempting to tag the runner, who can go anywhere – even into the outfield – which is precisely what happened in Skunk In The Outfield (“Skunk”).  The above referenced article provides a fascinating depiction of the entire play, which took 2 minutes and 32 seconds, an eternity for a baseball play.  For instance, a very fast runner can traverse the 90 feet from home plate to first base in under 4 seconds, and circle the bases on a home run in fewer than in 14.  Even the longest plays, such as a rundown (when a runner becomes trapped between two bases) typically lasts less than 20 seconds.  Of course, the games themselves may take upwards of four hours, especially in the American League, which includes the unfortunate Designated Hitter rule.

But back to the play.  The team that unleashed Skunk did so in order to entice the defense into a rundown with base runners at the first and third, in order to steal a run, by allowing the runner on third to score during the confusion.  The problem with Skunk is that the rules allow it, and while Skunk would never happen in MLB, the exploitation of the rule in a state championship game denigrated the game, caused both teams to spend an extremely long, frustrating amount of time on the maneuver, raised the ire of players, officials and spectators, and ultimately, failed to work.  This begs the question whether, even if such a ploy is not against the rules, should it be prohibited by something else, such as fundamental fairness?

The same can be said about general jurisdiction by consent through registration, many large corporations conducting business throughout the country register in all 50 states.  A century-old Supreme Court case, Pennsylvania Fire Insurance Co. v. Gold Issue Mining & Milling Co., 243 U.S. 93 (1917), allowed general jurisdiction by consent under the old in rem-based jurisdictional standards that were overturned beginning with International Shoe Co. v. Washington, 326 U.S. 310, 316 (1945) (overruling Pennoyer v. Neff, 95 U.S. 714 (1878)).  Since large corporations have to be registered to do business in every state, allowing jurisdiction by consent under Pennsylvania Fire would result in their being subject to suit everywhere for anything – a jurisdictional skunk theory that would permit, under a different name, precisely what Bauman rejected.  As Bauman itself cautioned, cases “decided in the era dominated by Pennoyer’s territorial thinking . . . should not attract heavy reliance today.”  134 S. Ct. at 761 n.18.

As we discussed at length, the Second Circuit succinctly explained why the general jurisdiction by consent theory is a skunk in Brown v. Lockheed-Martin Corp., in holding that Bauman precluded a nonresident corporation’s business registration from ipso facto equating to general jurisdiction:

If mere registration and the accompanying appointment of an in state agent − without an express consent to general jurisdiction − nonetheless sufficed to confer general jurisdiction by implicit consent, every corporation would be subject to general jurisdiction in every state in which it registered, and [Bauman’s] ruling would be robbed of meaning by a back‐door thief.

814 F.3d 619, 640 (2d Cir. 2016) (applying Connecticut law) (emphasis added).  Brown crystallized one of the problems with both consent by registration and Skunk In The Outfield – each represents an attempt to gain an advantage on the other side by exploiting the system.  However, even the team that utilized Skunk became embarrassed over the play, as the crowd became derisive, the play ultimately accomplished nothing, and even the coach who called the play never used it again.  In other words, sometimes, the ability to take a particular action may not explicitly break the rules, but nonetheless should be prohibited.  That is the reason most states have declined to allow general jurisdiction are merely by a defendant’s registration to do business in a given forum.

Attorneys on the other side of the “v.,” however, haven’t been as easily embarrassedas baseball players.

Thus, a lot of law exists on the concept of jurisdiction by consent.  We have a cheat sheet collecting the favorable cases here.  Overall, the vast majority of states – 38 (plus DC and VI)  – have rejected the theory that a nonresident defendant may be subject to general jurisdiction simply by registering to conduct business through judicial decision or by statute, while in only 4 (Iowa, Minnesota, Nebraska, Pennsylvania) does current precedent continue to support that suspect argument, with the outcome being unclear in the other 8 (Alabama, Georgia, Hawaii, Kansas, Kentucky, New Hampshire, Tennessee, Virginia, and Wyoming).  Notably, the highest courts in California, Colorado, Delaware, Illinois, Maryland, Michigan, Missouri, New Mexico, Nevada, North Carolina, Ohio, Oregon, and Wisconsin have rejected such arguments, with seven of those occurring post-Bauman.

The overwhelming number of state and federal decisions issued after Bauman, which we have tracked here, shows an unmistakable trend against subjecting a nonresident defendant to a state’s general jurisdiction through registration for business.   In other words, although the Supreme Court has yet to issue the final verdict on this subject, things are moving in the right direction with more courts slamming the back door on the would be thief, and exterminating any potential “Skunk In The Outfield.”

Alabama

Neither Alabama’s corporate registration statutory framework, nor its cases, provide a clear answer on this issue.  See, e.g. Ala. Code § 10A-1-5.31.  However, a pre-Bauman district court opinion suggested that general jurisdiction based solely on consent through registration was sufficient.  Johnston v. Foster-Wheeler Constructors, Inc., 158 F.R.D. 496, 501 (M.D. Ala. 1994).  A post-Bauman case disagrees. Roper v. CNU of Alabama, 2017 WL 3334876, at *2 (N.D. Ala. Aug. 4, 2017) (being “registered to do business in Alabama . . . alone is insufficient for the court to exercise general jurisdiction”).  It’s hard to say how Alabama law comes down on this issue.

Alaska

Alaska’s registration statute provides no guidance on in this issue, and the cases are mostly unhelpful.  However, in Stephenson v. Duriron Co., 401 P.2d 423 (Alaska 1965), the court suggested that a prior version of the registration statute required a nonresident defendant to register to conduct business but did not “purport to define those activities which may subject a foreign corporation” to the jurisdiction of Alaska courts.  Id. at 424.  Thus, transacting business alone likely does not suffice for consent in Alaska.

Arizona

In Arizona, a post-Bauman appellate court decision held that registration to do business does not subject a foreign jurisdiction to general jurisdiction “either by prescription or consent,” because the defendant cannot “fairly . . . waive its due process rights when . . . the statute[]” provides no such notice.  Wal-Mart Stores, Inc. v. Lemaire, 395 P.3d 1116, 1119 (Ariz. App. 2017); but see Bohreer v. Erie Insurance Exchange, 165 P.3d 186, 187-92 (Ariz. App. 2007) (upholding general jurisdiction without minimum contacts and stating consent-by-registration satisfies due the process; “agree[ing]” with now overruled (see Delaware) Sternberg decision).  Lemaire declined to overrule Bohreer, but the former post-dates Bauman, it is the more current and more likely approach that Arizona’s Supreme Court would follow.

Arkansas

The Arkansas Code explicitly provides that “[t]he appointment or maintenance in this state of a registered agent does not by itself create the basis for personal jurisdiction over the represented entity in this state.”  Ark. Code Ann. § 4-20-115. See also Pearrow v. National Life & Accident Insurance Co., 703 F.2d 1067, 1069 (8th Cir. 1983) (appointment of an agent for service of process does not create general personal jurisdiction) (applying Arkansas law); Antoon v. Securus Technologies, Inc., 2017 WL 2124466, at *3 (W.D. Ark. May 15, 2017) (“express” statutory limitation precludes general jurisdiction by consent, because “an exception that is so large as to swallow the rule here would [not] be a natural or fair reading of these statutes”); but see Basham v. American National County Mutual Insurance Co., 2015 WL 1034186, at *4 (W.D. Ark. March 10, 2015) (allowing general jurisdiction by consent under Knowlton (see Minnesota).  Arkansas seems solid against general jurisdiction by consent.

California

In California, consent to jurisdiction through registration to do business equates to consent to service of process only, but has no consequence for personal jurisdiction. See, e.g. Bristol-Myers Squibb Co. v. Superior Court, 377 P.3d 874, 884 (Cal. 2016) (“a corporation’s appointment of an agent for service of process, when required by state law, cannot compel its surrender to general jurisdiction for disputes unrelated to its California transactions”), overruled on other grounds, ___ U.S. ___, 137 S. Ct. 1773 (2017).  See also DVI, Inc. v. Superior Court, 128 Cal. Rptr.2d 683, 694 (Cal. App. 2002) (“designation of an agent for service of process and qualification to do business in California alone are insufficient to permit general jurisdiction”) (pre-Bauman); Gray Line Tours v. Reynolds Electric. & Engineering Co., 238 Cal. Rptr. 419, 421 (Cal. App. 1987) (same); Am Trust v. UBS AG, 681 Fed.Appx. 587, 589 (9th Cir. 2017) (affirming dismissal, consent to jurisdiction not required of corporations registering to do business); L.A. Gem & Jewelry Design, Inc. v. Ecommerce Innovations, LLC, 2017 WL 1535084, at *5 (C.D. Cal. April 27, 2017) (“Designation of an agent for service of process in California, alone, is not enough to show general jurisdiction.”); Lindora, LLC v. Isagenix International, LLC, 198 F. Supp.3d 1127, 1136-37 (S.D. Cal. 2016) (no general personal jurisdiction despite defendant registered to do business in California); American Insurance Co. v. R&Q Reinsurance Co., 2016 WL 5930589, at *2 (N.D. Cal. Oct. 12, 2016) (same); Angelini Metal Works Co. v. Hubbard Iron Doors, Inc., 2016 WL 6304476, at *3 (C.D. Cal. Jan. 5, 2016) (same); Freeney v. Bank of America Corp., 2015 WL 12535021, at *41 (C.D. Cal. Nov. 19, 2015) (rejecting general jurisdiction based on registration or appointment of agent for service of process); Henderson v. United Student Aid Funds, Inc., 2015 WL 12658485, at *4 (S.D. Cal. April 8, 2015) (no general personal jurisdiction despite defendant registered to do business in California); Overhill Farms Inc. v. West Liberty Foods LLC, 2014 WL 4180920, at *4 (C.D. Cal. Aug. 21, 2014) (“while it is relevant that Defendant may be registered to do business and has designated an agent for service of process in California, these acts alone are insufficient to support a finding of general jurisdiction”).

Colorado

After Bauman, the Colorado Supreme Court held that, although a defendant foreign corporation “ha[d] a registered agent in Colorado,” nonetheless “the record in this case does not support a finding that general jurisdiction over [defendant] is appropriate.”  Magill v. Ford Motor Co., 379 P.3d 1033, 1038-39 (Colo. 2016).  See also Allied Carriers Exchange, Inc. v. Alliance Shippers, 1999 WL 35363796, at *5 (D. Colo. Sept. 22, 1999) (“appointment of a registered agent . . . alone cannot reasonably be characterized as purposeful, continuous, and systematic” so as to create general jurisdiction). Magill thus nullifies the unfavorable pre-Bauman dictum in Packaging Store, Inc. v. Leung, 917 P.2d 361, 363 (Colo. App. 1996).

Connecticut

The Second Circuit Court of Appeals in Brown v. Lockheed-Martin Corp., rejecting the consent through registration argument in an asbestos case, interpreting the Connecticut statute not to permit such jurisdiction in order to avoid declaring the statute unconstitutional.  814 F.3d 619, 636-37 (2d Cir. 2016), affirming Brown v. CBS Corp., 19 F. Supp.3d 390, 397 (D. Conn. May 14, 2014).  Pre-Bauman state court cases had ruled otherwise, see Talenti v. Morgan & Brother Manhattan Storage Co., 968 A.2d 933, 941 (Conn. App. 2009); Lake Road Trust, LTD. v. ABB, Inc., 2011 WL 1734458, at *6 (Conn. Super. April 11, 2011), but in light of Brown, it would be unusual for Connecticut state courts to follow a contrary path.

Delaware

The Delaware Supreme Court was one first post-Bauman state high courts to foreclose any argument that a nonresident Corporation could be subjected to general jurisdiction merely by registering to do business.  Genuine Parts Co. v. Cepec, 137 A.3d 123 (Del. 2016).  Cepec held that Delaware’s registration statute “as requiring a foreign corporation to allow service of process to be made upon it in a convenient way in proper cases, but not as a consent to general jurisdiction,” in accordance with Bauman and “common sense.”  Id. at 142-43.  Prior, contrary precedent was overruled.  Id. at 141-42 (rejecting Sternberg v. O’Neil, 550 A.2d 1105, 1108-12 (Del. 1988), and Continental Casualty Co. v. American Home Assurance Co., 61 F. Supp.2d 128, 12930 (D. Del. 1999)). See AstraZeneca AB v. Mylan Pharmaceuticals, Inc., 72 F. Supp. 3d 549, 556 (D. Del. 2014) (“compliance with Delaware’s registration statutes . . . cannot constitute consent to jurisdiction”), aff’d on other grounds, 817 F.3d 755 (Fed. Cir. 2016).

District of Columbia

The current District of Columbia statute provides that “[t]he designation or maintenance in the District of a registered agent shall not by itself create the basis for personal jurisdiction.”   D.C. Code §29-104.02 (2013).  See Freedman v. Suntrust Banks, Inc., 139 F. Supp.3d 271, 279-80 (D.D.C. 2015) (general jurisdiction based on registration and agent for service of process “explicitly foreclose[d]” by Bauman because it would subject defendant to jurisdiction in multiple fora; prior precedent no longer valid); Kuennen v. Stryker Corp., 2013 WL 5873277, at *4 (W.D. Va. Oct. 30, 2013) (a defendant’s “business certificate and appointed agent . . . are not independent support for general jurisdiction − the principles of due process require a firmer foundation than mere compliance with state domestication statutes”) (applying District of Columbia law).  Under a prior statute, In re FTC Corp. Patterns Report Litigation, 432 F. Supp. 274, 286 (D.D.C. 1977), allowed mere service on a registered agent to invoke general jurisdiction, although modern terminology was not used.  Under the current D.C. statute, that doesn’t happen.

Florida

In Magwitch, LLC v. Pusser’s West Indies Ltd., 200 So. 3d 216 (Fla. App. 2016), the court was “not persuaded” that registration to business was a basis for general personal jurisdiction, holding that “Pennsylvania Fire has yielded to the two-prong analysis for long-arm jurisdiction set forth in recent decades by the Supreme Court.”  Id. at 218.  Accord Rizack v. Signature Bank, N.A., 2017 WL 5197917, at *3-4 (Fla. Cir. March 20, 2017) (following Sofrar).  Likewise, federal courts both pre- and post-Bauman have repeatedly declined to rule that registration and appointment of an agent for service is a valid basis for general jurisdiction over a nonresident defendant.  See, e.g., Consolidated Development Corp. v. Sherritt, Inc., 216 F.3d 1286, 1293 (11th Cir. 2000) (“Courts of appeals that have addressed this issue have rejected the argument that appointing a registered agent is sufficient to establish general personal  jurisdiction over a corporation”); Hinkle v. Continental Motors, Inc., 2017 WL 3333120, at *10 (M.D. Fla. July 21, 2017) (being “registered to do business here . . . alone is insufficient to confer jurisdiction”); PHD@Western, LLC v. Rudolf Construction Partners, LLC, 2016 WL 5661637, at *4 (S.D. Fla. Sept. 30, 2016) (rejecting registration as basis for general jurisdiction); Erwin v. Ford Motor Co., 2016 WL 7655398, at *12 (M.D. Fla. Aug. 31, 2016) (consent through registration does not warrant “exercise of jurisdiction [because it fails to] . . . satisfy the Due Process Clause”); Evans v. Andy & Evan Industries, Inc., 2016 WL 8787062, at *3 (S.D. Fla. July 15, 2016) (registration to do business, even with other contacts, insufficient to support general jurisdiction); Royal Acquisitions 001, LLC v. Ansur America Insurance Co., 2015 WL 1437689, at *4 (S.D. Fla. March 27, 2015) (registration to do business and appointment of a registered agent “are not so continuous and systematic as to render Defendant essentially at home”); Recao v. Bell Helicopter Textron, Inc., 2014 WL 12595302, at *4 (S.D. Fla. Sept. 23, 2014) (rejecting both registration and agent for service as basis for general jurisdiction); Mio, LLC v. Valentino’s, Inc., 2013 WL 3364392, at *6 (M.D. Fla. July 3, 2013) (an “agent to accept service of process . . ., standing alone, does not meet the general jurisdiction requirement”); In re Farmland Industries, Inc., 2007 WL 7694308, at *12 (M.D. Fla. March 30, 2007) (“agree[ing] with those cases holding that registering to do business and appointing a registered agent in the state of Florida, without more, does not subject a foreign corporation to the general personal jurisdiction of the state for any and all unrelated actions”); Sofrar, S.A. v. Graham Engineering Corp., 35 F. Supp.2d 919, 919 (S.D. Fla. 1999) (“personal jurisdiction over a corporate defendant cannot be found on the basis of a defendant’s registration to do business in the state and designation of a corporate agent alone”).  Florida looks solid.

Georgia

Georgia’s registration statute provides no indication that registration affects jurisdiction one way or another; nor are there relevant state cases.  However, pre-Bauman federal district courts in Georgia were inconsistent.  Moore v. McKibbon Brothers, 41 F. Supp.2d 1350, 1354 (N.D. Ga. 1998), considered registration as one factor of a minimum contact analysis, rather than as consent to jurisdiction in and of itself.  Contrarily, Wheeling Corrugating Co. v. Universal Const. Co., 571 F. Supp. 487, 488 (N.D. Ga. 1983), upheld general jurisdiction based on registration to do business as consent, relying on pre-International Shoe precedents, and based largely on defendant’s failure to support its opposition to jurisdiction with any evidence.  Id. We can’t give you a good handle on Georgia.

Hawaii

Hawaii is another state that has not adopted a position on the issue of consent to jurisdiction through registration to do business, either by statute or case law.  Hawaii’s registration statute, Haw. Rev. Stat. § 414-437, is silent as to jurisdiction.  Another state that appears up for grabs.

Idaho

Idaho’s statute provides that appointment of a registered agent has no effect on jurisdiction or venue.  Idaho Code § 30-21-414 (2015).  A federal district court similarly ruled that the presence of a registered agent alone is insufficient for general jurisdiction over a nonresident corporation.  Strickland v. Bae Systems Tactical Vehicle Systems, LP, 2013 WL 2554671 (D. Idaho June 10, 2013) (“the fact that both corporations have registered agents in Idaho, standing alone, is not enough to establish general jurisdiction over the corporations”).  We should be all right in Idaho.

Illinois

In another post-Bauman decision, the Illinois Supreme Court held that Illinois’s statute did not “require foreign corporations to consent to general jurisdiction as a condition of doing business …, nor [did] they indicate that, by registering … or appointing a registered agent, a corporation waives any due process limitations.”  American Insurance Co. v. Interstate Warehousing, Inc., ___ N.E.3d ___, 2017 WL 4173349, at *5 (Ill. Sept. 21, 2017).  See Alderson v. Southern Co., 747 N.E.2d 926, 944 (Ill. App. 2001) (“designation of an Illinois registered agent is not an independently determinative factor” in jurisdictional analysis).

Illinois federal courts, particularly since Bauman, have held that consent by registration is not a proper exercise of general jurisdiction.  See Congdon v. Cheapcaribbean.com, Inc., 2017 WL 5069960, at *8 (N.D. Ill. Nov. 3, 2017) (“it has long been held that registering to do business in a state, ‘standing alone,’ cannot satisfy due process required to assert personal jurisdiction”); Guaranteed Rate, Inc. v. Conn, ___ F. Supp.3d ___, 2017 WL 3704845, at *4 (N.D. Ill. Aug. 28, 2017) (registration to do business insufficient to support general jurisdiction); MG Design Assocs. Corp. v. CoStar Realty Information, Inc., ___ F. Supp.3d ___, 2017 WL 3070848, at *7 (N.D. Ill. July 19, 2017) (“registering to do business is not enough to confer general jurisdiction over a foreign corporation”); Muenstermann v. United States, 2017 WL 1408037, at *2 (S.D. Ill. April 20, 2017) (corporate registration/agent for service of process “do not constitute the type of continuance and systematic affiliations” required to support general jurisdiction; pre-Bauman contrary precedent is no longer applicable); Perez v. Air & Liquid Systems Corp., 2016 WL 7049153, at *6-9 (S.D. Ill. Dec. 2, 2016) (“registering to do business or maintaining a registered agent is not enough to confer general jurisdiction over a foreign corporation”); Johnson v. Barrier, 2016 WL 3520157 (N.D. Ill. June 28, 2016) (dismissing action; defendant’s consent to jurisdiction in previous cases not judicial estoppel); Leibovitch v. Islamic Republic of Iran, 188 F. Supp.3d 734, 749 (N.D. Ill. 2016) (“under Illinois law, the appointment of a registered agent is not determinative in the personal jurisdiction analysis”), aff’d, 852 F.3d 687 (7th Cir. 2017); Dimitrov v. Nissan North America, Inc., 2015 WL 9304490, at *4-5 (N.D. Ill. Dec. 22, 2015) (applying “lessons of Daimler”; no general jurisdiction over foreign corporation simply because it was registered to do business in Illinois); Surita v. AM General LLC, 2015 WL 12826471, at *3 (N.D. Ill. Nov. 4, 2015) (plaintiff’s “desire for this Court to exercise ‘all-purpose jurisdiction’ over [defendant] based on the presence of its registered agent in Illinois and [its] registration to do business in Illinois is unavailing, especially in light of” Bauman); Rozumek v. Union Carbide Corp., 2015 WL 12831301, at *2 (S.D. Ill. July 1, 2015) (registration to do business does not create general jurisdiction under Bauman); Rozumek v. General Electric Co., 2015 WL 12829795, at *2 (S.D. Ill. July 1, 2015) (same); Shrum v. Big Lots Stores, Inc., 2014 WL 6888446, at *2, *7 (C.D. Ill. Dec. 8, 2014) (“maintenance of an agent for the service of process does not rise to the level of ‘continuous and systematic’ contacts”); Sullivan v. Sony Music Entertainment, 2014 WL 5473142, at *3 (N.D. Ill. Oct. 29, 2014) (similar).  Before Bauman, see: Rawlins v. Select Specialty Hospital, 2014 WL 1647182, at *5 (N.D. Ill. April 23, 2014); ACUITY v. Roadtec, Inc., 2013 WL 6632631, at *5 (N.D. Ill. Dec. 16, 2013); Bray v. Fresenius Medical Care Aktiengesellschaft Inc., 2007 WL 7366260, at *4 (N.D. Ill. Aug. 30, 2007).

Indiana

Indiana courts, even prior to Bauman, rejected general jurisdiction based only on a foreign corporation’s consent by registering to do business.  Wilson v. Humphreys (Cayman) Ltd., 916 F.2d 1239, 1245 (7th Cir. 1990) (discussing consent-by-registration and holding that “ordinarily, registration, standing alone, will not satisfy due process”) (applying Indiana law); United States Bank National Ass’n v. Bank of America, N.A., 2016 WL 5118298, at *7-8 & n.4 (S.D.N.Y. Sept. 20, 2016) (defendant “had not waived its right to object to the exercise of personal jurisdiction by registering to do business in Indiana and designating an agent for service of process in Indiana”) (applying Indiana law); Garcia v. LQ Properties, Inc., 2016 WL 3384644, at *3 (N.D. Ind. June 20, 2016) (registration to do business, even with other contacts, insufficient to support general jurisdiction); United States Bank National Ass’n v. Bank of America, N.A., 2015 WL 5971126, at *6 (S.D. Ind. Oct. 14, 2015) (“Merely registering to do business in Indiana, though a necessary precursor to engaging in business activities in the state, does not establish personal jurisdiction over a corporation.”); McManaway v. KBR, Inc., 695 F. Supp.2d 883, 895 (S.D. Ind. 2010) (following Wilson; pre-Bauman).  Indiana looks safe.

Iowa

A post-Bauman Iowa federal district court allowed general jurisdiction via consent.  Spanier v. American Pop Corn Co., 2016 WL 1465400 (N.D. Iowa April 14, 2016).  The court considered itself bound by the adverse, pre-Bauman Knowlton decision (see Minnesota).  2016 WL 1465400, at *4 (consent by registration was a valid “means of exercising general jurisdiction” under Knowlton, which held “that consent by registration is a sufficient condition for the exercise of personal jurisdiction, which does not require a due process analysis”).  See also Daughetee v. CHR Hansen, Inc., 2011 WL 1113868, at *7 (N.D. Iowa March 25, 2011) (following Knowlton).  Right now, Iowa is on the pro-consent side.

Kansas

Kansas is seriously murky.  In a pre-Bauman decision the Supreme Court of Kansas held that registration is sufficient to establish general jurisdiction by consent.  Merriman v. Crompton Corp., 146 P.3d 162, 171, 177 (Kan. 2006).  Merriman found the Delaware decision in Sternberg “persuasive,” id. at 176, but in light of Bauman, the Delaware Supreme Court has overruled Sternberg (see Delaware).  See also AK Steel Corp. v. PAC Operating Ltd. Partnership, 2017 WL 3314294, at *4 (D. Kan. Aug. 3, 2017) (Kansas will continue to follow Pennsylvania Fire unless expressly overruled); Snyder Insurance Services. v. Sohn, 2016 WL 6996265, at *3 (D. Kan. Nov. 30, 2016) (defendant “consented to general personal jurisdiction by its registration to do business in Kansas”).  However, a recent Kansas intermediate appellate court ruled that registration alone is insufficient for general jurisdiction.  Kearns v. New York Community Bank, 400 P.3d 182 (table), 2017 WL 1148418, at *6 (Kan. App. March 24, 2017).  Further, an expansive view of general jurisdiction by consent was held to violate the dormant Commerce Clause in In re Syngenta AG MIR 162 Corn Litigation, 2016 WL 2866166, at *5-6 (D. Kan. May 17, 2016).

Kentucky

The issue of consent-based jurisdiction through registration to do business or designation of an agent is uncertain in Kentucky, because the statute provides no guidance, and no relevant cases have addressed this topic.  Ky. Rev. Stat. Ann. §§14A.4-010 (2012).  This absence of precedent may arise from the Kentucky Supreme Court’s limitation the Commonwealth’s Long-Arm statute (which does not extend to maximum constitutional due process limits) so that “even when the defendant’s conduct and activities fall within one of the enumerated [Kentucky-related] categories, the plaintiff’s claim still must ‘arise’ from that conduct or activity,” Caesars Riverboat Casino, LLC v. Beach, 336 S.W.3d 51, 56 (Ky. 2011), which therefore would seem to permit only specific jurisdiction.  We’re leaving Kentucky in the uncertain category, though.

Louisiana

Louisiana state and federal courts, both before and after Bauman, have rejected general jurisdiction on a consent by registration basis.  See, e.g., Firefighters’ Retirement System v. Royal Bank of Scotland PLC, 2017 WL 3381227, at *4 n.41(M.D. La. Aug. 4, 2017) (“being registered as a foreign corporation with the Louisiana Secretary of State’s office is not enough to establish general personal jurisdiction”); Nationwide Signs, LLC v. National Signs, LLC, 2017 WL 2911577, at *3 (E.D. La. July 7, 2017) (“the presence of a registered agent and registered business office is insufficient to support the exercise of general jurisdiction”); Mercury Rents, Inc. v. Crenshaw Enterprises Ltd., 2017 WL 2382483, at *1-2 (W.D. La. May 30, 2017) (“registering to do business in a forum State does not establish general jurisdiction”); Gulf Coast Bank v. Designed Conveyor Systems, LLC, 2017 WL 120645, at *7 (M.D. La. Jan. 12, 2017) (no consent to jurisdiction through registration, and because interpreting a registration statute as providing consent to general jurisdiction would “rob [Bauman] of its central meaning”); J.A.H. Enterprises, Inc. v. BLH Equipment, LLC, 2016 WL 7015688, at *4 (Mag. M.D. La. Oct. 24, 2016) (“Maintaining a license in a state does not necessarily mean that the state has general jurisdiction over the licensed individual.”), adopted, 2016 WL 7031288 (M.D. La. Nov. 30, 2016); Gulf Coast Bank & Trust Co. v. Designed Conveyor Systems, LLC, 2016 WL 4939113, at *3 (M.D. La. Sept. 14, 2016) (“that an entity is registered to do business in a forum State and maintains an agent for service of process in a forum State is insufficient to establish general jurisdiction”); Sciortino v. CMG Capital Management Group., Inc., 2016 WL 4799099, at *3 (E.D. La. Sept. 14, 2016) (state registration to sell securities does not support general jurisdiction); Firefighters’ Retirement System v. Royal Bank of Scotland, PLC, 2016 WL 1254366, at *5 (M.D. La. March 29, 2016) (“Fifth Circuit precedent has consistently held that being qualified to do business in a state and the appointment of a registered agent for service alone cannot support the exercise of general jurisdiction. Such precedent is further strengthened post-Daimler.”); Long v. Patton Hospitality Management, LLC, 2016 WL 760780, at *4-6 (E.D. La. Feb. 26, 2016) (contacts including registering to do business and maintaining a registered agent for service insufficient to establish general personal jurisdiction); Louisiana Limestone & Logistics, LLC v. Granite Group, 2014 WL 1217956, at *5 (W.D. La. Feb. 28, 2014) (“[Plaintiff] contends that this Court may exercise general jurisdiction over [defendant] because [defendant] registered with the Louisiana Secretary of State. . . .  However, [plaintiff’s] position is not consistent with Fifth Circuit precedent holding that the presence of the registered agent and registered business office alone is insufficient to support the exercise of general jurisdiction.”); Crochet v. Wal-Mart Stores, Inc., 2012 WL 489204, at *4 (W.D. La. Feb. 13, 2012) (no jurisdiction where a defendant’s “only contacts with Louisiana are its registration with the Louisiana Secretary of State to do business and its appointment of an agent for service of process”); DNH, LLC v. In-N-Out Burgers, 381 F .Supp.2d 559, 565 (E.D. La. 2005) (“Qualifying to do business in a state and appointing an agent for service of process there do not . . . sustain an assertion of general jurisdiction”); Lyons v. Swift Transportation Co., 2001 WL 1153001, at *6-7 (E.D. La. Sept. 26, 2001) (“regardless of the existence of an agent for service of process, the exercise of personal jurisdiction over a non-resident defendant must nevertheless comport with the principles of due process”).  See also Taylor v. Arellano, 928 So.2d 55, 58-60 (La. App. 2005) (nonresident corporation was not subject to general jurisdiction based on designation of agent for service, because there were not sufficient contact to satisfy due process, and narrowly construing Phillips Petroleum Co. v. OKC Ltd. Partnership, 634 So.2d 1186, 1187 (La. 1994), which contained dicta that could be read as supportive of general jurisdiction through consent).

Maine

Maine’s registration statute provides that “[t]he appointment or maintenance in this State of a clerk or registered agent does not by itself create the basis for personal jurisdiction” in Maine courts.  Me. Rev. Stat. Ann. tit. 5, § 115 (2013).  In Sandstrom v. ChemLawn Corp., 904 F.2d 83 (1st Cir. 1990) (applying Maine law), merely being licensed to do business in Maine and having a agent for service of process was neither “actually doing business” nor “continuous and substantial” business activity that would allow general personal jurisdiction.  Id. at 89.  Down East looks solid.

Maryland

The statutory framework eliminates consent through registration as a basis for general jurisdiction.  See Md. Code Ann., Corps. & Ass’ns §7-101 (“[w]ith respect to any cause of action on which a foreign corporation would not otherwise be subject to suit in this State, compliance with [the registration statute] …” neither renders a foreign corporation “subject to suit” nor is considered “consent by it to be sued” in Maryland.) (2014).  Maryland courts similarly reject general jurisdiction simply as a matter of registration to do business or appointment of an agent.  See, e.g., Republic Properties Corp. v. Mission West Properties, LP, 895 A.2d 1006, 1022 (Md. 2006) (“service of process within Maryland upon the resident agent of a domestic corporate general partner of a foreign limited partnership does not confer, by itself, personal jurisdiction over the foreign limited partnership,” calling into question the viability of Pennsylvania Fire); Goodyear Tire & Rubber Co. v. Ruby, 540 A.2d 482, 487 (Md. 1988) (presence of the agent for service “would not alone be sufficient to subject [defendant] to suit here”); Advanced Datacomm Testing Corp. v. PDIO, Inc., 2009 WL 2477559, at *8 (D. Md. Aug. 11, 2009) (due process precludes basing general jurisdiction on nothing more than registration/agent for service of process); Tyler v. Gaines Motor Lines, Inc., 245 F. Supp.2d 730, 732 (D. Md. 2003) (“reject[ing] the notion that appointing a registered agent is sufficient to establish general personal jurisdiction over a corporation”).  Maryland looks good.

Massachusetts

The Massachusetts registration statute is silent on the issue of consent to jurisdiction over registration for appointment of an agent.  Federal precedent recognizes that where a “defendant has registered as a foreign corporation to do business in Massachusetts and has named a registered agent for service of process . . . such activities, standing alone, are not enough to confer general personal jurisdiction.” Fiske v. Sandvik Mining & Construction USA, LLC, 540 F. Supp.2d 250, 256 (D. Mass. 2008) (following Sandstrom (see Maine).  They do, however, “add some modest weight to the jurisdictional analysis. Id. accord Grice v. VIM Holdings Group, LLC, 2017 WL 6210891, at *4, 10 (D. Mass. Dec. 8, 2017) (no general jurisdiction; finding registration relevant to specific jurisdiction post-Bauman); Cossart v. United Excel Corp., 2014 WL 4927041, at *2 (D. Mass. Sept. 30, 2014) (“Registration . . . cannot satisfy general jurisdiction’s requirement of systematic and continuous activity.”), rev’d on other grounds, 804 F.3d 13 (1st Cir. 2015) (specific jurisdiction).  However, a Massachusetts state trial decision, citing Pennsylvania Fire, and similar cases, includes extensive dicta suggesting that consent by registration was a valid exercise of general jurisdiction.  Galvin v. Jaffe, 2009 WL 884605, at *6-11 (Mass. Super. Jan. 26, 2009) (defendant was individual corporate officer consent-by-registration of corporate entities as a basis for general jurisdiction also discussed).  Despite that discordant note, Massachusetts seems favorable.

Michigan

The Michigan Supreme Court held decades ago that “admission of defendant to carry on business in this State . . . gave to it the status of a domestic corporation . . ., but did not extend its liability to be sued” on any and all claims.  Renfroe v. Nichols Wire & Aluminum Co., 83 N.W.2d 590, 594 (Mich. 1957).  Michigan federal courts have followed.  Asphalt v. Bagela Baumaschinen GmbH & Co. KG, 2017 WL 1177455, at *4 & n.1 (E.D. Mich. March 30, 2017) (“numerous courts have determined that parties do not consent to general jurisdiction by registering to do business in the state of Michigan, without more”); Magna Powertrain De Mexico S.A. De C.V. v. Momentive Performance Materials USA LLC, 192 F. Supp.3d 824, 830 (E.D. Mich. June 16, 2016) (“Michigan courts have rejected the idea that the registration statutes allow an inference of consent to general personal jurisdiction”).  Michigan is solid.

Minnesota

Minnesota is one of the few states in which appointment of an agent has been enough to constitute consent to general jurisdiction.  The appellate cases so holding are pre-Bauman, and have not been reconsidered since.  See Rykoff-Sexton, Inc. v. American Appraisal Assoc., Inc., 469 N.W.2d 88, 90 (Minn. 1991) (“[o]nce the defendant has appointed an agent for service of process . . . personal jurisdiction pursuant to the consent of the defendant does not invoke constitutional or long arm statutory analysis”); Knowlton v. Allied Van Lines, Inc., 900 F.2d 1196, 1200 (8th Cir. 1990) (“appointment of an agent for service of process . . . gives consent to the jurisdiction of Minnesota courts for any cause of action, whether or not arising out of activities within the state”) (applying Minnesota law).  Neither case conducted a due process analysis.  Ally Bank v. Lenox Financial Mortgage Corp., 2017 WL 830391 (D. Minn. March 2, 2017), upheld consent through a registration as valid form of general jurisdiction, following Knowlton, and distinguishing Bauman as “address[ing] the limits of general jurisdiction over a foreign corporation, not the limits of a defendant’s capacity to consent to personal jurisdiction.”  Id. at *3.  For other Minnesota post-Bauman applications of jurisdiction by consent under Knowlton see: Ritchie Capital Management, Ltd. v. Costco Wholesale Corp., 2017 WL 4990520, at *2 (D. Minn. Oct. 30, 2017); Edmondson v. BNSF Railway Co., 2015 WL 10528453, at *3-4 (Minn. Dist. May 12, 2015).  Cf. McGill v. Conwed Corp., 2017 WL 4534827, at *8 (D. Minn. Oct. 10, 2017) (no general jurisdiction where corporate registration was revoked).  Minnesota is solid the other way.

Mississippi

Mississippi’s registration statute specifically excludes consent by registration, stating that “[t]he appointment or maintenance in this state of a registered agent does not by itself create the basis for personal jurisdiction over the represented entity in this state.”  Miss. Code Ann. §79-35-15 (2013).  Accord Mullen v. Bell Helicopter Textron, Inc., 136 F. Supp.3d 740, 744 (S.D. Miss. 2015) (“Alone, [defendant’s] business registration in Mississippi does not establish that it is ‘at home’ in Mississippi.”); Pitts v. Ford Motor Co., 127 F. Supp.3d 676, 683 (S.D. Miss. 2015); Handshoe v. Yount, 2015 WL 7572344, at *4 (S.D. Miss. Nov. 24, 2015); Robinson v. Knight Protective Service, Inc., 2014 WL 1326096, at *4 (S.D. Miss. March 31, 2014); Continental First Federal, Inc. v. Watson Quality Ford, Inc., 2009 WL 2032401, at *8-9 (M.D. Tenn. July 9, 2009) (applying Mississippi law); Norfolk Southern Railway Co. v. Burlington Northern, 2005 WL 1363210, at *2-3 (S.D. Miss. June 2, 2005).  Mississippi looks alright on this issue.

Missouri

Following Bauman, the Missouri Supreme Court held that a nonresident corporation does not consent to simply by registering to do business.   State ex rel. Norfolk Southern Railway Co. v. Dolan, 512 S.W.3d 41, 51-53 (Mo. 2017) (“Dolan”).  “[A] broad inference of consent based on registration would allow national corporations to be sued in every state, rendering [Bauman] pointless.”  Id. at 51.  Numerous post-Bauman state and federal courts have also reached the same result.  See Madlock v. Westar Energy, Inc., 517 S.W.3d 678, 679 (Mo. App. 2017) (following Dolan); Siegfried v. Boehringer Ingelheim Pharmaceuticals, Inc., 2017 WL 2778107, at *5 (E.D. Mo. June 27, 2017) (“[c]ompliance with Missouri’s registration statute does not confer personal jurisdiction”); Everett v. Aurora Pump Co., 2017 WL 2778091, at *1 (E.D. Mo. June 27, 2017) (following Dolan; “registration no longer provides a basis for a court to exercise personal jurisdiction over a defendant”); Matthews v. BNSF Railway Co., 2017 WL 2266891, at *2 (W.D. Mo. May 23, 2017) (following Dolan; reconsidering prior decision); Alvarracin v. Volume Services, Inc., 2017 WL 1842701, at *2 (W.D. Mo. May 4, 2017) (“agree[ing] with the findings of those courts who have determined that Knowlton’s [see Minnesota] holding cannot survive in light of” Bauman); MacCormack v. The Adel Wiggins Group, 2017 WL 1426009, at *3-4 (E.D. Mo. April 21, 2017) (similar; overruling prior decisions in same litigation); Addelson v. Sanofi S.A., 2016 WL 6216124, at *4 (E.D. Mo. Oct. 25, 2016) (“personal jurisdiction is not established by appointment of an agent for service of process”; Knowlton not good law post-Bauman); In Re: Zofran (Ondansetron) Products Liability Litigation, 2016 WL 2349105, at *4 (D. Mass. May 4, 2016) (general jurisdiction by consent “would distort the language and purpose of the Missouri registration statute and would be inconsistent with” Bauman) (applying Missouri law); Beard v. Smithkline Beecham Corp., 2016 WL 1746113, at *2 (E.D. Mo. May 3, 2016) (rejecting registration to do business as general jurisdiction by consent; prior precedent no longer valid after Bauman); Keeley v. Pfizer, Inc., 2015 WL 3999488, at *4 (E.D. Mo. July 1, 2015) (“A defendant’s consent to jurisdiction must satisfy the standards of due process and finding a defendant consents to jurisdiction by registering to do business in a state or maintaining a registered agent does not”); Neeley v. Wyeth LLC, No., 2015 WL 1456984, at *3 (E.D. Mo. March 30, 2015) (Bauman “clearly rejects” general jurisdiction based on corporate registration); Smith v. Union Carbide Corp., 2015 WL 191118, at *3 (Mo. Cir. St. Louis City Jan. 12, 2015) (having registered agent “does not automatically establish general personal jurisdiction”).

Some post-Bauman Missouri federal courts disagreed, claiming to be bound by Knowlton (see Minnesota), and allowed general jurisdiction by consent based on compliance with corporate registration. Mitchell v. Eli Lilly & Co., 159 F. Supp.3d 967, 975-79 (E.D. Mo. 2016); Steadfast Insurance Co. v. Schindler Elevator Corp., 2016 WL 7332992, at *2-3 (W.D. Mo. Dec. 16, 2016); Regal Beloit America, Inc. v. Broad Ocean Motor LLC, 2016 WL 3549624, at *4-5 (E.D. Mo. June 30, 2016); Chalkey v. Smithkline Beecham Corp., WL 705134, at *4 (E.D. Mo. Feb. 23, 2016); Jackson v. SmithKline Beecham Corp., 2016 WL 454735, at *1 (E.D. Mo. Feb. 5, 2016); Trout v. SmithKline Beecham Corp., 2016 WL 427960, at *1 (E.D. Mo. Feb. 4, 2016); Gracey v. Janssen Pharmaceuticals, Inc., 2015 WL 2066242, at *3 n.4 (E.D. Mo. May 4, 2015).  Cf. Ocepek v. Corporate Transportation, Inc., 950 F.2d 556, 557 (8th Cir. 1991) (pre-Bauman decision extending Knowlton to Missouri law).  No federal court has permitted a jurisdiction-by-consent theory since the Missouri Supreme Court’s decision in Dolan.

Montana

In Montana, “[t]he appointment or maintenance in this state of a registered agent does not by itself create the basis for personal jurisdiction over the represented entity in the state.”  Mont. Code Ann. §35-7-105.  There are few court decisions, but the Ninth Circuit declined to permit consent through registration.  King v. American Family Mutual Insurance Co., 632 F.3d 570, 579 (9th Cir. 2011) (where the nonresident defendant’s “sole contacts” work “Certificates of Authorization and . . . an agent for service of process” it could not support general jurisdiction) (applying Montana law).  The Supreme Court’s reversal of Montana’s adverse general jurisdiction decision in BNSF Railway Co. v. Tyrrell, 137 S. Ct. 1549 (2017), expressly declined to discuss jurisdiction by consent, because the Montana Supreme Court had not addressed that issue.  With the statute and the Ninth Circuit, Montana is looking all right on this.

Nebraska

Under Nebraska law, “[b]y designating an agent upon whom process may be served within [the] state, a defendant has consented to the jurisdiction in personam by the proper court.”  Mittelstadt v. Rouzer, 328 N.W.2d 467, 469 (Neb. 1982); see also Ytuarte v. Gruner & Jahr Printing & Publishing Co., 935 F.2d 971, 973 (8th Cir. 1991) (appointment of an agent for service of process by corporate defendants gives consent to the jurisdiction of a state’s courts for any cause of action, whether or not arising out of activities within the state) (applying Nebraska law).  Decisions after Bauman have not retreated from this type of consent-based jurisdiction, despite the Supreme Court’s curtailment of general jurisdiction.  See, e.g., Consolidated Infrastructure Group, Inc. v. USIC, LLC, 2017 WL2222917, at *7 (D. Neb. May 18, 2017) (“[o]ne of the most solidly established ways of giving . . . consent [to general jurisdiction] is to designate an agent for service of process within the State”; citing Knowlton (see Minnesota)); Perrigo Co. v. Merial Ltd., 2015 WL 1538088, at *7 (D. Neb. April 7, 2015) (allowing general jurisdiction based on consent through registration).  Nebraska is another state firmly in the expansive jurisdiction category.

Nevada

Nevada’s Supreme Court has held that a foreign corporation’s compliance with the  state’s registration statute does not “in itself subject a nonresident . . . company to the personal jurisdiction of Nevada Courts.”  Freeman v. Second Judicial Dist. Court, 1 P.3d 963, 968 (Nev. 2000) ( “[o]ther courts and legal scholars have agreed that the mere act of appointing an agent to receive service of process, by itself, does not subject a non-resident corporation to general jurisdiction”).  Accord Hunt v. Auto-Owners Insurance Co., 2015 WL 3626579, *5 n.2 (D. Nev. June 10, 2015) (“corporate licensure and amenability to service of process “in Nevada does not establish personal jurisdiction”).  Nevada is solid.

New Hampshire

New Hampshire’s registration statute does not indicate that a nonresident defendant’s compliance results in its consent to general jurisdiction.  The First Circuit has held that “[c]orporate registration in New Hampshire adds some weight to the jurisdictional analysis, but it is not alone sufficient to confer general jurisdiction.” Cossaboon v. Maine Medical Center, 600 F.3d 25, 37 (1st Cir. 2010) (applying New Hampshire law).  Cossaboom did not even mention Holloway v. Wright & Morrissey, Inc., 739 F.2d 695 (1st Cir. 1984), which in an entirely non-constitutional analysis interpreted New Hampshire’s statute, at least for litigation “causally connected” to New Hampshire, registration constituted “consent[] to jurisdiction.”  Id. at 699.  Holloway is best interpreted as a specific jurisdiction case, as it refused to rule on whether registration “would authorize a suit on a cause of action that has no relationship to the state of New Hampshire.”  Id.  Although there is that old case, we put New Hampshire in the anti-consent majority.

New Jersey

While the New Jersey Supreme Court has yet to preclude the consent to general jurisdiction through registration to do business, the Appellate Division recently did, in light of Bauman.  In Dutch Run-Mays Draft, LLC v. Wolf Block, LLP, 164 A.3d 435 (N.J. App. Div. 2017), the court could not “agree business registration rises to consent to submit to the general jurisdiction in the forum,” given Bauman’s “clear narrow application of general jurisdiction,” and declining to follow prior contrary precedent.  Id. at 444-45.  Although some New Jersey federal courts allowed consent by registration before Dutch Run, the majority did not.  See, e.g., Boswell v. Cable Services Co., 2017 WL 2815077, at *4-6 (D.N.J. June 28, 2017) (New Jersey registration statute lacked “express language” indicating consent, rejecting general jurisdiction on basis of registration); Display Works, LLC, v. Bartley, 182 F. Supp.3d 166, 175-76 (D.N.J. 2016) (rejecting general jurisdiction by consent; “the sweeping propositions of jurisdictional power in Pennsylvania Fire . . . cannot be squared with” Bauman); Singh v. Diesel Transportation, LLC, 2016 WL 3647992, at *3 (D. N.J. July 7, 2016) (“reject[ing] Plaintiff’s argument that compliance with [a statutory] designation of agent requirement renders [defendant] susceptible to general jurisdiction in New Jersey”); McCourt v. A.O. Smith Water Products Co., 2015 WL 4997403, at *4 (D.N.J. Aug. 20, 2015) (“The single fact that Defendant registered to do business in New Jersey is insufficient to conclude that it ‘consented’ to jurisdiction here.”); Kubin v. Orange Lake Country Club, Inc., 2010 WL 3981908, at *3 (D.N.J. Oct. 8, 2010) (pre-Bauman); Davis v. Quality Carriers, Inc., 2009 WL 3335860, at *3 (D.N.J. Oct. 15, 2009) (rejecting jurisdiction by consent by designation of agent for service of process under federal statute; pre-Bauman).

Post-Bauman New Jersey cases that allowed jurisdiction-by-consent based on registration were all pharmaceutical patent cases decided prior to the Federal Circuit’s decision in Acorda Therapeutics Inc. v. Mylan Pharmaceuticals, Inc., 817 F.3d 755 (Fed. Cir. 2016), which declined to base general jurisdiction on this basis.  See Senju Pharmaceutical Co. v. Metrics, Inc., 96 F. Supp.3d 428, 436-37 (D.N.J. 2015) (following Pa. Fire); Otsuka Pharmaceutical Co. v. Mylan Inc., 2015 WL 1305764, at *8-11 (D.N.J. March 23, 2015) (same).

Unless and until the New Jersey Supreme Court messes things up, New Jersey now looks strong against jurisdiction by consent.

New Mexico

According to the New Mexico Supreme court “[w]hile designation of an agent for service of process may confer power on a state to exercise its jurisdiction, it does not automatically do so.”  Page & Wirtz Construction Co. v. C & G Prestressed Concrete, 108 N.M. 375, 377, 772 P.2d 1298, 1300 (N.M. 1989).  The Tenth Circuit has reached a similar result. Budde v. Ling-Temco-Vought, Inc., 511 F.2d 1033, 1036 (10th Cir. 1975) (applying New Mexico law).  But see Werner v. Wal-Mart Stores, Inc., 861 P.2d 270, 272-73 (N.M. App. 1993) (interpreting registrations statutes and concluding that “without an express limitation, the legislature intended [New Mexico’s registration statute] to apply to any claims against a foreign corporation with a registered agent in New Mexico,” and ruling that due process analysis was not necessary, citing Knowlton, 900 F.2d at 1200 (see Minnesota); Fireman’s Fund Insurance Co. v. Thyssen Mining Construction of Canada, Ltd., 2011 WL 13085934, at *2-3 (D.N.M. July 29, 2011), rev’d in part and on other grounds, 703 F.3d 488 (10th Cir. 2012) (following Werner in preference to Budde).  With the New Mexico supreme Court on our side, we’ll put this one in the majority, too.

New York

Many years before Bauman, back in the days of Pennsylvania Fire, the New York Court of Appeals allowed general jurisdiction by consent.  Bagdon v. Philadelphia & Reading Coal & Iron Co., 111 N.E. 1075 (N.Y. 1916).  While Bagdon has not been overruled, a distinct majority of New York state and federal cases have recognized, since Bauman, that general jurisdiction can no longer constitutionally be obtained by “consent” amounting to nothing more than registration to do business in New York.  One of the more noteworthy cases is Minholz v. Lockheed Martin Corp., 227 F. Supp.3d 249 (N.D.N.Y. 2016), concluding after a lengthy discussion of conflicting precedents – particularly Brown (see Connecticut) −  that general jurisdiction can no longer be created by registration to do business.  “[T]the Supreme Court’s shift in the general jurisdiction analysis over foreign corporations from the ‘minimum contacts’ review described in International Shoe to the more demanding ‘essentially at home’ test enunciated in [Bauman] − suggests that federal due process rights likely constrain an interpretation that transforms a run-of-the-mill registration and appointment statute into a corporate ‘consent’ to the exercise of general jurisdiction.”  Id. at 264 (citations and quotation marks omitted).

Other post-Bauman New York decisions rejecting general jurisdiction by “consent” resting upon corporate registration are:  Sae Han Sheet Co. v. Eastman Chemical Corp., 2017 WL 4769394, at *6 (S.D.N.Y. Oct. 19, 2017) (“corporations do not consent to general jurisdiction when they register under the various New York registration statutes”); Sonterra Capital Master Fund Ltd. v. Credit Suisse Group AG, ___ F. Supp.3d ___, 2017 WL 4250480, at *46 (S.D.N.Y. Sept. 25, 2017) (rejecting registration to do business under banking statute as consent to general jurisdiction); Spratley v. FCA US LLC, 2017 WL 4023348, at *3-4 (N.D.N.Y. Sept. 12, 2017) (“Since every state in the union has a business registration statute, treating the registration to do business in a state as an implicit consent to general jurisdiction must also be ‘unacceptably grasping.’”); Australia & New Zealand Banking Group Ltd. v. APR Energy Holding Ltd., 2017 WL 3841874, at *3-4 (S.D.N.Y. Sept. 1, 2017) (“a foreign corporation did not consent to the exercise of general jurisdiction simply by registering to do business and appointing an agent”; third-party discovery case); Wilderness USA, Inc. v. DeAngelo Brothers LLC, ___ F. Supp.3d ___, 2017 WL 3635123, at *7- (W.D.N.Y. Aug. 23, 2017) (rejecting general jurisdiction by consent; “this doctrine has been invalidated by the Supreme Court’s decision in Daimler”); FrontPoint Asian Event Driven Fund, L.P. v. Citibank, N.A., 2017 WL 3600425, at *3-5 (S.D.N.Y. Aug. 18, 2017) (“Plaintiffs may not use New York’s [banking] registration statute as a basis for asserting general jurisdiction over the Foreign Defendants”); Famular v. Whirlpool Corp., 2017 WL 2470844, at *4 (S.D.N.Y. June 7, 2017) (“the reasoning [of pre-Bauman precedent was] incomplete and unpersuasive in that those cases did “not meaningfully analyze the impact of [the] watershed case”); Justiniano v. First Student Management LLC, 2017 WL 1592564, at *6 (E.D.N.Y. April 26, 2017) (jurisdiction by consent “has been placed in serious doubt” by recent Supreme Court precedent); Sullivan v. Barclays PLC, 2017 WL 685570, at *39-40 (S.D.N.Y. Feb. 21, 2017) (no consent to general jurisdiction based on registration under banking statute); Weiss v. National Westminster Bank PLC, 176 F. Supp.3d 264, 277 & n.7 (E.D.N.Y. 2016) (same); Strauss v. Credit Lyonnais, S.A., 175 F. Supp.3d 3, 17 & n.7 (E.D.N.Y. 2016) (same); Taormina v. Thrifty Car Rental, 2016 WL 7392214, at *6 (S.D.N.Y. Dec. 21, 2016) (applying Brown to New York law; prior precedent not valid after Bauman); Bonkowski v. HP Hood, LLC, 2016 WL 4536868, at *3 (E.D.N.Y. Aug. 30, 2016) (following Brown; pre-Bauman jurisdiction by consent precedent no longer viable); In re Foreign Exchange Benchmark Rates Antitrust Litigation, 2016 WL 1268267, at *2 (S.D.N.Y. March 31, 2016) (registration to do business not “broad[]” consent to jurisdiction); Chatwal Hotels & Resorts LLC v. Dollywood Co., 90 F. Supp.3d 97, 105 (S.D.N.Y. 2015) (“the mere fact of [defendant’s] being registered to do business is insufficient to confer general jurisdiction in a state that is neither its state of incorporation or its principal place of business”); Amelius v. Grand Imperial LLC, ___ N.Y.S.3d ___, 2017 WL 4158854, at *9-13 (N.Y. Sup. Sept. 11, 2017) (defendant “is not subject to general jurisdiction merely because it has registered to do business here”); Mischel v. Safe Haven Enterprises, LLC, 2017 WL 1384214, at *5 (N.Y. Sup. April 17, 2017) (general jurisdiction based on registration to do business is improperly “coercive” after Bauman); Gliklad v. Bank Hapoalim B.M., 2014 WL 3899209, at *1 (N.Y. Sup. Aug. 4, 2014) (in light of Bauman jurisdiction by consent “is no basis for the exercise of general jurisdiction”). Cf. Gucci America, Inc. v. Weixing Li, 768 F.3d 122, 135, 137 & n.15 (2d Cir. 2014) (rejecting general jurisdiction; after Bauman, defendant’s registration and agent for service of process are factors to consider regarding specific jurisdiction) (applying New York law); Hood v. Ascent Medical Corp., 691 Fed. Appx. 8 (2d Cir. 2017) (forum selection clause does not constitute consent to jurisdiction); Magdalena v. Lins, 999 N.Y.S.2d 44, 45 (N.Y.A.D. 2014) (no general jurisdiction by consent via forum selection clause); Chambers v. Weinstein, 2014 WL 4276910, at *16, 997 N.Y.S.2d 668 (table) (N.Y. Sup. Aug. 22, 2014) (New York law license does not create general jurisdiction over attorney residing out of state).

Contrary post-Bauman decisions that continue to follow Bagdon are: Wheeler v. CBL & Associates Properties, Inc., 2017 WL 3611295, at *2-3 (N.Y. Sup. Aug. 17, 2017); Serov v. Kerzner International Resorts, Inc., 43 N.Y.S.3d 769 (table), 2016 WL 4083725, at *4-5 (N.Y. Sup. July 26, 2016); Aybar v. Aybar, 2016 WL 3389890, at *3-4 (N.Y. Sup. May 25, 2016); Corporate Jet Support, Inc. v. Lobosco Insurance Group, LLC, 2015 WL 5883026, at *2 (N.Y. Sup. Oct. 7, 2015); Fallman v. Hotel Insider Ltd., 2016 WL 316378, at*2 (S.D.N.Y. Jan. 15, 2016); Bailen v. Air & Liquid Systems Corp., 2014 WL 3885949, at *4-5 (N.Y. Sup. Aug. 5, 2014); Beach v. Citigroup Alternative Investments, 2014 WL 904650, at *6 (S.D.N.Y. March 7, 2014).

It’s been a helluva fight, but right now New York looks pretty firm, particularly in federal court.

North Carolina

Long ago, the North Carolina Supreme Court held that “the casual presence of the corporate agent or even his conduct of single or isolated activity in a state in the corporation’s behalf are not enough to subject it to suit on causes of action unconnected with the activities there.” Byham v. National Cibo House Corp., 143 S.E.2d 225, 231 (N.C. 1965).  Other courts have refused to construe North Carolina’s registration statute – which does not discuss jurisdiction – as authorizing jurisdiction on the basis of a foreign corporation’s registration alone.  Sebastian v. Davol, Inc., 2017 WL 3325744, at *11 (W.D.N.C. Aug. 3, 2017) (North Carolina statute “contains no reference to jurisdiction by consent”; finding “no decision − state or federal − construing North Carolina’s registration or licensing statutes to extend personal jurisdiction over registered businesses”); JPB Installers, LLC v. Dancker, Sellew & Douglas, Inc., 2017 WL 2881142, at *4 (M.D.N.C. July 6, 2017) (“Long-standing precedent forecloses [plaintiff’s] argument that [defendant’s] registration to do business in North Carolina is sufficient to subject it to the general jurisdiction of this Court.”); Public Impact, LLC v. Boston Consulting Group, Inc., 117 F. Supp.3d 732, 740 (M.D.N.C. 2015) (there is “no decision − State or federal − construing North Carolina’s registration statute to extend personal jurisdiction over registered businesses”); Thompson v. Mission Essential Personnel, LLC, 2013 WL 6058308, at *2 n. 1 (M.D.N.C. Nov. 14, 2013) (“registration to do business in the state alone is not the deciding factor on which jurisdiction should be determined”), adopted, 2014 WL 4745947 (M.D.N.C. Sept. 23, 2014).  Rock solid.

North Dakota

The North Dakota statute expressly provides that registration does not equate to consent to jurisdiction, stating that “[t] appointment or maintenance in this state of a registered agent does not by itself create the basis for personal jurisdiction over the represented entity in this state.”  N.D. Cent. Code§§10-01.1-15 (2012).  Thus, “[m]ere registration to transact business in North Dakota does not render [defendant] subject to general jurisdiction in the state.” HomeRun Products, LLC v. Twin Towers Trading, Inc., 2017 WL 4293145, at *4 (D.N.D. Sept. 27, 2017).  South Dakota looks solid.

Ohio

Ohio State and federal courts have ruled that designating an agent for service is insufficient to warrant consent to general jurisdiction, notwithstanding due process.  The Supreme Court determined that, if Ohio were to treat the designation of an agent for service of process as consent to general jurisdiction, that would violate the Commerce Clause:

[A] designation with the Ohio Secretary of State of an agent for the service of process [that] likely would have subjected [defendant] to the general jurisdiction of Ohio courts over transactions in which Ohio had no interest . . . is an unreasonable burden on commerce.

Bendix Autolite Corp. v. Midwesco Enterprises, Inc., 486 U.S. 888, 895 (1988).

In Wainscott v. St. Louis-S.F. Railway Co., 351 N.E.2d 466, 471 (1976), the Ohio Supreme Court stated that the “consent theory” of personal jurisdiction only extends to claims based on minimum contacts with the forum, reversing the appellate court’s denial of a motion to dismiss for lack of jurisdiction.  See also Pittock v. Otis Elevator Co., 8 F.3d 325, 329 (6th Cir. 1993) (following Wainscott) (applying Ohio law); Avery Dennison Corp. v. Alien Tech. Corp., 632 F. Supp. 2d 700, 711 n.7 (N.D. Ohio 2008) (“It appears that registration to do business in Ohio is simply one fact to consider in analyzing personal jurisdiction.”).  These cases indicate that the recent contrary decision in Grubb v. Day to Day Logistics, Inc., 2015 WL 4068742, at *3 (S.D. Ohio July 2, 2015), is wrongly decided and based on obsolete precedent.  We’re putting Ohio into the anti-consent column.

Oklahoma

Oklahoma’s registration statute is silent on the issue of whether registration constitutes consent to jurisdiction.  Okla. Stat. tit. 18 §1022.  Although Oklahoma state courts have yet to address this issue, a federal district court acknowledged the lack of state precedent, but followed Bauman, holding that mere registration to do business is insufficient to establish general jurisdiction, dismissing the prescription pharmaceutical product liability claims of nonresident plaintiffs.  Aclin v. PD-RX Pharmaceuticals, Inc., 189 F. Supp.3d 1294, 1305 (W.D. Okla. 2016) (recognizing the Supreme Court’s and Tenth Circuit’s “preferential construction,” and declining “to exercise general jurisdiction over the Defendants on the basis of their registration in Oklahoma).  Aclin relied on Samuelson v. Honeywell, 863 F. Supp. 1503, 1507 (E.D. Okla. 1994), which rejected the argument that registration in Oklahoma constitutes consent to general jurisdiction pre-Bauman.  See Guillette v. PD-RX Pharmaceuticals, Inc., 2016 WL 3094073, at *8 (W.D. Okla. June 1, 2016) (same); Manning v. PD-RX Pharmaceuticals Inc., 2016 WL 3094075, at *7-8 (W.D. Okla. June 1, 2016) (same); Nauman v. PD-RX Pharmaceuticals Inc., 2016 WL 3094081, at *7-8 (W.D. Okla. June 1, 2016) (same).  Oklahoma is OK.

Oregon

The Oregon Supreme Court granted a writ of mandate, reversed a lower court’s decision and held that a foreign corporation’s registration to do business did not “as a matter of state law, the legislature did not intend that appointing a registered agent . . . would constitute consent to the jurisdiction of the Oregon courts.”  Figueroa v. BNSF Railway Co., 390 P.3d 1019, 1022 (Or. 2017).  Figueroa ruled that “appointing a registered agent to receive service of process merely designates a person upon whom process may be served,” but “does not constitute implied consent to the jurisdiction.”  Id.  See also Lanham v. Pilot Travel Centers, LLC, 2015 WL 5167268, at *11 (D. Or. Sept. 2, 2015) (“nothing in Oregon law supports a conclusion that compliance with these statutes confers general personal jurisdiction over a nonresident defendant for conduct occurring outside Oregon”).  Solid.

Pennsylvania

Pennsylvania is reputedly the only state in the nation with a corporate registration statute specifically providing that a nonresident corporation consents to “general jurisdiction” by complying with the statute.  42 Pa. Cons. Stat. Ann. §5301.  Well before Bauman, the Third Circuit interpreted compliance with this statute as consent to suit on any cause of action and as per se sufficient to support for general jurisdiction . Bane v. Netlink, Inc., 925 F.2d 637, 641 (3d Cir. 1991).  Some Post-Bauman courts have rejected registration to do business in Pennsylvania as a basis for general jurisdiction.  Antonini v. Ford Motor Co., 2017 WL 3633287, at *2 n.2 (M.D. Pa. Aug. 23, 2017) (registration, plus other contacts “more closely resemble those found insufficient to establish general jurisdiction”); McCaffrey v. Windsor at Windermere Ltd. Partnership, 2017 WL 1862326, at *4 (E.D. Pa. May 8, 2017) (registration to do business insufficient for general jurisdiction under Bauman); Spear v. Marriott Hotel Services, Inc., 2016 WL 194071, at *2 (E.D. Pa. Jan. 15, 2016) (rejecting plaintiff’s “reli[ance] solely on the fact that defendants are registered to do business” in Pennsylvania).  However,  most decisions applying Pennsylvania law have continued to engage in what is now gross jurisdictional overreach.  Mendoza v. Electrolux Home Products, Inc., 2017 WL 5010352, at *5 (E.D. Cal. Nov. 2, 2017) (following Bors) (applying Pennsylvania law); Plumbers’ Local Union No. 690 Health Plan v. Apotex Corp., 2017 WL 3129147, at *10-11 (E.D. Pa. July 24, 2017); Hegna v. Smitty’s Supply, Inc., 2017 WL 2563231, at *3-4 (E.D. Pa. June 13, 2017); Kukich v. Electrolux Home Products, Inc., 2017 WL 345856, at *6 (D. Md. Jan. 24, 2017) (following Bors) (applying Pennsylvania law); Bors v. Johnson & Johnson, 208 F. Supp.3d 648, 653-55 (E.D. Pa. 2016).  Cf. George v. A.W. Chesterton Co., 2016 WL 4945331, at *3 (W.D. Pa. Sept. 16, 2016) (general jurisdiction not created, even under Bane, by registration after an alleged injury).  As we have explained before, a state statute cannot trump the due process requirements of the federal constitution, so Pennsylvania’s statute and the decisions applying it are of doubtful constitutional validity.  Although there are some cracks, with the uniquely adverse statutory language, we’re leaving Pennsylvania in the pro-consent camp unless and until something dramatic happens.

Rhode Island

Although no state court has adjudicated this issue, federal courts have rejected this argument.  North American Catholic Education Programming Foundation, Inc. v. Cardinale, 567 F.3d 8, 16 n.6 (1st Cir. 2009) (“courts have consistently held that the appointment of an agent of process alone does not suffice to allow for the exercise of general jurisdiction”) (applying Rhode Island law); Phoenix Insurance Co. v. Cincinnati Indemnity Co., 2017 WL 3225924, at *4 (Mag. D.R.I. March 3, 2017) (defendant’s “license to transact insurance business in Rhode Island and its designation of [a] Rhode Island . . . agent to accept service of process do not tip the balance in favor of asserting general jurisdiction”), adopted, 2017 WL 2983879 (D.R.I. July 13, 2017); Harrington v. C.H. Nickerson & Co., 2010 WL 3385034, at *4 (D.R.I. Aug. 25, 2010) (“this Court will not presume that Defendant consented to personal jurisdiction where there is no indication that either the Rhode Island legislature, or Defendant itself, intended that corporate registration would serve as consent to personal jurisdiction in Rhode Island”).  Rhode Island is all right.

South Carolina

As long ago as 1971 the court in Ratliff v. Cooper Laboratories, Inc., 444 F.2d 745 (4th Cir. 1971) (applying South Carolina law), held that “the application to do business and the appointment of an agent for service to fulfill a state law requirement is of no special weight in” a general jurisdictional context.  See also Yarborough & Co. v. Schoolfield Furniture Industries, Inc., 268 S.E.2d 42, 44 (S.C. 1980) (corporate domestication statute conferred jurisdiction only as “to causes of action arising directly from the act relied upon to establish jurisdiction”).  A post-Bauman South Carolina court held that “even after an effective service of process, personal jurisdiction must still comport with due process,” rejecting an argument that mere service on a foreign corporation’s appointed agent effectuated personal jurisdiction.  Gibson v. Confie Insurance Group Holdings, Inc., 2017 WL 2936219, at *6 (D.S.C. July 10, 2017).  See Gracious Living Corp. v. Colucci & Gallaher, PC, 216 F. Supp. 3d 662, 668 (D.S.C. 2016) (service of defendant’s statutory agent for service did not create general personal jurisdiction); Gabrish v. Strickland Marine Agency, Inc., 2005 WL 5168410 (S.C. Dist. Dec. 2, 2005) (following Ratliff).  Rock solid.

South Dakota

South Dakota’s registration statute expressly mandates that “[t]he appointment or maintenance in this state of a registered agent does not by itself create the basis for personal jurisdiction.”  S.D. Cod. L. §59-11-21 (2009).  This provision overruled a contrary federal court decision.  See Sondergard v. Miles, Inc., 985 F.2d 1389, 1391 (8th Cir. 1993) (applying South Dakota law).  On the strength of the statute, we think South Dakota will be all right.

Tennessee

Tennessee state courts “historically” allowed consent on the basis of registration, Davenport v. State Farm Mutual Automobile Insurance Co., 756 S.W.2d 678, 679 (Tenn. 1988) (dictum), but such cases were all pre-Bauman.  Cf. First Community Bank, N.A. v. First Tennessee Bank, N.A., 489 S.W.3d 369, 401-02 (Tenn. 2015) (finding issue waived).  Even before Bauman, Tennessee precedent was not uniform.  JRM Investments, Inc. v. National Standard, LLC, 2012 WL 1956421, at *3 (Tenn. App. May 31, 2012) (affirming dismissal of defendant admittedly with a Tennessee agent for service of process for lack of general jurisdiction).  Since Bauman, federal court decisions have rejected this theory.  Western Express, Inc. v. Villanueva, 2017 WL 4785831, at *5-7 (M.D. Tenn. Oct. 24, 2017) (“it is clear that [defendant’s] designation of an agent for service of process, standing alone, [did] not constitute consent to the general jurisdiction” in Tennessee; “mere designation of an agent for service of process in a particular state, in compliance with a state statute, standing alone, does not constitute consent to general jurisdiction within that state”).  Moreover, a Davenport has been construed as relating to specific jurisdiction only.  Ratledge v. Norfolk Southern Railway Co., 958 F. Supp. 2d 827, 838 (E.D. Tenn. 2013).  Tennessee is all over the lot, so we rate it as undecided.

Texas

Both state and federal Texas courts have ruled that registration to do business does not amount to consent to jurisdiction.  See, e.g., Salgado v. OmniSource Corp., 2017 WL 4508085 (Tex. App. Oct. 10, 2017) (having a “registered agent in Texas . . . [alone] is not enough to subject a nonresident defendant to general jurisdiction”) (unpublished); Northern Frac Proppants, II, LLC v. 2011 NF Holdings, LLC, 2017 WL 3275896, at *16 (Tex. App. July 27, 2017) (“general jurisdiction contacts are not established by showing that foreign business entities . . . were registered to do business in Texas, and (iii) had registered agents for service of process in Texas”) (unpublished); Asshauer v. Glimcher Realty Trust, 228 S.W.3d 922, 933 (Tex. App. 2007) (“having a registered agent and being registered to do business in Texas only potentially subjects a foreign corporation to jurisdiction”); Conner v. ContiCarriers & Terminals, Inc., 944 S.W.2d 405, 416 (Tex. App. 1997) (“By registering to do business, a foreign corporation only potentially subjects itself to jurisdiction.”) (emphasis original); Wenche Siemer v. Learjet Acquisition Corp., 966 F.2d 179, 183 (5th Cir. 1992) (“the mere act of registering an agent . . . does not act as consent to be hauled into Texas courts on any dispute with any party anywhere concerning any matter”) (applying Texas law); Agribusiness United DMCC v. Blue Water Shipping Co., 2017 WL 1354144, at *5-6 (S.D. Tex. April 13, 2017) (registration and agent for service of process insufficient to be “at home” and therefore subject to general jurisdiction); ADT, LLC v. Capital Connect, Inc., 2015 WL 7352199, at *5 (N.D. Tex. Nov. 20, 2015) (following Wenche); Fiduciary Network, LLC v. Buehler, 2015 WL 2165953, at *5-6 (N.D. Tex. May 8, 2015) (consent through “registration of an agent for process and registration to do business” will not suffice for general jurisdiction); Transverse, LLC v. Info Directions, Inc., 2013 WL 3146838, at *5 (Mag. W.D. Tex. June 17, 2013) (“Courts have consistently held that the appointment of an agent of process alone does not suffice to allow for the exercise of general jurisdiction.”), adopted, 2013 WL 12133970 (W.D. Tex. Aug. 30, 2013); 800 Adept, Inc. v. Enterprise Rent-A-Car, Co., 545 F. Supp.2d 562, 569 n.1 (E.D. Tex. 2008) (“A party does not consent to personal jurisdiction merely by complying with a state’s registration statutes or appointing an agent for service of process.”); Arkwright Mutual Insurance Co. v. Transportes de Nuevo Laredo, 879 F. Supp. 699, 700-01 (S.D. Tex. 1994) (Texas certificate to do business does not establish general jurisdiction); Leonard v. USA Petroleum Corp., 829 F. Supp. 882, 889 (S.D. Tex. 1993) (“A foreign corporation must have contact, other than mere compliance with Texas domestication requirements, to be subject to personal jurisdiction in Texas.”).  Cf. Johnston v. Multidata Systems International Corp., 523 F.3d 602, 614 (5th Cir. 2008) (“Never before have we held that licenses to do work can create general jurisdiction.”) (applying Texas law).  But see Del Castillo v. PMI Holdings North America, Inc., 2015 WL 3833447, at *3-4 (S.D. Tex. June 22, 2015) (allowing general jurisdiction based on registration and agent for service of process).  Solid.

Utah

Utah’s registration statute “[does] not create an independent basis for jurisdiction.”  Utah Code Ann. § 16-17-401 (2013); see also Oversen v. Kelle’s Transportation Service, 2016 WL 8711343, at *3 (D. Utah May 12, 2016) (registration does not equate to general jurisdiction because “[n]othing in the text [of the statute] suggests that such an act will give rise to general personal jurisdiction or, for that matter, specific personal jurisdiction in any particular case”); Ayers v. Tanami Trading Corp., 2009 WL 1362402, at *3 (D. Utah May 14, 2009) (“[d]esignating an agent for the service of process within a state, without more, is insufficient to establish general jurisdiction”); Miller v. Robertson, 2008 WL 270761, at *5 (D. Utah Jan. 29, 2008) (“qualifying to do business or appointing a registered agent are relevant factors . . ., but they are not decisive by themselves”).  Utah looks good.

Vermont

Vermont’s statute and state cases provide no guidance.  Federal courts have predicted that Vermont would reject consent to general jurisdiction based on registration.  Bertolini-Mier v. Upper Valley Neurology Neurosurgery, P.C., 2016 WL 7174646, at *4 (D. Vt. Dec. 7, 2016) (“mere registration to do business in Vermont is not determinative of the jurisdictional questions in this case,” following Brown, (see Connecticut)); Viko v. World Vision Inc., 2009 WL 2230919, at *7 (D. Vt. July 24, 2009) (“compliance with Vermont’s foreign corporation registration statute does not entail consent to general personal jurisdiction, at least independently of the minimum contacts required by due process”).  Somewhat surprisingly, Vermont also looks good.

Virginia

The consequence of registration with respect to general jurisdiction is unclear, because there is no controlling case law, and the relevant decisions conflict.  Most recently, a Virginia trial court ruled that “[d]esignating an agent does not amount to continuous and systematic operations that render [defendant] ‘essentially at home’ in Virginia, as is minimally required for general personal jurisdiction.”  New York Commercial Bank v. Heritage Green Development, LLC, 2017 WL 954197, at *2 (Va. Cir. March 7, 2017).  New York Commercial followed Reynolds & Reynolds Holdings, Inc. v. Data Supplies, Inc., 301 F. Supp. 2d 545, 551 (E.D. Va. 2004), which held that the consent-by-registration theory does not comport with due process).  Id. at 551.  Conversely, Cognitronics Imaging Systems, Inc. v. Recognition Research, Inc., 83 F. Supp.2d 689, 693-94 (E.D. Va. 2000), held, well before Bauman, that compliance with a corporate registration statute did result in consent to general jurisdiction.  Somewhat surprisingly, Virginia still seems too close to call.

Virgin Islands

Citing Bauman’s “reluctance to extend general jurisdiction,” In re Asbestos Products Liability Litigation (No. VI), 2014 WL 5394310 (E.D. Pa. Oct. 23, 2014) (applying Virgin Islands law), held that a defendant’s current Virgin Islands license to do business and agent for service of process were “not so significant that they could substitute for its place of incorporation or principal place of business.”  Id. at *9.  Not a lot, but what there is looks good.

Washington

By statute, designation or maintenance in this state of a registered agent does not by itself create the basis for personal jurisdiction over the represented entity.”  Wash. Rev. Code §§23.95.460; Washington Equipment Manufacturing Co. v. Concrete Placing Co., 931 P.2d 170, 173 (Wash. App. 1997) (“A certificate of authority to do business and appointment of a registered agent do not then confer general jurisdiction over a foreign corporation.”); Cox v. Alco Industries, Inc., 2015 WL 10891167, at *4-6 (Wash. Super. Sept. 10, 2015) (registration to do business, even with other contacts, insufficient to support general jurisdiction; following Brown (see Connecticut); Dokoozian Construction LLC v. Executive Risk Specialty Insurance Co., 2015 WL 12085859, at *2 (W.D. Wash. July 28, 2015) (“reject[ing] the idea that the appointment of an agent for service of process alone works as consent to be sued in that state”); U.S. ex rel. Imco General Construction, Inc. v. Insurance Co. of Pennsylvania, 2014 WL 4364854, at *3 (W.D. Wash. Sept. 3, 2014) (basing general jurisdiction on registration to do business was “exorbitant” assertion of jurisdiction barred by Bauman).  Washington looks solid.

West Virginia

While the registration statute is silent on the jurisdictional invocations, federal courts have found that registration alone did not establish general jurisdiction.  Gallaher v. KBR, Inc., 2010 WL 2901626, at *10 (N.D.W. Va. July 21, 2010) (corporate registration and having agent for service of process “are not sufficient to establish general personal jurisdiction”); In re Mid-Atlantic Toyota Antitrust Litigation, 525 F. Supp. 1265, 1278 (D. Md. 1981) (“With no contact with West Virginia . . ., [defendant’s] consent [by registering to do business] to jurisdiction is an insufficient basis for personal jurisdiction”) (applying West Virginia law), aff’d, 704 F.2d 125 (4th Cir. 1983).  The sample isn’t large, but West Virginia looks all right on this issue.

Wisconsin

The Wisconsin Supreme Court held post-Bauman that “appointing a registered agent under Wis. Stat. § 180.1507 does not signify consent to general personal jurisdiction.  The statute’s plain language does not mention jurisdiction, and [plaintiff’s] proffered deviation from the text would place the statute’s constitutionality into doubt.”  Segregated Account of Ambac Assurance Corp. v. Countrywide Home Loans, 898 N.W.2d 70, 77 (Wis. 2017).  Expansive jurisdiction by consent “would extend Wisconsin’s exercise of general jurisdiction beyond the tapered limits recently described by the Supreme Court.”  Id. at 80.  “A foreign corporation’s contacts with Wisconsin would be irrelevant so long as it registered an agent for service of process − which all foreign corporations authorized to transact business in this state must do,” which would render the Long Arm statute “idle and nugatory.”  Id. at 79. Pennsylvania Fire “represent[ed] a disfavored approach to general jurisdiction.”  Id. at 82.  Now solid.

Wyoming

Wyoming’s registration of foreign corporations statutes and cases have yet to address the issue of consent to general jurisdiction through registration or appointment of an agent.  Matching question marks at the beginning and the end of the alphabet.

This guest post is by Kevin Hara, an associate at Reed Smith and relatively frequent contributor to the Blog.  Here, he discusses two recent favorable procedural developments in further appeals from two really awful decisions by intermediate courts of appeals.  As always, our guest posters are 100% responsible for what they write – due 100% of the credit, as well as any blame.  Take it away Kevin.

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SCOTUS Calls For Solicitor General’s Views In Third Circuit Fosamax Case

Friday December 8 was a day with two items that are particularly noteworthy because of their potentially momentous implications. Remember the Blog’s previous lambasting of the Third Circuit’s unprecedented Fosamax preemption decision and the haymaker that court unleashed on the drug and device industry, in In re Fosamax (Alendronate Sodium) Products Liability Litigation, 852 F.3d 268 (3d Cir. 2017)?  Now, there is positive news to report. The Supreme Court has invited the Solicitor General “to file a brief in this case expressing the views of the United States.” Merck, Sharp & Dohme Corp. v. Albrecht, et al., No. 14-1900 (Order, Dec. 8, 2017).

What is that? Here is SCOTUSBlog’s description:

“CVSG” stands for “call for the views of the Solicitor General.”  In most cases in which someone is seeking review of the lower courts’ decision, the Court will issue a straightforward grant or denial.  But sometimes the Court will want the government’s views on what it should do in a case in which the government isn’t a party but may still have an interest — for example, because the interpretation of a federal statute is involved.  So the Court will issue an order in which it “invites the Solicitor General to file a brief expressing the views of the United States.”  It isn’t an “invitation” in the sense that the federal government gets to decide whether it wants to file a brief at all, because the Court expects the government to file.  There is no deadline by which the government is required to file the brief, however.  And the government’s recommendation, although not dispositive, will carry significant weight with the Court.

In Fosamax, this development is important because it signals that the case stands out from the general certiorari pool, meaning that review is more likely to be granted.  Statistics are surprisingly hard to come by, but a law review article, Thompson & Wachtell, “An Empirical Analysis of Supreme Court Certiorari Petition Procedures:  The Call for Response and the Call for the Views of the Solicitor General,” 16:2 G. Mason L.R. 237 (2009), analyzed ten years of Supreme Court cases (1994-2004) and concluded:

The overall grant rate increases from 0.9% to 34% following a CVSG from the Court; in other words, the Court is 37 times more likely to grant a petition following a CVSG.  For petitions on the paid docket, the grant rate increases even more, to 42%; a paid petition is 47 times more likely to be granted following a CVSG.

Id. at 245 (emphasis added).  If those somewhat dated statistics are even close to currently accurate, the Fosamax CVSG is a big deal.

Recall that the Third Circuit grossly misinterpreted the “clear evidence” preemption test from Wyeth v. Levine, which held that without clear evidence that the FDA would not have approved the label change, a court cannot rule a manufacturer’s compliance with federal and state law is impossible, and thereby preempted, already an exacting defense.  As the Blog explained in praising the petition for certiorari, the Third Circuit distorted Levine, applied an unprecedented standard, and ruled that a manufacturer could not invoke preemption without “clear and convincing” evidence that the FDA would have rejected a proposed warning.  Thus, not only did the Third Circuit reverse summary judgment for the manufacturer in more than 1000 cases, it rendered impossibility preemption even more difficult than the anti-preemption justices in Levine intended.  The Blog also discussed the Product Liability Advisory Council’s amicus brief in support of the petition here, which explained that the Third Circuit’s decision invites further lower court confusion, obliterates the district court’s ruling that was supported by undisputed evidence, encourages pharmaceutical manufacturers to flood the FDA with proposed label changes, and threatens to stifle the innovation necessary to develop new, potentially life-saving drugs.

This latest development raises defense hopes that SCOTUS will grant the petition, and finally reverse one of the worst decisions of 2017, which would be a huge win for the manufacturer in particular, and of greater significance for the big picture for pharmaceutical companies and consumers in general. Stay tuned.

New Jersey Supreme Court Grants Review of Accutane Cases

Also on December 8, the New Jersey Supreme Court granted the appeals in all of the Accutane cases that the appellate court revived back in July. The Blog has monitored the Accutane litigation through many of the twists and turns of its tortuous existence for more than a decade, first with the Accutane MDL, and then with the New Jersey cases.  As a resident of the San Francisco Bay Area, when I think of the Accutane litigation, I automatically picture Lombard Street, often touted “The Crookedest Street In The World,” with its eight hairpin turns and switchbacks that span the 600 feet of the street’s natural 27° grade.  In fact, Lombard Street is not even the most crooked street in San Francisco, because Vermont Street, has a greater sinuosity at 1.56 versus 1.2 for Lombard, though Vermont at seven turns, has one fewer than its more famous cousin.   Lombard Street and its adornment of brick red and beautiful flowers attracts thousands of tourists per year.  This meandering avenue is difficult to traverse, requires careful navigation, has been around a long time, and produced extreme frustration for those who occupy it: if it sounds familiar, bear in mind that the Accutane litigation likewise has a lengthy history, ongoing since 2003, has zigged and zagged, and neither side is particularly thrilled with the results.  The Blog has discussed many of the good aspects here, (vacating plaintiff verdicts) here, (dismissals based on learned intermediary doctrine) here, (MSJ granted) and here (warnings adequate as a matter of law), as well as the very bad Appellate Division decisions earlier this summer, when the court reinstated more than 2000 causation based dismissals.

With that in mind, here is a very brief summary of the mind-bending history of the Accutane saga and the battle over the proper expert testimony that has hopefully neared its dénouement.  As already discussed at length, the Appellate Division reversed the trial court’s decision that excluded plaintiffs’ expert causation testimony, reviving more than 2000 lawsuits.  Not surprisingly, the manufacturer appealed, supported by amicus briefs from 21 of New Jersey’s largest employers, including many Roche competitors, the HealthCare Institute of New Jersey, the New Jersey Chamber of Commerce, the American Medical Association, and eight scholars and professors of law.  When it comes to expert testimony, New Jersey unfortunately travels The Road Not Taken, applying a “relaxed” standard of expert testimony in toxic tort cases, as set forth in Rubanick v. Witco Chemical Corp., 125 N.J. 421 (1991), rather than the more rigorous federal Daubert standard.  Under Rubanick, expert testimony may be admitted “even though it is controversial and its acceptance is not widespread,” only if “it is based on a sound methodology that draws on scientific studies reasonably relied on in the scientific community and has actually been used and applied by responsible experts or practitioners in the particular field.”  Id. at 447.  In Kemp v. State, 174 N.J. 412, 425-426 (2002), the court ruled that the inquiry was not based on reasonableness, but instead examines “whether comparable experts in the field [would] actually rely on that information.  Kemp, 174 N.J. at 426 (citations and quotations omitted).  Since Rubanick and Kemp, New Jersey courts have continued the state’s unique application of scientific expert testimony with an approach distinct from the more exacting federal standard, resulting in inconsistency, confusion, and the morass of the Accutane litigation.

As the Blog discussed, and the amici explained, the Accutane trial judge applied a standard similar to Daubert, but the Appellate Division reversed the decision based on Rubanick. In so doing, the appellate court essentially ignored the gold standard of scientific evidence, epidemiological studies all but one which failed to “demonstrate[] a statistically significant increased risk of developing Crohn’s disease.”  In re Accutane Litigation, 451 N.J. Super. 153, 168  (App. Div. July 28, 2017).  Nonetheless, the Appellate Division allowed the plaintiffs’ experts to rely on evidence that should have been excluded as unreliable, such as animal studies, anecdotal case reports, and analogous medicines – in other words, scientifically unsound data.  Id. at 165-166.  Similarly to the Fosamax decision, this represents not only bad law and bad precedent, but also has far-reaching implications.  Pharmaceutical manufacturers and health professionals resoundingly decried the Accutane decision as one that will stifle research and development, and the practice of medicine out of the uncertainty of scientific evidence, and fear of legal reprisals.  The amici implored the New Jersey Supreme Court to adopt Daubert’s methodology to reaffirm the trial court’s role as a gatekeeper to ensure that only reliable scientific evidence informs the jury’s decision.  Again, the industry can take heart in the court’s order granting review of the Appellate Division’s abysmal decision, and hope that the New Jersey Supreme Court will allow modern scientific principles, rather than the unreliable and questionable methods, to govern expert testimony.  If that occurs, no doubt will the New Jersey high court reinstate the trial court’s ruling, and order dismissal of the more than 2000 cases for lack of  causation evidence.

We have a guest post today, from Luther Munford of Butler Snow.  He’s been doing some thinking about how something analogous to the “two schools of thought” medical malpractice doctrine should apply to medical product liability cases.  As always with out guest posts, our posters deserve 100% of the credit, and any blame, for their posts.

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When the law addresses medical judgment directly, it allows room for reasonable physician choice.  It is ironic then, that a product liability suit over design defect may not allow any such room.  In order to protect physician choice, courts need to resist the temptation to turn product liability disputes into a contest in which reasonable physician choice has no place.

In medical malpractice litigation, where the standard of care is directly in issue, there is room for diversity of opinion.  The jury focuses on the doctor’s choices.  And if, in the light of a diversity of medical opinion, the doctor’s conduct was reasonable, there is no liability.  Steven. E. Pegalis, 1 Am. Law Med. Malp. § 3:3 (2017) (“reasonably applicable alternative methods of diagnosis or treatment” allowed).  As it is phrased in Pennsylvania, if there are “two schools of thought,” the doctor is free to pick one over the other.  Jones v. Chidester, 610 A.2d 964, 969 (Pa. 1992) (“school of thought” means “a considerable number of recognized and respected professionals”).  See also Velazquez ex rel. Velazquez v. Portadin, 751 A.2d 102, 107-108 (N.J. 2000) (allowing practice with “substantial support as proper practice by the medical profession”) (quoting Schueler v. Strelinger, 204 A.2d 577, 585 (N.J. 1964)).

But in a product liability case over defective design, there may be no room for reasonable choice.  Design defect law may ask a jury whether there is any “safer alternative” to a defendant’s device, and, if the jury believes there is, the defendant’s device may be found defective and presumably unsuitable for sale to anyone.  In fact, this question can arise whether or not there is a specific “safer alternative design” requirement in state law because the plaintiff may simply offer such a design as evidence of unreasonable risk. In answering the question, the jury will be asked to choose which expert witness is “most credible” without any allowance for reasonable differences of opinion.

If the law is going to protect a doctor’s ability to exercise reasonable medical judgment in choosing among available devices and surgeries, the question is what needs to be done to keep the unsuitable instrument of design defect litigation – where the doctor may not even be a witness and there is no pre-suit screening panel — from taking away those choices.  Only if the doctor has a choice can the doctor have the ability to determine the best method of treating the patient.

There are at least five ways design defect law can be shaped to protect doctor choice.

First, there is the question of actual doctor choice.  Where the surgeon has chosen not to employ an alternative, perhaps because of the surgeon’s education, training and experience, the jury should not be allowed to find the manufacturer liable because a choice the surgeon rejected might be deemed by the jury to be  “safer.”  See Anderson v. PA Radocy & Sons, Inc., 865 F. Supp. 522, 531 (N.D. Ind. 1994) (manufacturer not liable for employer’s decision to purchase uninsulated fiberglass bucket rather than insulated one); James. A. Henderson & Aaron. D. Twerski, Optional Safety Devices: Delegating Product Design Responsibility to the Market, 45 Ariz. St. L.J. 1399, 1417 (2013) (delegation to learned intermediary defeats design liability).

Second, a court should apply established product liability law principles and exclude from any list of “safer alternatives” those alternatives that present different advantages and disadvantages that require doctor choice, such as a different treatment or different surgery.

This is consistent with the way product liability generally protects consumer choice.  It is generally accepted that, to be a “safer alternative design,” the design must be for the same product, not a different one.  A different product may be safer in one respect, but if it serves different distinct purposes, it cannot provide a basis for finding the less safe product defective.  Informed consumers remain free to choose, and manufacturers are allowed to innovate.  The issue comes up in a variety of product liability contexts.

For example, the Fourth Circuit held in an early negligence case that, given the “peculiar purposes of [the] design” of a Volkswagen bus to provide room for passengers and cargo by placing the driver in front of the engine, a plaintiff could not argue that the design was unsafe because it was not as crashworthy as that of a passenger sedan.  The court granted judgment as a matter of law for the defendant.  Dreisonstok v. Volkswagenwerk, A.G., 489 F.2d 1066, 1074 (4th Cir. 1974), followed in Restatement (Third) of Torts: Product Liability § 2, cmt. f, illus. 9 (1998).  Similarly, a safer bullet proof vest does not make a bullet proof vest with less coverage unreasonably dangerous when the vest allows a greater range of motion.  Linegar v. Armour of Am., Inc., 909 F.2d 1150, 1154 (8th Cir. 1990); see also Hosford v. BRK Brands, Inc., 223 So.3d 199, 208 (Ala. 2016) (smoke alarm not defective just because a more expensive dual-sensor alarm was sold).

This principle is particularly apt in the field of medical devices where different products offer different sets of benefits and complications and whose “safety” depends on professional judgment and, in the case of devices, surgical skill.  Like the learned intermediary doctrine, device defect law should recognize that the doctor relies not only on what the manufacturer has supplied, but also “other medical literature, and any other source available to him, and … the personal medical history of his patient.”  Lebowitz v. Ortho Pharmaceutical Corp, 307 A.2d 449, 457 (Pa. Super. 1973).  The Texas Court of Appeals so held in a hormone therapy case:

[A] plaintiff cannot prove that a safer alternative design exists by pointing to a substantially different product, even when the other product has the same general purpose as the allegedly defective product . . .  Thus, a safer alternative design must be one for the product at issue . . . [Plaintiff] does not explain how [the drug] could have been modified or improved . . .  In essence, [plaintiff] argues that the [drug] should have been a different product . . .  But, as the supreme court has explained, Texas law does not recognize this sort of categorical attack on a product.

Brockert v. Wyeth Pharm., Inc., 287 S.W.3d 760, 770-71 (Tex. App. 2009). See also In re Propulsid Prod. Liab. Litig., No. MDL 1355, 2003 WL 367739, at *3-4 (E.D. La. Feb. 18, 2003) (alternative or different methods of treatment insufficient to prove alternative design).

In medical device cases, courts have held that different devices which perform in different ways cannot be treated as safer alternatives. The principal authorities come from the pedicle screw cases where the courts refused to accept other fixation devices, such as those involving hooks and wires, as presenting safer alternative designs.  The Fifth Circuit explicitly gave doctor choice as a primary reason for its holding.  It said:

[Plaintiff] therefore argues that other products that do not use pedicle screws should be considered as alternative designs . . .  Underlying this argument is the assumption that all pedicle screws are defective and there can be no system using pedicle screws that would be an acceptable product.  The problem with this argument is that it really takes issue with the choice of treatment made by [plaintiff’s] physician, not with a specific fault of the pedicle screw sold by [defendant].

Theriot v. Danek Med., Inc., 168 F.3d 253, 255 (5th Cir. 1999).

Similarly, in other device cases it has been held that a treatment that uses no device at all cannot be considered as a safer alternative.  As the United States District Court for the District of Nevada explained:

Neither is the Court swayed by Plaintiff’s argument that the testimony of [the expert] to the effect that Plaintiff’s [surgery] could have been accomplished without use of [the product].  The fact that an alternative method of [surgery] was potentially available does not support Plaintiff’s design defect claim.  As argued by Defendants, non-mesh repair is not an alternative design and does not meet Plaintiff’s burden to support this particular claim.

Schmidt v. C.R. Bard, Inc., No. 2:11-CV-00978-PMP, 2013 WL 3802804, at *2 (D. Nev. July 22, 2013).

While this rule would have its most direct application in states with a safer alternative design requirement, it would not be limited to those states.  It should apply wherever alternative design is used as a basis for declaring a device unreasonably dangerous.  In Driesenstock, the Fourth Circuit’s Volkswagen bus case, the issue was whether the alternative could be used to prove the defendant’s negligence.  And in Linegar, the Eighth Circuit’s bullet-proof vest case, the question was whether the vest was unreasonably dangerous.  In neither case was there a specific safer alternative design requirement.  See James Beck (“Bexis”), On Alternative Design, Take Two – Negligence, Drug and Device Law Blog (Feb. 27, 2017) (use of alternative design in negligence cases).

[Editorial note:  The Massachusetts Niedner decision (discussed here) is also an excellent example of this application]

Third, even where the products might be very similar, the jury should not be asked to choose between two products where either one is supported by a “school of thought” or “substantial medical opinion.”  From the “doctor’s choice” perspective, it is error for a court to intervene in the diagnosis and treatment of a patient in order to dictate the treatment of a patient when reasonable medical professionals could disagree.  For example, one court recognized the “same product” requirement but nevertheless said a jury could find that an alternative was safer if it did not alter “a fundamental and necessary characteristic of the product.”  Hines v. Wyeth, No. CIV. A. 2:04-0690, 2011 WL 1990496, at *8 (S.D.W. Va. May 23, 2011) (citing Torkie-Tork v. Wyeth, 739 F. Supp. 2d 895, 900 (E.D. Va. 2010)).  In that case the court said it was for the jury to decide whether natural progestin and synthetic progestin were different products. Id. at *9.  But if either choice would be within the doctor’s standard of care, that difference should not matter.

Fourth, the principle of reasonable doctor choice could also be used to interpret comment k to the Restatement (Second) of Torts §402A.  That comment rules out design defect liability for medical products if a proper warning is given and the device is “unavoidably unsafe.”  This has sometimes been incorrectly said to simply import a risk-utility test.  Mullins v. Ethicon, Inc., 117 F. Supp. 3d 810, 818-819 (S.D.W. Va. 2015).  But a better reading would be to say that a medical product is “unavoidably unsafe” and so qualifies for comment k protection if its use, within the professional standard of care, presents a risk of injury to the patient.  That would, for example, be true of nearly all implantable medical devices. See James Beck (Bexis), Unavoidably Unsafe PMA Medical Devices, Drug and Device Law Blog (Nov. 30, 2017).

Finally, the principle of doctor choice might be a basis for excluding from evidence actions of the federal Food and Drug Administration based on a comparison of one treatment to another if both treatments were considered to be within the doctors’ standard of care.  Congress has told the FDA that it is not to “limit or interfere with the authority of a health care practitioner to prescribe or administer any legally marketed device to a patient….”  21 U.S.C. § 396 (2009).  Nevertheless, the FDA does take regulatory actions based not on independent judgments about safety and effectiveness but rather upon comparisons among methods of treatment.  A negative comparison that failed to recognize reasonable doctor choice should be just as inadmissible as expert testimony that failed to apply the correct liability standard.  See, e.g., United States v. Wintermute, 443 F.3d 993, 1001 (8th Cir. 2006).

If the principle of doctor choice were applied in design defect law, it would be necessary to decide what theories of design defect liability would survive.  Certainly a device not considered to be within the standard of care would face liability if it were so egregiously dangerous as not to have any justifiable therapeutic use.  Or if scientific testing proved a way to design the same product so that it was both safer and equally effective, that might be considered in some jurisdictions.

And none of this would directly affect liability for failure to warn, because any rule that rests on doctor’s choice has to assume that doctors are aware of the complications that may arise out of use of the device.

A lot of us attended the annual ACI Drug & Medical Device Litigation Conference in New York City last week.  One of the messages sent loud and clear from the initial client round table panel is that our clients don’t like surprises, and it is helpful to them to know information about potential litigation possibilities (read:  threats), even if they are not current targets.

So that’s what we’re doing here today – about a topic that wasn’t even the topic of a separate presentation at this year’s ACI Conference. That threat is innovator liability.  For those of you not familiar with litigation jargon, this is the term that litigators, particularly those on our side of the “v.,” use for plaintiff-side litigation theories seeking to hold manufacturers of branded drug products liable for injuries caused by competing generic products that our clients didn’t make.

Yes, innovator liability is an inherently absurd theory that contravenes the most foundational principle of strict liability – that the manufacturer of a defective product should be responsible for injuries caused by that product.  That’s why innovator liability is usually brought on a misrepresentation/fraud theory, rather than under “traditional” product liability theories.  Because branded manufacturers are required by federal law to allow generic products to take (for free) their labels and use them verbatim, innovator liability theories posit that it is “foreseeable” that “fraud” or “misrepresentation” purportedly occurring with respect to branded labels could lead physicians to prescribe generic drugs bearing the same labeling at some unknown future date.  It also lets the actual manufacturer of the allegedly “defective” product that actually caused harm off the hook, even though the manufacturer controls everything else about how the product is manufactured and promoted.

Since 90% or so of the current prescription drug market is generic, innovator liability is a very dangerous – indeed existential – threat to the branded drug industry.  Potentially 10% of the prescription drug market share would be forced to shoulder 100% of possible liability, not only with that additional liability bailing out current business competitors, but also being effectively uninsurable because it does not arise from a defendant’s own products and is potentially unlimited in both amount and time.

Plaintiffs pursue innovator liability currently for one reason only – the deterrent effect of preemption on claims brought against the manufacturers of generic products.  Such preemption is now likely to continue in full effect for the foreseeable future, with the FDA’s regulatory attempt to change the rules to eliminate generic preemption now effectively over, and with the threat of additional appointments of anti-preemption Supreme Court justices very likely minimal as well, for the time being.

Innovator liability was not even a separate topic at this year’s ACI conference.  With good reason.  As detailed in our innovator liability scorecard and in our 50 state survey, the defense side has been winning the overwhelming majority of the decisions that have addressed such theories.

Here’s the big however.

Most of this litigation so far has been decided in federal court, and in federal court, with jurisdiction based on diversity of citizenship, the Erie principle favoring conservative applications of state law over radical changes has worked strongly to the defense’s advantage in federal cases.  No federal circuit court has ever recognized innovator liability, and given the state of Illinois law (see our 50 state survey), we don’t see the Seventh Circuit becoming the first.

No, the problem is with state courts of last resort, which are not constrained by Erie.  So far there have been two high court decisions on innovator liability – and our side’s success rate there is only 50%.  We lost in Wyeth, Inc. v. Weeks, 159 So.3d 649, 656-76 (Ala. 2014).  Weeks was overturned by the legislature almost before the ink was dry, so it looks like a hiccup, but we have to wonder, if it could happen in Alabama, could it happen anywhere?  The answer was “no” in Iowa, the only other high court decision so far. See Huck v. Wyeth, Inc., 850 N.W.2d 353, 369-81 (Iowa 2014).  Huck, however, was actually a 4-4 split decision that operated as an affirmance only because the defendant had won below, and the Huck justices who saw things our way did so in part (how much a part is unclear) because of the pendency of the FDA’s now-dead rule on generic labeling.  Id. at 380-81 (“the FDA’s proposed rule . . . would abrogate the Mensing holding, permitting consumers of generic drugs to bring a claim against generic manufacturers”).

Plaintiffs are aware of this.  We’re not giving anything away here.  They have thus been trying to move the innovator liability theater of litigation operations to state-court appeals for years.  And they have finally been able to do so.  Right now, the issue is pending in three high courts:  California, T.H. v. Novartis Pharmaceuticals Corp., 199 Cal. Rptr.3d 768, 774-82 (Cal. App. 2016), review granted & depublished, 371 P.3d 241 (Cal. June 8, 2016) (discussed here); Massachusetts, Rafferty v. Merck & Co., 33 Mass. L. Rptr. 464, 2016 WL 3064255, at *5-7 (Mass. Super. May 23, 2016) (discussed here), appeal granted, No. SJC-12347 (Mass. 2017); and West Virginia, McNair v. Johnson & Johnson, 694 Fed. Appx. 115, 120 (4th Cir. 2017) (discussed here), certified question accepted, No. 17-0519 (W. Va. Sept. 1, 2017).

The California and Massachusetts appeals have been argued, and we wish we had better news to report.  As we discussed, the California argument was mostly about the “perpetual liability” aspects of the case (that the defendant branded company had left the market years before the plaintiff was exposed to a generic product), so there is a distinct possibility that the California Supreme Court will either bypass the basic innovator liability question or worse allow it.  In Massachusetts – another notoriously liberal tort jurisdiction – too many members of the Supreme Judicial Court for our liking were asking questions about under what conditions (such as scienter) innovator liability could be permitted.  The West Virginia Supreme Court of Appeals is not as radically pro-plaintiff as it was back when it rejected the learned intermediary rule, see Johnson & Johnson v. Karl, 647 S.E.2d 899 (W. Va. 2007).  However, one judge remains from the Karl majority, and the situation of generic drug using plaintiffs without anyone they can sue is certainly present.  After all, if it could happen in Alabama, it could happen anywhere.

So what happens if the tide starts to turn in 2018 on innovator liability?  It certainly could, and because of the magnitude of the potential threat, we can’t ignore it.  As stated at ACI, our clients don’t like surprises, particularly surprise threats, so we’re letting you know that from our perspective, the threat is real.  Moreover, particularly in California and Massachusetts, we can’t expect a legislative fix of the sort that came through in Alabama.

And if state high courts start what the other side could argue to be a “trend,” what does that do to the current monolith of federal court decisions?

So what’s Plan B?

Congress appears right well paralyzed on any issue like this.  Aside from cutting their donors’ taxes, we don’t expect much there.

That leaves the FDA.  Could it be persuaded to issue a regulation preempting innovator liability?  There is that 1962 uncodified “direct conflict” preemption clause, and a lot of FDA statements about how its regulatory scheme is not supposed to change the standards of common-law liability.  That is one plausible outcome, but plaintiffs would be active, too, demanding an end to preemption of generic products.  Does a regulatory fix for innovator liability thus degenerate into a three-way fight between branded, generic, and plaintiffs?  That’s a recipe for paralysis, as well.

How does one litigate an innovator liability case?  Unlike a product liability case, the defendant isn’t a manufacturer, so it doesn’t have access to design, manufacturing, warning, and adverse report information about the product that actually caused (allegedly) the plaintiff’s harm.  At minimum that’s a serious discovery problem.  Will the solution be joining generic drug manufacturers as third-party defendants?  That would be a fine finger-pointing mess, and what would the consequences be for preemption?  Even the DDLaw Blog might be forced to take sides, which for eleven years we have been able to avoid doing.  Who knows, depending on where a plaintiff chose to sue, it might be difficult under BMS to obtain personal jurisdiction over the generic manufacturer.  These are just a few of the questions that broader adoption of innovator liability would pose.

We don’t like being the ones to point out the dark clouds on the horizon.  We’d much rather celebrate defense wins – and we hope we do in T.H., Rafferty, and McNair.  But our clients don’t like surprises, and given the size of the threat posed by innovator liability, we’d be remiss not to point out what we know/fear is out there.  After all, innovator liability is not even on the ACI’s own agenda (although it was mentioned) this year.  So a word to the wise.  Don’t be caught napping.  Think about Plan B.

This guest post is by Reed Smith‘s Matthew Jacobson.  It discusses the FDA’s recent guidance on the hot topic of 3D printing as a manufacturing practice for regulated drugs and medical devices, but not biologics (at least not yet).  As always with our guest posts the author is 100% responsible for the content.

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A lot has happened over the past 19 months, some good, some bad, and some just unbelievable. To name a few, and without sounding like a remake of We Didn’t’ Start the Fire, a total solar eclipse, a new human organ was discovered, Brexit, another royal engagement, the Patriots had the largest comeback in Super Bowl history, fourteen top-level people have “left” the presidential administration (not counting the entire Obama administration), Tim Tam’s became available in the U.S., and Bexis and I wrote the most comprehensive law review article to date on the product liability implications of 3D printing.

And as we prepare to head into 2018, the U.S. Food and Drug Administration (FDA) gave us another headline releasing its guidance for Technical Considerations for Additive Manufactured Medical Devices and issuing a statement from FDA Commissioner Scott Gottlieb M.D. on a “new era of 3D printing of medical products.”  For those daily readers, you may remember that we first reported on the guidance when it was in its draft form in May 2016—19 months ago. In that time, FDA has been evaluating comments and feedback provided by entities in the 3D printing industry. The final guidance is, as you may expect, substantively similar to its draft form. As we see it, that is good news, that the new administration’s approach on 3D printing of medical devices is the same as the old—which is rare these days.

The FDA Commissioner says the agency has reviewed more than 100 medical devices and one drug that are currently on the market, which are being manufactured by 3D printers.  He goes on to say that the “FDA is now preparing for a significant wave of new technologies” and that the FDA is “working to provide a more comprehensive regulatory pathway that keeps pace with those advances, and helps facilitate efficient access to safe and effective innovations that are based on these technologies.”  That regulatory framework will need to adjust how “existing laws and regulations that govern device manufacturing [apply] to non-traditional manufacturers like medical facilities and academic institutions that create 3D-printed personalized devices for specific patients they are treating”—in other words, point of treatment device fabrication.  The FDA is also researching the technology itself, has its own 3D printing labs and is providing opportunities for “innovative approaches to pharmaceutical product design or manufacturing, including additive manufacturing of pharmaceuticals.”  In fact, according to the statement “[m]ore than a dozen pharmaceutical manufacturers have formally or informally been in contact with [the FDA’s Center for Drug Evaluation and Research] regarding the use of 3D printing to manufacture drugs.”

The guidance, according to the FDA, is intended to provide FDA’s thoughts on 3D printing and is meant to evolve as the technology grows.  As was its draft version, it is still split up into two categories of considerations: 1) design and manufacturing and 2) device testing.  Both sections overlap in substance, and the device testing section in particular provides strong, detailed recommendations for what a device manufacturer should include in a premarket submission for a device that uses additive manufacturing as a manufacturing technique.

Some noteworthy additions to the draft guidance (we are not repeating what we said then) that us non-technical folks noticed in the latest guidance are:

    • The final guidance adds that patient-matched devices (devices that are based on or “matched” to a specific patient’s anatomy, usually based on medical imaging data) are especially vulnerable to file conversion errors because “anatomic curves are typically geometrically or mathematically complex, which can create difficulties when calculating conversions.”
    • The guidance also adds a section on cybersecurity and privacy related to protecting personally identifiable information and protected health information, which can be an issue for patient-matched devices.
    • Establishing control limits to make sure that a product meets all predetermined requirements when it is “printed.”
    • Pointing out that use of workflow that automates one or more software steps should be considered.
    • Adding to the “Material Controls” section materials of animal origin and composite materials

For the most part it appears the guidance’s changes, some of which we noted above, focused on the different types of 3D printers that are available and each printer’s unique characteristics, which may vary from brand to brand and with the type of material used. The guidance also seems to focus more on providing examples rather than trying to be all inclusive, which will allow for the technology to develop, without the need for the guidance to be updated.

We have been waiting a while for this final guidance to be released. Unfortunately, we may have to wait even longer for the FDA to release a guidance on the truly novel medical devices, which are 3D printed with biomaterials, such as stem-cells.  Dr. Gottlieb says that the FDA “envision[s] that burn patients in the near future will be treated with their own new skin cells that are 3D printed directly onto their burn wounds” and “the potential for this same technology to eventually be used to develop replacement organs.”  However, based on the timing of the FDA’s past communications with 3D printing, it may be longer than 19 months this time. Who knows, by then we may be dealing with the FDA’s position on 3D printing under the Rock’s presidency.

We update our cheat sheet devoted to ediscovery for defendants differently than the others.  Because of the broad nature of the topic – these cases arise in a wide variety of non-drug/device contexts – other personal injury, employment, civil rights, occasionally even criminal litigation.  That means we have to research them separately to find what we need to include.  That is more taxing than our usual routine because it means looking through hundreds of cases to find the ones that are:  (1) on point, and (2) favorable to our side of the “v.”  Thus, it has been a while since we last updated, but we just did it now.  The new opinions are below, and every one of them either allows access to a plaintiff’s social media activity or imposes sanctions (often for spoliation) on plaintiff for resisting such discovery.

Once again, although we’ve read all the relevant social media discovery cases, we include only the good ones – because we don’t believe in doing the other side’s research for them.  A couple of words to the wise arising from the rest are appropriate.  First and foremost, if you’re representing a defendant and are considering making a broad request for social media discovery at the very outset of the case – DON’T.  Without anything more solid than generalized suspicions as reason for a deep dive into an opponent’s social media, courts are not impressed and are likely to treat it as a “fishing expedition.”  Most of the time a blanket social media discovery demand will succeed only when the defendant has caught the plaintiff in a lie – with contradictory public social media evidence − or the plaintiff has attempted to delete or otherwise hide social media activity.  The key word is “investigate.”  Once the tip of the spear penetrates a plaintiff’s shenanigans, the rest follows more easily.

Second, in the absence of such hard evidence, the defense is well advised to start small, with less intrusive discovery.  Instead of asking for everything at once, check with an ediscovery specialist and consider proposing sampling – 5% or 10% of all posts – as something less intrusive, but statistically likely to find contradictory evidence if it exists.  An active social media user (the type most likely to generate useful information) will usually have published thousands of posts and other types of entries.  In that situation, sampling is very likely to reveal something significant present in a plaintiff’s social media.  The sampling can then support a broader discovery demand.

With those caveats, here is the latest favorable set of cases in which defendants have successfully engaged in discovery of plaintiffs’ electronic activities:

  • Shawe v. Elting, 157 A.3d 142 (Del. Feb. 13, 2017). Plaintiff properly sanctioned for deliberate and reckless deleting email and text messages by being ordered not only to pay all expenses of recovery but also a percentage of defendant’s total counsel fees, due to the spoliation complicating the conduct of the litigation general.
  • State v. Johnson, 2017 WL 1364136 (Tenn. Crim. App. April 12, 2017). Although the Shared Communications Act prohibited criminal defendants from obtaining a witness’ social media content from social media platforms, the defendant had established good cause to obtain such evidence directly from the witnesses who were social media users. They are not privileged. The subpoenae to the witnesses were not oppressive.
  • Lawrence v. Rocktenn CP LLC, 2017 WL 2951624 (Mag. W.D. La. April 19, 2017). Plaintiff must produce all text messages, photographs and videos that concern: (1) plaintiff’s physical capabilities; (2) that allegations in the complaint; (3) emotional distress; (4) any decline in plaintiff’s marriage; (5) alternative causes of the injuries; and (f) plaintiff’s activities during the claimed period of disability.
  • Flowers v. City of New York, 55 N.Y.S.3d 51 (N.Y. App. Div. June 20, 2017). Evidence from plaintiff’s public social media contradicted the plaintiff, thereby justifying discovery from plaintiff’s private social media accounts, including deleted material, relating to the same subject matter. Plaintiff shall provide a release to obtain material, including metadata, from the provider.
  • Walker v. Carter, 2017 WL 3668585 (S.D.N.Y. July 12, 2017). Plaintiff sanctioned for failure to produce relevant text messages. Must pay defendant’s increased attorney’s fees.
  • Ottoson v. SMBC Leasing & Finance, Inc., ___ F. Supp.3d ___, 2017 WL 2992726 (S.D.N.Y. July 13, 2017). Plaintiff sanctioned for failure to preserve text messages and emails concerning the events at issue. The jury will be instructed on an adverse spoliation inference.
  • Jones v. U.S. Border Patrol Agent Gerardo Hernandez, 2017 WL 3525259 (Mag. S.D. Cal. Aug. 16, 2017). Plaintiff must produce a GPS-based map generated by his fitness watch.
  • Ehrenberg v. State Farm Mutual Automobile Insurance Co., 2017 WL 3582487 (Mag. E.D. La. Aug. 18, 2017). With respect to social media, plaintiffs must produce posts and photos: (1) relating to the accident, (2) relating to all physical injuries whether or not caused by the accident, (3) reflecting plaintiff’s physical activity, (4) relating to plaintiff’s emotional distress; (5) relating to alternative emotional stressors; (6) concerning plaintiff’s vacations.
  • Calleros v. Rural Metro, Inc., 2017 WL 4391714 (Mag. S.D. Cal. Oct. 3, 2017). In class action over alleged deprivation of rest breaks, defendant is entitled to social media discovery of any activity plaintiffs engaged in while on company time.

When it comes to design defect claims and FDA pre-market approved (“PMA”) medical devices, “preemption” is our reflexive reaction. That’s entirely reasonable, given the many decisions that preempt state-law design-related claims since Riegel v. Medtronic, Inc., 552 U.S. 312 (2008).  We collect then all here.

Nevertheless, there are some judges, particularly (but not all) in state court, who react negatively to the very concept of preemption.  Thus, a word to the wise is not to put all your dismissal eggs in one basket.  One logical alternative argument starts with the same premise as preemption – that “the FDA requires a device that has received premarket approval to be made with almost no deviations from the specifications in its approval application.”  Riegel, 552 U.S. at 323.

The “almost no deviations” limitation, of course applies to device design.  E.g., Walker v. Medtronic, Inc., 670 F.3d 569, 580 (4th Cir. 2012); Blunt v. Medtronic, Inc., 760 N.W.2d 396, 409 (Wis. 2009); McLaughlin v. Bayer Corp., 172 F. Supp. 3d 804, 810 (E.D. Pa. 2016); Kitchen v. Biomet, Inc., 2014 WL 694226, at *3 (E.D. Ky. Feb. 21, 2014); Miller v. DePuy Spine, Inc., 638 F. Supp. 2d 1226, 1229 (D. Nev. 2009).

Which brings us to Restatement (Second) of Torts §402A, comment k (1965), “which insulates from liability manufacturers of unavoidably unsafe products that are properly prepared and accompanied by an adequate warning.”  Rodriguez v. Stryker Corp., 680 F.3d 568, 575 (6th Cir. 2012) (applying Tennessee law).  Putting aside the separate (albeit important) issue whether comment k applies to prescription medical products generally or only on a case-by-case basis, courts on both sides of that question equate “unavoidably unsafe” with the absence of an alternative design:

[N]umerous state and federal courts ha[ve] interpreted comment k to mean that a product is “unavoidably unsafe” when, given proper manufacture and labeling, no feasible alternative design would reduce the safety risks without compromising the product’s cost and utility.

Bruesewitz v. Wyeth LLC, 562 U.S. 223, 256 (2011) (Breyer, J. concurring) (footnote containing string citation omitted) (emphasis added).  In other words, “a defendant seeking to invoke the [comment k] defense must first show that the product is highly useful and that the danger imposed by the product could not have been avoided through a feasible alternative design.”  Mutual Pharmaceutical Co. v. Bartlett, 133 S. Ct. 2466, 2487 (2013) (applying New Hampshire law).  To avoid a claim of “unavoidable risk, there must be, at the time of the subject product’s distribution, no feasible alternative design which on balance accomplishes the subject product’s purpose with a lesser risk.”  Toner v. Lederle Laboratories, 732 P.2d 297, 306 (Idaho 1987).  “The purpose of comment k is to protect from strict liability products that cannot be designed more safely.” Grundberg v. Upjohn Co., 813 P.2d 89, 92 (Utah 1991).  Grundberg and Toner don’t agree on much when it comes to comment k, but they agree on the importance of alternative design.

Thus, that a PMA-approved device must be made with “almost no deviations” from its specified design means (in addition to preemption) that there is no legal alternative design that would allow the plaintiff to avoid a manufacturer’s comment k defense.  To use a non-approved alternative design would be illegal – and illegal designs cannot serve as “feasible” alternative designs.  See Lewis v. American Cyanamid Co., 715 A.2d 967, 981 (N.J. 1998} (“plaintiff may not succeed on an alternative design theory that would have required the defendant manufacturer to violate the law”); White v. Wyeth Laboratories, Inc., 533 N.E.2d 748, 753-54 (Ohio 1988) (alternative design not feasible where “it was not possible for [defendant] to have legally marketed a [product] design using [the alternative design] at the time [plaintiff] was inoculated”); Ackley v. Wyeth Laboratories, Inc., 919 F.2d 397, 401 (6th Cir. 1990) (following White; alternative designs did not “exist[]” where it was “indisputable” that “[w]ithout an FDA license to produce another design, [defendant] was legally prohibited from distributing” those designs) (applying Ohio law); Wolfe v. McNeil-PPC, Inc., 773 F. Supp.2d 561, 572 (E.D. Pa. 2011) (when “[t]here exists no FDA-approved alternative form of [the product],” “there is no available alternative design”); Militrano v. Lederle Laboratories, 769 N.Y.S.2d 839, 847-48 (N.Y. Sup. 2003) (where plaintiff proposed a non-FDA-approved alternative, defendant “could not have marketed a reasonable alternative”), aff’d, 810 N.Y.S.2d 506 (N.Y.A.D. 2006); In re Alloderm Litigation, 2015 WL 5022618, at *12 (N.J. Super. Law Div. Aug. 14, 2015 (no feasible alternative where design plaintiff advocated “was not approved by the Food and Drug Administration until” after plaintiffs’ surgeries); Totterdale v. Lederle Laboratories, 2008 WL 972657 (W.Va. Cir. Mar. 19, 2008) (where FDA approval not until after plaintiff’s injury plaintiff did “not provide[] any new material facts to raise a genuine issue as to whether [the product] was avoidably unsafe”).

Thus, in Gross v. Stryker Corp., 858 F. Supp.2d 466 (W.D. Pa. 2012), comment k applied to “a Class III medical device which received FDA approval pursuant to the PMA process.” Id. at 481 (footnote omitted).

Moreover, the inherently rigorous nature of the premarket approval process and the contraindications, warnings, and precautions described in the [device’s] Summary of Safety and Security Data all suggest that [it] is an “unavoidably unsafe” product to which strict liability does not apply.

Id. at 482.  “As a result, the [device] can be considered a prescription medical device that falls within the scope of comment k to § 402A.”  Id.

Similarly, the court employed the non-preemption path of comment k in Aaron v. Medtronic, Inc., 209 F. Supp.3d 994 (S.D. Ohio 2016).  While Ohio (at the relevant time, this has now changed, Ohio Rev. Code Ann. §2307.75(D)) was a case-by-case comment k state, the PMA approved nature of the device, and the constraints the FDA’s approval placed on alternative designs, meant that comment k had to apply:

Defendant argues . . . that [the device’s] classification by the FDA as a Class III medical device inherently means that it is unavoidably unsafe and that Comment K’s prohibition of strict liability claims therefore applies. Defendant’s argument is well taken.  Class III devices . . . are, as relevant here, defined as devices that are “for a use which is of substantial importance in preventing impairment of human health, or…present[] a potential unreasonable risk of illness or injury.”  21 U.S.C. §360c(a)(1)(C)(ii). . . .

[T]here is no alternative design for [the device] that could lawfully be marketed.  “Once a device has received premarket approval, the MDA forbids the manufacturer to make, without FDA permission, changes in design specifications…that would affect safety or effectiveness.” There is therefore no basis for an in-depth evidentiary inquiry into alternative designs.

Aaron, 209 F. Supp.3d at 1013-14 (quoting Riegel, 552 U.S. at 319) (other citations omitted).

So while preemption should do the trick with design defect claims involving PMA approved medical devices, courts may sometimes have an easier time with alternative, non-constitutional arguments such as the lack of any legal alternative design under Restatement §402A, comment k.  Consider giving judges this other way to the end result that we all want – dismissal of design defect claims.

As our PMA preemption scorecard makes clear, warning claims are preempted under Riegel v. Medtronic, Inc., 552 U.S. 312 (2008), because the preemptive language, “different from or in addition to,” precludes plaintiffs from demanding more or different warnings.  Since warning claims are the bread and butter of prescription medical product liability, plaintiffs will try just about anything to get around that simple fact.

One common plaintiff-side tactic is to relabel failure to warn as “fraud.”  Plaintiffs then argue that “fraud” claims shouldn’t be preempted, either because they are predicated “on a more general obligation[,] the duty not to deceive,” Cipollone v. Liggett Group, Inc., 505 U.S. 504, 528-29 (1992), or because they are a “parallel” claim associated both with that “general” state-law duty and FDA regulations prohibiting “false or misleading” statements.

While sometimes plaintiffs gain some traction with “fraud” claims asserting affirmatively false statements, most failure to warn claims involve omissions.  Thus, plaintiffs are also wont to argue that “fraudulent concealment” or “fraud by omission” claims should also be unpreempted.  Here plaintiffs lose.  Such concealment/omission claims are always at least “in addition to” a PMA device’s FDA-approved labeling.

The key case, Perez v. Nidek Co., 711 F.3d 1109 (9th Cir. 2013), held that not only is a “fraud by omission claim [] expressly preempted” – but “obvious[ly]” so.  Id. at 1118.

The teachings from the Supreme Court cases plus our application of MDA preemption . . . lead to an obvious result:  [plaintiff’s] fraud by omission claim is expressly preempted by § 360k(a).  [T]he [omission] claim here depends on a requirement that is “in addition to” those federal requirements.  [Plaintiff] effectively seeks to write in a new provision to the FDCA: that physicians and medical device companies must affirmatively tell patients when medical devices have not been approved for a certain use. . . .  Just as significant, the alleged missing disclosure . . . “relates to the safety or effectiveness” of the [PMA device].

Id. at 1118-19 (emphasis added).   See Martin v. Medtronic, Inc., 2017 WL 825410, at *7 (E.D. Cal. Feb. 24, 2017) (following Perez; fraudulent concealment claim expressly preempted); Frere v. Medtronic, Inc., 2016 WL 1533524, at *10 (C.D. Cal. April, 6, 2016) (same); Jones v. Medtronic, 89 F. Supp.3d 1035, 1050 (D. Ariz. 2015) (same); Hawkins v. Medtronic, Inc., 2014 WL 346622, at *6 (E.D. Cal. Jan. 30, 2014) (same).

This rationale means that, the “distinction between claims premised on false misrepresentations and those premised on omissions” has been described as “the key dividing line” for preemption purposes.  Schouest v. Medtronic, Inc., 13 F. Supp.3d 692, 701 (S.D. Tex. 2014).

The affirmative misrepresentation/omission distinction is representative of the two types of claims [plaintiff] is asserting: on the one hand, that [defendant] did not do enough, and on the other, that [defendant] did too much.

Id.

In another claim, like Perez and Schouest, alleging failure to warn of risks of off-label use of a PMA device as “fraudulent concealment,” the court held such claims expressly preempted to “to the extent it is based on any alleged omissions or concealments.” Byrnes v. Small, 142 F. Supp.3d 1262, 1269 (M.D. Fla. 2015).

Plaintiffs have not identified any federal requirement to inform the public or to update warning labels regarding the dangers of the off-label use of medical devices.  Therefore, to the extent this claim is premised on [defendant’s] alleged concealment of information . . ., it is expressly preempted, because requiring [defendant] to warn [prescribers] of the dangers of the off-label use of [the device] would clearly be different from, or in addition to, the federal requirements.

Id. (citation, footnote, and quotation marks omitted).

In Sadler v. Advanced Bionics, Inc., 929 F. Supp.2d 670 (W.D. Ky. 2013), state “law for fraudulent omissions . . . requires that the defendant have a duty to disclose information.”  Id. at 683 (citation omitted).

Plaintiffs cite no federal duty to disclose to the public or to patients the omitted information.  Therefore, to the extent Plaintiffs assert that [defendant] was under some state law duty to disclose, this amounts to an additional requirement, which §360k expressly preempts.

Id. at 683-84 (citation and footnote omitted)

In Leonard v. Medtronic, Inc., 2011 WL 3652311 (N.D. Ga. Aug. 9, 2011), the plaintiffs claimed that their concealment allegations were “actually a fraud claim” when faced with a preemption motion.  That dodge went nowhere:

This claim is preempted because it would require [defendant] to give different, additional warnings about the [device’s] safety and effectiveness, which is strictly prohibited without FDA approval. . . .  Plaintiffs’ fraud claim thus necessarily imposes state requirements that are “different from, or in addition to” the federal ones.

Id. at *11 (citation omitted).

Likewise, in Littlebear v. Advanced Bionics, LLC, 896 F. Supp. 2d 1085, 1091 (N.D. Okla. 2012), the plaintiff “d[id] not claim [defendant] made any affirmative misrepresentations” but only that it did not disclose its use of a purportedly non-FDA-approved part.  Id. at 1091.  Since no FDA regulation mandated such a disclosure, the “fraud by nondisclosure [wa]s expressly preempted.”  Similarly, in Purcel v. Advanced Bionics Corp., 2010 WL 2679988 (N.D. Tex. June 30, 2010), plaintiff’s “claims of fraud by nondisclosure . . . impose a requirement in addition to those approved by the FDA — the duty to warn consumers if devices are adulterated − and are therefore preempted.”  Id. at *6. See Burrell v. Bayer Corp., ___ F. Supp.3d ___, 2017 WL 1955333, at *8 (W.D.N.C. May 10, 2017) (fraudulent concealment claims “alleg[ing] misrepresentations [that] are indistinguishable from FDA-approved labeling statements” held preempted); Richardson v. Bayer Healthcare Pharmaceuticals, Inc., 2016 WL 4546369, at *9 (D. Idaho Aug. 30, 2016) (“fraud by concealment claim addresses essentially the same conduct as the failure to warn claim” and is expressly preempted because state “law cannot require stronger duties than the FDA actively requires under the MDA”); Humana Inc. v. Medtronic Sofamor Danek USA, Inc., 133 F. Supp.3d 1068, 1076 n.12 (W.D. Tenn. 2015) (“fraud by omission is expressly preempted under the FDCA”) (quoting Perez, supra); Day v. Howmedica Osteonics Corp., 2015 WL 13469348, at *8 (D. Colo. Dec. 24, 2015) (“because Plaintiffs’ concealment and misrepresentation claims take issue with the labeling and representations made regarding the [device] and the clinical trial of the device, these claims are preempted”); Cline v. Advanced Neuromodulation Systems, Inc., 17 F. Supp.3d 1275, 1288 (N.D. Ga. 2014) (“[t]o the extent Plaintiff’s fraud claim is based on Defendant’s omissions of information regarding known device failures, it is preempted”); Ali v. Allergan USA, Inc., 2012 WL 3692396, at *17 (E.D. Va. Aug. 23, 2012) (“The cause of action for fraud by nondisclosure is also preempted by the MDA because it would impose requirements under [state] law that add to federal requirements on statements [defendant] can make concerning [the device].”); Latimer v. Medtronic, Inc., 2015 WL 5222644, at *8 (Ga. Super. Sept. 4, 2015) (“a fraud by omission claim is expressly preempted . . . because the underlying state-law disclosure requirement would necessarily be different from, or in addition to the requirements applicable” under federal law) (quoting Perez, supra).

The converse is also true. In McLaughlin v. Bayer Corp., 172 F. Supp.3d 804 (E.D. Pa. 2016), the basis for the plaintiffs’ fraudulent concealment claim against the maker of a PMA device was an alleged “duty to disclose” under the FDCA.  Id. at 825.  Because “[t]he Complaint in this case alleges only that federal law and the PMA imposed a duty to speak by requiring [defendant] to disclose certain information,” it was impliedly preempted under Buckman Co. v. Plaintiffs Legal Committee, 531 U.S. 341 (2001).  172 F. Supp.3d at 825 (emphasis original).  Since plaintiffs “do[] not allege that [state] law imposed any duty on [defendant] to disclose the allegedly undisclosed information . . ., the “fraudulent concealment claim, as pled, exists ‘solely by virtue of FDCA requirements,’” and was thus preempted under BuckmanId.  Accord Perez, 711 F.3d at 1119-20 (fraud by omission claim impliedly preempted because premised on defendant’s non-disclosure concerning scope of FDA’s premarket approval); Houston v. Medtronic, Inc., 957 F. Supp. 2d 1166, 1178 (C.D. Cal. 2013) (fraudulent concealment claim impliedly preempted); Bush v. Thoratec Corp., 837 F. Supp.2d 603, 608-09 (E.D. La. 2011) (same).

Since fraudulent concealment/omission claims in PMA device litigation are merely failure to warn claims with a scienter requirement – and scienter is irrelevant to express preemption under §360k – it is only fitting that these claims are preempted for the same fundamental reasons as warning claims.

We know that our blogposts are carried by legal aggregating services, such as Lexology and JDSupra.  Some of you may even be reading this post via one of these services.  In addition to writing for them, we actually read them, too.  Sometimes we find interesting things on them – like last week.

A bit of background, first.  Other than providing readers with:  (1) a post on how the municipal cost recovery rule is useful against municipal/county attempts to recover the cost of governmental services (actually, so can the economic loss and derivative injury rules, but we haven’t blogged about those − yet); and (2) some other posts on how the in pari delicto doctrine can be employed to defeat suits by individuals harmed by their own criminal activity, we haven’t had all that much to say about the “opioid epidemic.”  It’s a fast moving area, and to some extent it resembles the spate of litigation over firearms marketing (where Bexis became familiar with municipal cost recovery) a couple of decades ago.  In other ways it resembles something much more sinister – how the states ganged up to extort money from various cigarette companies after the companies had consistently prevailed in ordinary product liability litigation.

So while we feel we should have something to say about this “opioid epidemic” litigation threat to our clients, it’s difficult to decide what.  We were very interested to read – on JDSupra – a recent thought-provoking article entitled “De-Bunking the Opioid Litigation Epidemic.”  That blogpost is mostly about how overheated “opioid epidemic” rhetoric (and litigation) has outrun any basis in science.  Briefly, it makes the following points:

We compliment the Kelley Drye folks for this effort, and encourage our readers to read the whole article.

So what can we add?  We point out that, as to the last bullet point, injuries from illegal opioid use are precisely the sort of injuries that the in pari delicto doctrine was designed to preclude from being recovered in litigation.

Well, what about the states as plaintiffs?  In general we’re big fans of off-label use.  We never tire of pointing out that off-label use is 100% legal under the FDCA, and that the FDA cannot prevent physicians from prescribing FDA-approved drugs (which include opioids) for any therapeutically appropriate treatment, whether or not that indication appears on a drug’s FDA-approved labeling.  As the Supreme Court has held, “‘off-label’ usage . . . is an accepted and necessary corollary of the FDA’s mission to regulate in this area without directly interfering with the practice of medicine.”  Buckman Co. v. Plaintiffs Legal Committee, 531 U.S. 341, 350 (2001) (citing Beck & Azari, FDA, Off-Label Use, & Informed Consent: Debunking Myths and Misconceptions, 53 Food & Drug L.J. 71, 76-77 (1998)) – yes, that Beck, as in Bexis.

So who can restrict the rights of physicians to prescribe drugs for off-label uses?  That would be the states, in their traditional roles of regulators of medical practice.

It is elemental that a state has broad power to establish and enforce standards of conduct within its borders relative to the health of everyone there.  It is a vital part of a state’s police power.  The state’s discretion in that field extends naturally to the regulation of all professions concerned with health.

Barsky v. Bd. of Regents, 347 U.S. 442, 449 (1954).

We recognize that the States have a compelling interest in the practice of professions within their boundaries, and that as part of their power to protect the public health, safety, and other valid interests they have broad power to establish standards for licensing practitioners and regulating the practice of professions.

Goldfarb v. Virginia State Bar, 421 U.S. 773, 792 (1975).

“The State, in the performance of its duty to protect and preserve the public health, has the power, within constitutional limitations, to regulate the practice of medicine by those engaged therein.”  Comm’n on Medical Discipline v. Stillman, 435 A.2d 747, 755 (Md. 1981).  “[P]rofessional licensing and regulation is a traditional area of state power.”  Edinboro College Park Apartments v. Edinboro University Foundation, 850 F.3d 567, 577 n.9 (3d Cir. 2017).  “It is well established that a state can legitimately impose broad regulations on the practice of medicine through its police powers to protect the health, safety, and welfare of its citizens.”  People v. Rogers, 641 N.W.2d 595, 605 (Mich. App. 2001).  “States retain the police power to regulate professions, such as the practice of medicine.”  Betancur v. Florida, 296 F. Appx. 761, 763 (11th Cir. 2008).  The “the valid police power the legislature exercise[s] when it regulate[s] the practice of medicine” is widely recognized. State v. Pacific Health Center, Inc., 143 P.3d 618, 626 (Wash. App. 2006).

These general propositions apply to controlled substances, such as opioids. “[E]nforcement of the Controlled Substances Act to prevent illegal or illegitimate drug trafficking by registered medical professionals does not intrude upon the states’ ability to regulate the practice of medicine in accordance with their police powers.”  United States v. Brickhouse, 2016 WL 2654359, at *7 (Mag. E.D. Tenn. March 30, 2016), adopted, 2016 WL 2350137 (E.D. Tenn. May 4, 2016).  They also apply to off-label use.  “[R]egulation of the practice of medicine generally lies within the States’ police powers.”  United States v. Kaplan, 2014 WL 4402586, at *4 (D. Nev. Sept. 5, 2014) (off-label use case).

However, except for unusual forays such as informed consent relating to diet drugs (Utah), performance enhancing drugs in sports (Ohio, and probably others), and constitutionally questionable attempts to harass those seeking drug-induced abortions by prohibiting an off-label use that’s actually safer than the outmoded FDA-indicated use, see Cordray v. Planned Parenthood Cincinnati Region, 911 N.E.2d 871, 878 (Ohio 2009) (affirming such a provision), the states have generally not regulated medical practice and off-label uses.

In general, that’s a very good thing.

But if the states are now going to sue drug manufacturers, wholesalers, and others in the chain of sale over what are legal, FDA-approved drugs properly prescribed by state-licensed medical doctors, and properly filled by state-licensed pharmacists, then the states should be required to look in the mirror.  And if counties and other municipalities that are creatures of the states are going to sue over off-label uses that their sovereign states have not seen fit to prohibit, they may find themselves preempted from doing so – by state law.

States could ban precisely the off-label uses they are complaining about, but they haven’t.

Off-label use of prescription opioids (assuming the requirements set by FDA REMS and federal controlled substances regulations are complied with) is by and large perfectly legal under state law.  If the states believe that the risks of particular off-label uses outweigh the benefits, then they have the power to act to prohibit such uses outright.  Where the FDA has actually approved an indication, the result would be different – federal preemption would prevent such action.  But off-label use is state rather than federally regulated.  We thus believe that, for states to sue to recover, say, the costs off-label opioid prescriptions, without having exercised their own authority to prevent the underlying conduct, at minimum runs squarely into the defense of failure to mitigate damages.

So the question is, how much is that argument worth?  That depends on how much opioid use is off label.  We’ll take a look at that question.

It appears the argument might be worth quite a bit. A New England Journal of Medicine article from earlier this year asserts that “the risk-benefit profile of opioids used for chronic pain remains unknown” with “no studies lasting longer than 1 year that evaluated pain, function, or quality of life as a primary outcome.”  Assuming the statement is accurate, it suggests to us that long-term opioid use doesn’t have the level of scientific evidence behind it needed to obtain FDA approval, since “[g]enerally, the agency expects that the drug maker will submit results from two well-designed clinical trials” before approval can be granted.”  Another recent article states:

The FDA doesn’t have the statutory ability to limit the amount of pills or the duration of prescriptions.  However, the agency could deem prescriptions off-label if they’re too large.

Likewise, the FDA believes that “[m]ost analgesic use in pediatric patients is off-label.”  So that’s a second category of opioid prescription that could be off-label and thus regulated by states, rather than by the FDA.

Another place to look is for judicial admissions.  Most complaints (to hype plaintiffs’ damages) can be expected also to allege widespread off-label use, and thus conduct that the relevant state could have regulated, but hasn’t.  In the litigation context, it fits in with a possible narrative against state AG or parens patriae suits – that the plaintiff state, which has legal authority, has done nothing to curb off-label opioid prescriptions, while the FDA, which lacks this authority, has at least tried.

The DEA also appears to have stepped up scrutiny of at least some off-label opioid prescribing, according to this recent (11/9/17) alert from the Academy of Integrative Pain Management:

The Drug Enforcement Administration has recently taken criminal and administrative action against physicians who prescribe transmucosal immediate-release fentanyl (TIRF) off-label for the treatment of breakthrough pain.  Historically, prescribing medications off-label has been a decision left to the discretion of the prescriber based on the specific needs of the patient; therefore, physicians prescribing these products off-label for noncancer breakthrough pain should be aware of this increased scrutiny.

An editorial in the National Review addressed part of this equation, stating “opioids are harmful primarily when they are not used as directed, are cleared for sale by the federal government, and come with government-approved warning labels explaining the risks — all factors that will make judges skeptical of suits” by states.  But it’s even worse than that, since the states are suing, at least in significant part, over the consequences of their own governmental sloth.  Perhaps, having utterly failed to hold up their end, either legislatively or by regulation, a state should be estopped from trying to recover from drug companies for legal activities.

Thus, while we strongly support the right of physicians to prescribe off-label, and the right of everyone – including drug manufacturers – to provide truthful information about off-label uses, we recognize that off-label prescribing is ultimately subject to the police power of the states.  If a state has come to the conclusion that a particular off-label use is doing more harm than good, it has the legal authority (within constitutional parameters) to prohibit that use.  Unless and until a state does so, however, it should not engage in the hypocritical practice of suing over a legal medical practice that it could have stopped but has chosen not to.

Thus, to the extent that the “opioid epidemic” is an off-label use issue, in that respect it is a problem created largely by the failure of the states to utilize their existing police powers.

We have not been shy in predicting that Bristol-Myers Squibb Co. v. Superior Court, 137 S.Ct. 1773 (2017) (“BMS”), and Daimler AG v. Bauman, 134 S. Ct. 746 (2014) (“Bauman”), should restrain certain abusive class action practices – specifically those involving attempts to bring multi-state class actions in any location other than where the defendant is “at home” and therefore subject to general personal jurisdiction under Bauman.  Note use of “the.”  A nationwide class purporting to sue multiple defendants “at home” in different states shouldn’t be possible at all, as BMS makes crystal clear that each defendant’s personal jurisdiction must be determined separately.

For this reason, we have been careful to note the class action nature of any case that appears on our original post-Bauman and our current post-BMS cheat sheets.  The first of these cases is Demaria v. Nissan N.A., Inc., 2016 WL 374145 (N.D. Ill. Feb. 1, 2016), an automotive consumer fraud case with eighteen class representatives from sixteen states.  Id. at *1.  Following Bauman, the court found no general jurisdiction, also rejecting a claim of consent to general jurisdiction by registering to do business in the forum state.  Id. at *6.  Specific jurisdiction failed as to every would-be class representative except the one resident of the forum state. Id. at *7.  Plaintiffs also raised a “pendent personal jurisdiction” claim similar to that later rejected in BMS:

Under the circumstances of this case, where each plaintiff’s claim is predicated on the law of the particular state where he or she purchased a car and the claims of the other plaintiffs as alleged remain unrelated to anything that transpired in [the forum state], imposing personal jurisdiction for all of the claims because specific jurisdiction may lie as to this one plaintiff’s claims would run afoul of the traditional notions of fair play and substantial justice.

Id. at *8.  The multi-state class action was no more.  “The consumer protection claims for violation of the laws of states other than [the forum state] . . . are dismissed for lack of personal jurisdiction.”  Id. at *14.

Then came Matus v. Premium Nutraceuticals, LLC, 2016 WL 3078745 (C.D. Cal. May 31, 2016), which involved a California consumer fraud class action brought by an in-state resident.  After finding no general jurisdiction under Bauman, id. at *2, the court also found no specific jurisdiction.  The defendant’s website was not oriented towards any particular state, nor did plaintiff claim to have used it to purchase anything from the defendant.  Id. at *3.  Simply “purchas[ing the product] through an unnamed reseller” – that is to say, stream of commerce − was insufficient, notwithstanding other product sales to other in-state residents.  Id. at *4.

Back in Illinois, Bauman also did in a multi-state junk fax class action in Kincaid v. Synchrony Financial, 2016 WL 4245533 (N.D. Ill. Aug. 11, 2016).  Anticipating BMS, the court refused to find specific jurisdiction based on forum contacts with the “putative class members” in the forum state counting as “suit-related contacts.”  Id. at *2.  Plaintiffs’ general jurisdiction claims fell far short of the “outsized proportion” of forum contacts required to establish an exceptional case under Bauman.  Id. at *3.  Nor did the defendant’s initiation (as a plaintiff) of unrelated litigation in the forum state create general jurisdiction.  Id.

Next, in Bauer v. Nortek Global HVAC LLC, 2016 WL 5724232 (M.D. Tenn. Sept. 30, 2016), “five Plaintiffs from four different states” brought a panoply of product liability-related claims against a non-resident defendant, purportedly as a class action.  Id. at *1. Bauman killed the out-of-state class representative’s claims, since there was nothing approaching exceptional case facts.  Id. at *6.  Specific jurisdiction failed because “units [that] were purchased and installed in [the class representatives’] respective . . . Home States” could not possibly “arise out of or relate to” any actions by the defendant in the forum state.  Id. at *6.  “[T]he Amended Complaint does not offer any factual allegations that the out-of-state Plaintiffs had any dealings with the Defendants in the” forum state.  Id. Therefore, “those Plaintiffs and the classes they represent will be dismissed.”  Id.

A third Illinois multi-state class action likewise failed in Demedicis v. CVS Health Corp., 2017 WL 569157 (N.D. Ill. Feb. 13, 2017).  This time, a forum plaintiff sought to assert “purely class-based claim[s] on behalf of others for violations of similar state consumer fraud statutes in other states.”  Id. at *3.  While that claim could have been decided on the basis of non-extraterritoriality (see our post here), Demedicis disposed of them on personal jurisdiction grounds:

Because specific personal jurisdiction is based on claims arising out of a defendant’s conduct within the forum state, this Court has no jurisdiction over claims based on out-of-state consumer fraud laws. . . .  As Defendants argue, “[p]ersonal jurisdiction over the defendant must be established as to each claim asserted.”  Here, Plaintiff has not established personal jurisdiction over the out-of-state claims as he is the sole connection between Defendants and Illinois.

Id. at 4-5 (citations omitted).

In Famular v. Whirlpool Corp., 2017 WL 2470844 (S.D.N.Y. June 7, 2017), nine would-be class representatives from nine states brought consumer protection claims against non-resident defendants.  Decided less than two weeks before BMS, Famular threw out all of the claims by non-resident class representatives against the non-resident defendants for lack of personal jurisdiction.  Anticipating BMS, Famular held that “the Court must determine whether there is general personal jurisdiction over each defendant” individually.  Id. at *3.  By then plaintiffs had given up arguing “exceptional case” general jurisdiction, and the court rejected their consent by virtue of registration to do business argument.  “[T]he Court agrees with defendants that . . . a foreign defendant is not subject to the general personal jurisdiction of the forum state merely by registering to do business with the state, whether that be through a theory of consent by registration or otherwise.”  Id. at *4.  Famular also rejected specific jurisdiction under a “pendent personal jurisdiction” rationale.  Relying in part on Demaria, Famular recognized that “neither specific personal jurisdiction nor pendent personal jurisdiction allow[s a court] to hear plaintiffs’ claims against the foreign defendant based on defendant’s actions occurring solely outside the forum state.  Id. at *7.  Good by non-forum-state class action allegations.

BMS, of course expressly held that specific personal jurisdiction must be decided as to each plaintiff and each defendant separately, so that neither the presence of other, in-state plaintiffs making similar claims, nor the presence of an in-state defendant against which personal jurisdiction could properly be asserted permitted the assertion of personal jurisdiction by non-resident plaintiffs against non-resident defendants.  137 S. Ct. at 1781 (lack of specific jurisdiction “remains true even when third parties (here, the plaintiffs who reside in California) can bring claims similar to those brought by the nonresidents”), 1783 (personal jurisdiction requirements “must be met as to each defendant over whom a state court exercises jurisdiction”; the “bare fact” of a “contract[] with” an in-state resident “is not enough”).  We discussed BMS at length here.

After BMS, a consumer protection class action alleging “violations of the consumer protection laws of forty-eight additional [to the forum] states and two territories” was trimmed to just the forum state.  Plumbers’ Local Union No. 690 Health Plan v. Apotex Corp., 2017 WL 3129147, at *1 (E.D. Pa. July 24, 2017).  There was no general jurisdiction against defendants not “at home” in the forum.  Id. at *4.  Nor could defendants that did not sell in the forum be subject to specific jurisdiction.  Id. at *7-8 (even if stream of commerce jurisdiction is viable, it cannot lie without in-state sales).  All of the claims asserted under the laws of the 50 non-forum jurisdictions likewise bit the dust.

Only [plaintiffs’] Pennsylvania Claims arise out of or relate to Selling Defendants’ sales of generic drugs in Pennsylvania. . . .  [T]he Non-Pennsylvania Claims do not arise out of or relate to any of Selling Defendants’ conduct within the forum state.  Accordingly, the Court cannot exercise specific jurisdiction over the Non-Pennsylvania Claims brought against Jurisdiction Defendants.

Id. at *9 (following Demaria and Demedicis).

Another multi-state (four non-forum jurisdictions) consumer class action was trimmed in Spratley v. FCA US LLC, 2017 WL 4023348, at *1 (N.D.N.Y. Sept. 12, 2017).  General jurisdiction by consent based the non-forum defendant’s registration to do business was rejected.  Id. at *3-4.  BMS precluded adjudication of claims asserted by the non-resident classes.  “[T]he out-of-state Plaintiffs have shown no connection between their claims and [defendant’s] contacts with the forum state.  Therefore, the Court lacks specific jurisdiction over the out-of-state Plaintiffs’ claims.”  Id. at *7.  For similar reasons, plaintiffs’ “different” assertion of “pendent jurisdiction” was also rejected.  Id. (following Famular and Demaria).

In an anti-trust case, In re Dental Supplies Antitrust Litigation, 2017 WL 4217115 (S.D.N.Y. Sept. 20, 2017), non-forum class action allegations based on sales made by a defendant’s independent intermediate sellers were dismissed under Bauman and BMS.  General jurisdiction, by this time was not even argued.  Id. at *3.  The would-be class representatives did not buy any of the defendant’s products in the forum state.  Id. at *6.  BMS precluded assertion of personal jurisdiction based merely on the defendant’s contract with an independent distributor, which in turn sold into the forum state.  Id. at *9. Most significantly, Dental Supplies firmly rejected plaintiffs’ argument that personal jurisdiction requirements should be loosened in the class action context.  “A putative class representative seeking to hale a defendant into court to answer to the class must have personal jurisdiction over that defendant just like any individual litigant must.”  Id. at *6 (quoting Newberg on Class Actions §6:25 (5th ed. 2011)).

Plaintiffs attempt to side-step the due process holdings in [BMS] by arguing that the case has no effect on the law in class actions because the case before the Supreme Court was not a class action.  This argument is flawed.  The constitutional requirements of due process does not wax and wane when the complaint is individual or on behalf of a class.  Personal jurisdiction in class actions must comport with due process just the same as any other case.

Id. at *9 (citation omitted).

Most recently, in McDonnell v. Nature’s Way Products, LLC, 2017 WL 4864910 (N.D. Ill. Oct. 26, 2017), the plaintiffs brought class action claims under “seven states’ consumer fraud laws” in addition to the forum state, against a non-resident defendant.  Id. at *1. Bauman and BMS killed the non-forum claims:

[A]ny injury [that non-resident plaintiffs] suffered occurred in the state where they purchased the products. Because the only connection to [the forum] is that provided by [resident plaintiff’s] purchase . . ., which cannot provide a basis for the Court to exercise personal jurisdiction over the claims of nonresidents where [defendant] has no other connection to this forum, the Court dismisses all claims . . . brought on behalf of non-[forum]residents or for violations of [other states’ consumer protection] law without prejudice.

Id. at *4.

Thus, we are now running out of fingers for the cases that have refused, on post-Bauman personal jurisdictional grounds to allow class actions where the effect would be to allow non-resident class members to sue a non-resident corporate defendant.  There is good reason for this.  The Federal Rules of Civil Procedure, and in particular Rule 23, being “rules” are prohibited by the Rules Enabling Act from “abridg[ing], enlarg[ing] or modify[ing] any substantive right.”  28 U.S.C. §2072(b).  See, e.g., Wal-Mart Stores, Inc. v. Dukes, 564 U.S. 338, 367 (2011) (“[b]ecause the Rules Enabling Act forbids interpreting Rule 23 to ‘abridge, enlarge or modify any substantive right,’ a class cannot be certified on the premise that [a defendant] will not be entitled to litigate its statutory defenses to individual claims”) (citations omitted).  Jurisdiction is, if anything, even more “substantive” than the defenses in Dukes.  Without jurisdiction, a plaintiff cannot litigate anything at all.  Nothing could be more “substantive” than to create jurisdiction where none would otherwise exist.

Fundamentally, this is why we disagree with the one decision, Fitzhenry-Russell v. Dr. Pepper Snapple Group, Inc., 2017 WL 4224723 (N.D. Cal. Sept. 22, 2017) that goes the other way.  Plaintiffs in Fitzhenry-Russell purported to bring a “nationwide” class action, even though all of them were California residents and all the causes of action were under California law . Id. at *1, 5.  The court held that because “citizenship of the unnamed plaintiffs is not taken into account for personal jurisdiction purposes,” it was perfectly all right for the action to adjudicate claims by non-resident class members – who made up a “lopsided” 88% of the class – against a non-resident corporation.  Id. at *5.  Fitzhenry-Russell refused an “extension of [BMS] to class actions” by supposing that “this may be one of the those contexts” in which “[n]onnamed class members . . . may be parties for some purposes and not for others” to jurisdiction.  Id.  That’s all there is – a “may be.”  Moreover, the case quoted for that proposition, Devlin v. Scardelletti, 536 U.S. 1, 9-10 (2002), dealt with intervention, not any form of jurisdiction.

Fitzhenry-Russell cited no class action case – let alone one since Bauman (cf. In re Chinese Manufactured Drywall Products Liability Litigation, 894 F. Supp. 2d 819, 858 (E.D. La. 2012) (severing non-resident class member claims in identical situation pre-Bauman), aff’d, 742 F.3d 576 & 753 F.3d 521 (5th Cir. 2014)) – that had permitted personal jurisdiction in a litigation tourist situation, where non-resident absent class members were suing a non-resident corporation.  It found Plumbers’ Local. 690 “unpersuasive” because it supposedly contained “no analysis” of BMS.  2017 WL 4224723, at *5 n.4.  That is a misleading characterization because Plumbers’ Local. 690 devotes four full paragraphs to the issue, although discussing Demaria and Demedicis rather than BMS.  2017 WL 3129147, at *9.  Moreover, other than the footnote reference to Plumbers’ Local. 690, Fitzhenry-Russell addresses neither the other class action personal jurisdiction cases we have discussed in this post (although it must have been aware of at least Demaria and Demedicis) nor the Rules Enabling Act.  We think that the adjective “unpersuasive” more properly applies to Fitzhenry-Russell itself.

Thus, based on what our research has found, we think that our prediction, made shortly after Bauman, that personal jurisdiction would become a major obstacle to nationwide class actions based on state laws is accurate and has even more force after BMS.  Whenever faced with a state-law class action that is structured so that a non-resident (that is, not “at home” under Bauman) corporate defendant would be facing claims brought by non-resident class members (whether named or unnamed), the defendant should strongly consider moving to dismiss that non-resident claims for lack of personal jurisdiction.