Risperdal, an antipsychotic drug prescribed to treat serious mental conditions – schizophrenia, manic depression, and autism – allegedly causes some male users to develop abnormal breast tissue growth. Particularly when compared to the consequences of the conditions Risperdal is indicated to treat, that seems like a relatively minor risk.  It isn’t fatal.  It isn’t a long-term disability.  It doesn’t prevent one from making a living.  Thus, Risperdal litigation is a prime example of low-value cases that only exist because of the mass-tort system that has saddled the country for so long.

Thus, it is hardly surprising that Risperdal cases are on the front lines of the battle to rein in our long national mass-tort nightmare.

Just last week we learned of these two decisions:

(1) Covington v. Janssen Pharmaceuticals, Inc., 2017 WL 3433611 (E.D. Mo. Aug. 10, 2017).  Covington was one of the ridiculously misjoined multi-plaintiff complaints that mashed together residents from all over the country.  Before Bristol-Myers Squibb Co. v. Superior Court, 137 S. Ct. 1773 (2017) (“BMS”), Missouri federal courts routinely remanded these atrocities to the St. Louis litigation cesspool because there was always at least one diversity-destroying non-Missouri plaintiff, as well as one jurisdiction establishing Missouri plaintiff in the bunch.  Covington, 2017 WL 3433611, at *2 (“Historically − and especially in this district − courts generally have addressed subject matter jurisdiction first”).

Not anymore.

Covington is typical of the multi-plaintiff complaint genre – 54 plaintiffs from 26 different states.  2017 WL 3433611, at *1.  “Only one plaintiff” alleged injury from use of the drug “in the state of Missouri.  Id.  As for the rest:

The Non-Missouri plaintiffs, or those who do not have any connection to the state of Missouri, do not allege that they were prescribed Risperdal or any of its variants in Missouri, ingested the same in Missouri, or were injured in Missouri.

Id.

With BMS, the personal jurisdiction issues involving litigation tourism of this sort were largely resolved.  With no fixed “jurisdiction hierarchy,” it was now logical to take up this “more straightforward issue first. ” Id. at *2.

However, these [contrary] cases were decided before [BMS] and State ex rel. Norfolk S. Ry. Co. v. Dolan, 512 S.W.3d 41 (Mo. 2017) (en banc) [our post on Dolan is here].  These decisions make the personal jurisdiction issue in this case much easier to decide. . . .  Further, analyzing the challenge to personal jurisdiction first avoids any issues relating to fraudulent joinder.  Personal jurisdiction is now the more straightforward inquiry and should be addressed first as it is in the interests of judicial economy and expeditiousness.

Id. (citations and quotation marks omitted).

The personal jurisdiction question was easy.  There could be no general jurisdiction.  “[N]o defendant is incorporated in Missouri nor has its principal place of business in Missouri.”  Id. at *4.  ‘Nuff said.  Nor was there specific personal jurisdiction for all but one of the plaintiffs – thus removing the planted plaintiffs from the defendants’ home states.

[B]esides the Missouri plaintiff, no other plaintiff allege that they, or a child or incapacitated person whom they represent as next friend, were prescribed or purchased Risperdal in this state, suffered an injury from Risperdal in this state, or received treatment for an injury from Risperdal in this state.

Id.  The “mere fact that other plaintiffs were prescribed, obtained, and ingested [the drug in Missouri] − and allegedly sustained the same injuries as did the nonresidents − does not allow the State to assert specific jurisdiction over the nonresidents’ claims.”  Id. at *4 (quoting BMS).  Thus 53 of the 54 plaintiffs were dismissed (without prejudice, and with the laws of their home states determining whether an unsuccessful litigation tourism jaunt tolled their statutes of limitations).  A single plaintiff’s low-value case thus remained in Missouri federal court.  Id. at *5.  It probably won’t last long, since the March 8, 2017 filing date was more than a dozen years after 2004, when that plaintiff admits discovering the supposed injury.  Id. at *6.

Plaintiffs mounted unsuccessful rearguard actions in Covington.  They sought a stay – claiming “prejudice” from the need to sort out a supposed jurisdictional morass that they, themselves, created.  That went nowhere.  Id. at *3 (“A motion to stay should not be abused by a party to dictate which motion is first addressed by the Court.”).  They also sought “jurisdictional discovery” – a fishing expedition to search for Risperdal/Missouri contacts.  Covington likewise saw that request for what it was:

Here, the plaintiffs do not plead any specific facts that support their contention that this Court has personal jurisdiction over all of the plaintiffs’ claims. Alleging that facts might be discovered during a jurisdictional discovery expedition will not allow plaintiffs to survive a 12(b)(2) motion to dismiss.

Id. at *5.

Summing up, Covington observed:

Unfortunately for the plaintiffs, [BMS], under the facts of this case, made personal jurisdiction the more straightforward issue and therefore more proper to be analyzed first.  Further, [BMS] held that forums, like Missouri in this action, do not have specific personal jurisdiction over non-resident corporations when the plaintiffs do not allege any specific connection between the forum and the specific claims at issue.

Neither this Court nor the state court in which this action was removed can exercise personal jurisdiction − whether general or specific − over the defendants for the claims brought by the 53 non-Missouri plaintiffs.

Id. at *6.

That’s one.

(2) West v. Janssen Pharmaceuticals, Inc., 2017 U.S. Dist. Lexis 124276 (Mag. M.D. Ala. Aug. 4, 2017).  West is something of the obverse of Covington.  In Covington the plaintiffs joined together in an attempt to manufacture jurisdiction for a horde of weak cases, whereas in West, jurisdiction already existed, so the plaintiffs were trying to join their weak cases together to prejudice the defendant at trial.  Once again, the court wasn’t buying the consolidation.  West involved two plaintiffs, Harper and West, treated at one point by the same prescribing physician, both alleging the same injury from the same drug.  Id. at *2, 11.

But that was as far as the similarities went.

The two plaintiffs were of much different ages; one a minor, the other not. One involved off-label use; the other not.  One involved innovator liability (being filed during the few Weeks window when that theory was allowed in Alabama); the other not.  There were various other differences as well, such as duration of use, and when the drug was prescribed (affecting the relevant warnings), and the age at which the risk allegedly manifested.  Id. at *13-15.

The dissimilarities in the Plaintiffs’ claims have be-come more apparent as discovery and expert testimony have developed.  Harper began taking Risperdal as a five or six-year old and was always a minor while taking the medication.  In contrast, West did not begin taking the medication until he was almost eighteen years old and was physiologically an adult.  The significance of this difference is highlighted by the expert causation testimony. . . .  Further, the consequence of Risperdal not being approved for pediatric use takes on a much different meaning in the two cases.

Id. at *12-13.

These differences precluded a joint trial under Fed. R. Civ. P. 20.  “The critical differences between the claims asserted by Plaintiffs outweigh the similarities between the cases, and the court finds trying the cases together would thus be inefficient and confusing for both the Court and the jury.”  Id. at *14.  The presence of an innovator liability claim in one of the cases demonstrated their legal as well as factual disparity.  Id. at *15-16.  Further, “West and Harper were prescribed multiple prescriptions, written at different times by different physicians and in different doses at different physiological stages of their lives.”  Id. at *16.

Thus, two disparate plaintiffs could not claim injury “from the same series of transactions” as required by Rule 20. Id. at *17.  No consolidation synergies for these two weak cases.

*          *          *          *

Two Risperdal cases; two different jurisdictions; two attempts by plaintiffs to manipulate joinder to the disadvantage of defendants defeated.  We look forward to similar rulings in the future.

 

 

Posts on personal jurisdiction, or the lack of it, have been all over this blog ever since the Supreme Court decided Bristol-Myers Squibb Co. v. Superior Court. Something similar happened three years ago after the Supreme Court decided Daimler AG v. Bauman. Together, these two decisions establish that federal courts are not empowered to find a reason to assert personal jurisdiction simply because the defendant is a large company doing business nationally. General jurisdiction requires the state in which the federal court sits to be the defendant’s “home,” meaning that it was incorporated there or has its principle place of business there. Specific jurisdiction requires that the very transaction from which the plaintiff’s claims arose involve the state in which the federal court sits. Otherwise, the court should dismiss the case. These decisions hold the promise of virtually eliminating litigation tourism.

But the plaintiffs in the Pinnacle Hip Implant MDL are trying to resurrect it, if only in their own litigation. The MDL is pending in federal court in Dallas. And yet the MDL court recently held, seemingly, that it can exert personal jurisdiction against the defendants and conduct trials in every case before it, even those that have no connection to Texas.

As many of us know, MDL courts have jurisdiction over the many cases that are transferred to them, but only for pretrial purposes. The transfer does not create personal jurisdiction for trial. Cases over which the MDL court does not have such personal jurisdiction must be transferred for trial back to the originating district court—or an appropriate district court that can exert personal jurisdiction. 28 U.S.C. 1407(a).

So, how is the MDL court doing this? Well, the lack of personal jurisdiction defense is waivable. And that’s where the MDL court is hanging its robe. It ruled in its June 28, 2017 decision that the defendants waived their defense of lack of personal jurisdiction—and not just for cases already tried, but (seemingly) for every Pinnacle hip implant case that has been filed and will be filed and that makes its way to the MDL. The defendants made this perpetual waiver, according to the MDL court, during proceedings before the special master, who at the time was working to arrange the first and second bellwether trials.

The defendants vehemently disagree. They say that their waiver, given the setting and the very language that they used, was limited only to personal jurisdiction as to the cases involved in the first and second bellwether trials, not all cases and forever. They believe this so strongly that they have filed a petition for a writ of mandamus to the Court of Appeals for the Fifth Circuit, asking that court to order that the MDL Judge cannot exercise personal jurisdiction in any of the eight cases with New York plaintiffs that the MDL court scheduled for the next bellwether trial, which starts in September.

It’s a petition for a writ of mandamus, so from the start defendants’ chances of victory are slim. But, last year, even in losing a petition for a writ of mandamus on another issue, the defendants got one of the Circuit Court judges (in a concurring opinion) to say that the MDL judge got it wrong. We’ll see what happens here. Plaintiffs must respond by the 14th. And the Fifth Circuit will almost certainly rule before September 5, when this next multi-plaintiff bellwether trial is set to begin.

The Pinnacle hip implant litigation is never without intrigue.

In the wake of the defense wins during the last Supreme Court term in Bristol-Myers Squibb Co. v. Superior Court, 137 S.Ct. 1773 (2017) (“BMS”), and BNSF Ry. Co. v. Tyrell, 137 S. Ct. 1549 (2017), we’re retiring the personal jurisdiction cheat sheet we had been maintaining for the last three-plus years since Daimler AG v. Bauman, 134 S.Ct. 746 (2014) (“Bauman”).  That cheat sheet, as our readers know, had covered general jurisdiction cases generally – all areas, not just prescription medical product liability, or product liability generally.  That was a big undertaking, but we did it because litigation tourism was, and remains, a huge issue for our clients.  Now we think that, between them, BMS, BNSF, and Bauman have now settled the larger general jurisdiction point.

So we think we can be more focused going forward in our ongoing monitoring of personal jurisdiction cases. So we’re creating a new cheat sheet devoted to a couple of specific lingering issues.  The first of these issues is the so-called (at least by us) “jurisdiction by consent” theory – that general personal jurisdiction is created in a state when a corporation registers to do business/appoints an agent for service of process in a state.  Since all states have such registration statutes, recognition of that theory would do what the United States Supreme Court has now held multiple times that Due Process prohibits – allowing a corporation to be sued in many jurisdictions where it is not “at home” by anybody, in particular out-of state litigation tourists.  Not surprisingly, since Bauman most courts have rejected this theory (as the cases below demonstrate) as incompatible with Due Process, but since the Supreme Court has not put a stake through itself, plaintiffs still raise it relatively frequently.

Almost all of the older – that is to say, pre-BMS − decisions in this new cheat sheet address jurisdiction by consent theories.  We were keeping specific track of jurisdiction by consent cases in our original cheat sheet, so we’ve pulled out those cases and compiled them here.

Another reason for keeping track of jurisdiction by consent cases is that we litigate a lot in Pennsylvania, and we expect Pennsylvania to be Ground Zero for the battle over this theory.  An unfortunate combination – Pennsylvania’s unique registration statute (42 Pa. C.S.A. §5301) that actually specifies “general” jurisdiction, and adverse pre-Bauman Third Circuit precedent interpreting Pennsylvania law (Bane v. Netlink, Inc., 925 F.2d 637, 640-41 (3d Cir. 1991)) – have led some Pennsylvania courts to ignore constitutional Due Process as interpreted by BMS and Bauman and hold mandatory registration to do business in Pennsylvania somehow to equate with “consent” to general jurisdiction.  E.g., Plumbers’ Local Union No. 690 Health Plan v. Apotex Corp., 2017 WL 3129147, at *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); Bors v. Johnson & Johnson, 208 F. Supp.3d 648, 653–55 (E.D. Pa. 2016).

Surely, most Pennsylvania lawyers and judges learned in law school like we did that a state statute can’t override federal constitutional Due Process guarantees, but the litigation tourism industry in Pennsylvania is entrenched and well-funded.  Given that that most of plaintiffs’ other favorite jurisdictions:  California, Illinois, Missouri, and New Jersey, to name a few (see below for details), do not recognize jurisdiction by consent as a matter of state law, we expect to have a ring-side seat as the consent issue is eventually appealed, perhaps interlocutorily, from some Pennsylvania court all the way to the United States Supreme Court if necessary.

The second jurisdictional theory we’ll be keeping track of in this cheat sheet is what we call “BMS-lite.”  This is a litigation tourist’s last gasp in jurisdictions, such as those listed below, that have already rejected jurisdiction by consent. BMS-lite is the variant of specific jurisdiction based on corporate activities related, not to any plaintiff’s case, but to the product in general, that plaintiffs will argue somehow “caused” their injuries in a broad sense and thus justifies opening the courthouse doors in multiple states to litigation tourists.  We discussed an early example of that recently, and the theory’s most notable exemplar, M.M. v. GlaxoSmithKline LLC, 61 N.E.3d 1026 (Ill. App. 2016), is currently pending on certiorari before the Supreme Court. See GlaxoSmithKline LLC v. M.M., No. 16-1171 (U.S. filed March 23, 2017). M.M. (and the post-BMS case we discussed) predicated “specific” jurisdiction on the very non-specific fact that some of the drug’s clinical trials (17 of 361) included in-state investigators.  And, as the certiorari petition states, only “three percent of the study sites in those 17 trials were in [the state], involving a mere two percent of the study participants.”  Petition at 9.  This petition has been distributed for the Supreme Court’s 9/25/17 conference, so M.M could be vacated or reversed sometime this fall.

The type of facts that M.M. seized upon to preserve Illinois’ litigation tourism business  don’t involve the plaintiffs, so “a defendant’s relationship with a third party, standing alone, is an insufficient basis for jurisdiction.” BMS, 137 S. Ct. at 1781 (citation and quotation marks omitted).  Short of a major causal tie – such as the product being manufactured in the forum state in a manufacturing defect case – we don’t think BMS-lite theories are of any greater constitutional validity than what was rejected in BMS itself, so we’ll also be collecting favorable cases that make such holdings.  But so far, given how recent BMS is, we haven’t seen any favorable cases.  We expect them to be coming.

As always, with cheat sheets, we don’t do the other side’s research for them, so we won’t be including any bad cases.

With all this in mind, here is our Post-BMS Personal Jurisdiction Cheat Sheet:

  1. Byham v. National Cibo House Corp., 143 S.E.2d 225 (N.C. 1965) (North Carolina) (non-product liability).  Denial of motion to dismiss affirmed on specific jurisdiction grounds. The casual presence of an agent for service of process is not enough to subject a corporation to suit on causes of action unconnected with the activities within the state.
  2. Ratliff v. Cooper Laboratories, Inc., 444 F.2d 745 (4th Cir. June 29, 1971) (South Carolina) (prescription medical product liability). Denial of motion to dismiss reversed.  Application to do business and the appointment of an agent for service does not establish general personal jurisdiction.
  3. In re Mid-Atlantic Toyota Antitrust Litigation, 525 F. Supp. 1265 (D. Md. Oct. 14, 1981) (West Virginia) (non-product liability).  Motion to dismiss granted.  Registration to do business is not consent to general personal jurisdiction. Modified on other grounds, 541 F. Supp. 62; affirmed on other grounds, 704 F.2d 125.
  4. Pearrow v. National Life & Accident Insurance Co., 703 F.2d 1067, 1069 (8th Cir. 1983) (Arkansas) (non-product liability).  Grant of motion to dismiss affirmed.  Appointment of an agent for service of process does not create general personal jurisdiction.
  5. Gray Line Tours v. Reynolds Electrical & Engineering Co., 238 Cal. Rptr. 419, 421 (Cal. App. June 5. 1987) (California) (non-product liability).  Grant of motion to dismiss affirmed.  Designation of an agent for service of process and qualification to do business in California alone was not consent to general jurisdiction.
  6. Goodyear Tire & Rubber Co. v. Ruby, 540 A.2d 482 (Md. 1988) (Maryland) (non-product liability).  Denial of motion to dismiss reversed.  Agent for service of process insufficient to permit general jurisdiction.
  7. Sandstrom v. ChemLawn Corp., 904 F.2d 83 (1st Cir. May 17, 1990) (Maine) (product liability – non drug/device).  Grant of motion to dismiss affirmed.  Corporation that was licensed to do business in forum and had appointed agent for service of process did not consent to general personal jurisdiction.
  8. Wilson v. Humphreys (Cayman) Ltd., 916 F.2d 1239 (7th Cir. Oct. 24, 1990) (Indiana) (non-product liability).  Denial of motion to dismiss remanded.  Registration to do business alone is not a basis for general personal jurisdiction.
  9. Wenche Siemer v. Learjet Acquisition Corp., 966 F.2d 179 (5th Cir. July 17, 1992) (Texas) (product liability – non drug/device).  Grant of motion to dismiss affirmed.  Registration to do business and appointment of agent for service of process is not consent to general personal jurisdiction.
  10. Leonard v. USA Petroleum Corp., 829 F. Supp. 882 (S.D. Tex. Aug. 17, 1993) (Texas) (non-product liability).  Motion to dismiss granted.  Registration to do business was not automatic consent to general personal jurisdiction.
  11. Arkwright Mutual Insurance Co. v. Transportes de Nuevo Laredo, 879 F.Supp. 699 (S.D. Tex. Aug. 31, 1994) (Texas) (non-product liability).  Motion to dismiss granted.  A certificate to do business does not create general personal jurisdiction.
  12. Samuelson v. Honeywell, 863 F. Supp. 1503 (E.D. Okla. Aug. 31, 1994) (Oklahoma) (non-product liability).  Motion to dismiss granted.  General personal jurisdiction could not be asserted over corporation based on its registration to do business.
  13. Washington Equipment Manufacturing Co. v. Concrete Placing Co., 931 P.2d 170 (Wash App. Feb. 13, 1997) (Washington) (non-product liability).  Grant of motion to dismiss affirmed.  That foreign corporation had registered to do business and appointed agent in state did not confer general personal jurisdiction.
  14. Sofrar, S.A. v. Graham Engineering Corp., 35 F. Supp.2d 919 (S.D. Fla. Feb. 5, 1999) (Florida) (non-product liability). Motion to dismiss granted.  Appointment of an agent for service of process and registration to do business were insufficient to create general personal jurisdiction.
  15. Allied Carriers Exchange, Inc. v. All. Shippers, Inc., 1999 WL 35363796, at *3 (D. Colo. Sept. 22, 1999) (Colorado) (non-product liability).  Transfer granted.  Appointment of a registered agent does not necessarily subject a foreign corporation to general jurisdiction.
  16. Freeman v. Second Judicial District, 1 P.3d 963 (Nev. June 9, 2000) (Nevada) (non-product liability). Mandamus from grant of motion to dismiss denied.  The mere act of appointing an agent to receive service of process does not subject a non-resident corporation to general jurisdiction.
  17. Consolidated Development Corp. v. Sherritt, Inc., 216 F.3d 1286 (11th Cir. July 5, 2000) (federal law) (non-product liability).  Grant of motion to dismiss affirmed.  On a federal claim, the casual presence of a corporate agent for service of process anywhere in the United States is not enough to subject an overseas corporation to general personal jurisdiction.
  18. DVI, Inc. v. Superior Court, 128 Cal. Rptr.2d 683 (Cal. App. Dec. 24, 2002) (California) (non-product liability).  Mandamus granted, reversing denial of motion to dismiss.  Designation of an agent for service of process and qualification to do business alone are insufficient to permit general jurisdiction.
  19. Tyler v. Gaines Motor Lines, Inc., 245 F. Supp.2d 730 (D. Md. Jan. 30, 2003) (Maryland) (non-product liability).  Transfer granted.  Having a registered agent for service of process is not consent to general personal jurisdiction.
  20. Reynolds & Reynolds Holdings, Inc. v. Data Supplies, Inc., 301 F. Supp.2d 545 (E.D. Va. Feb. 5, 2004) (Virginia) (non-product liability).  Motion to dismiss granted.  Complying with registration statutes and appointing an agent for service of process do not amount to consent to general personal jurisdiction.
  21. Norfolk Southern Railway Co. v. Burlington Northern, 2005 WL 1363210 (S.D. Miss. June 2, 2005) (Mississippi) (non-product liability).  Motion to dismiss tentatively granted, pending jurisdictional discovery.  Registration to do business and appointment of agent for service of process is not consent to general personal jurisdiction.
  22. DNH, LLC v. In-N-Out Burgers, 381 F .Supp.2d 559 (E.D. La. June 24, 2005) (Louisiana) (non-product liability).  Motion to dismiss granted.  Qualifying to do business in a state and appointing an agent for service of process there do not amount to a general business presence that could sustain general personal jurisdiction.
  23. Bray v. Fresenius Medical Care Aktiengesellschaft Inc., 2007 WL 7366260 (N.D. Ill. Aug. 30, 2007) (Illinois) (prescription medical product liability). Motion to dismiss granted.  Registration to do business and appointment of agent for service of process is does not alone support general personal jurisdiction.
  24. Keston v. FirstCollect, Inc., 523 F. Supp.2d 1348 (S.D. Fla. Oct. 31, 2007) (Florida) (non-product liability).  Motion to dismiss granted.  Presence of a corporate agent for service of process and a license to do business in a state are not enough to support general personal jurisdiction.
  25. Rosenruist-Gestao E Servicos LDA v. Virgin Enterprises Ltd., 511 F.3d 437 (4th Cir. Dec. 27, 2007) (Virginia) (non-product liability).  Quashing of subpoena affirmed.  Appointment of an agent for service of process is a contact so minimal that it cannot render a company subject to any form of personal jurisdiction consistent with Due Process principles.
  26. Miller v. Robertson, 2008 WL 270761 (D. Utah Jan. 29, 2008) (Utah) (non-product liability).  Motion to dismiss granted.  Appointment of an agent for process and registration to do business do not create general personal jurisdiction.
  27. North American Catholic Education Programming Foundation, Inc. v. Cardinale, 567 F.3d 8 (1st Cir. May 19, 2009) (Rhode Island) (non-product liability).  Motion to dismiss affirmed.  Appointment of an agent of process alone does not suffice to allow for the exercise of general jurisdiction.
  28. Ayers v. Tanami Trading Corp., 2009 WL 1362402 (D. Utah May 14, 2009) (Utah) (non-product liability).  Motion to dismiss denied on other grounds.  Designation of an agent for service of process is insufficient to permit general jurisdiction.
  29. Continental First Federal, Inc. v. Watson Quality Ford, Inc., 2009 WL 2032401 (M.D. Tenn. July 9, 2009) (Mississippi).  Transfer denied.  Registering to do business and appointing an in-state agent for service of process do not establish general personal jurisdiction, so the matter cannot be transferred.
  30. Viko v. World Vision, Inc., 2009 WL 2230919 (D. Vt. July 24, 2009) (Vermont) (non-product liability).  Transfer granted.  A defendant foreign corporation’s registered agent does not, by itself, confer general personal jurisdiction over the defendant.
  31. Advanced Datacomm Testing Corp. v. PDIO, Inc., 2009 WL 2477559 (D. Md. Aug. 11, 2009) (Maryland) (non-product liability).  Transfer granted.  Registration to do business and appointment of an agent for service of process do not create general personal jurisdiction.
  32. Cossaboon v. Maine Medical Center, 600 F.3d 25 (1st Cir. 2010) (New Hampshire) (non-product liability).  Dismissal for lack of personal jurisdiction affirmed.  Registration to do business alone is an insufficient basis on which to assert personal jurisdiction.
  33. Gallaher v. KBR, Inc., 2010 WL 2901626 (N.D.W. Va. July 21, 2010) (West Virginia) (non-product liability).  Motion to dismiss granted.  Registration to do business and having an agent for service of process are not sufficient to establish general personal jurisdiction.
  34. Harrington v. C.H. Nickerson & Co., 2010 WL 3385034 (D.R.I. Aug. 25, 2010) (Rhode Island (non-product liability). In light of constitutional limitations on personal jurisdiction, registration to do business and appointment of an agent for service of process do not constitute consent to general jurisdiction.
  35. King v. American Family Mutual Insurance Co., 632 F.3d 570 (9th Cir. Jan. 31, 2011) (Montana) (non-product liability).  Grant of motion to dismiss affirmed.  Appointment of an agent for service of process does not, standing alone, create general personal jurisdiction in the absence of causal connection to the state.
  36. Crochet v. Wal-Mart Stores, Inc., 2012 WL 489204 (W.D. La. Feb. 13, 2012) (Louisiana) (non-product liability).  Motion to dismiss granted.  Appointment of an agent for service of process and registration to do business within the state is insufficient to create general personal jurisdiction.
  37. Kuennen v. Stryker Corp., 2013 WL 5873277 (W.D. Va. Oct. 30, 2013) (District of Columbia) (prescription medical product liability). Summary judgment granted.  A business certificate and appointed agent are not independent support for general jurisdiction.
  38. Louisiana Limestone & Logistics, LLC v. Granite Group International, Inc., 2014 WL 1217956 (W.D. La. Feb. 28, 2014) (Louisiana) (non-product liability).  Motion to dismiss granted.  Presence of the registered agent and registered business office alone is insufficient to support the exercise of general jurisdiction.
  39. Robinson v. Knight Protective Service, Inc., 2014 WL 1326096 (S.D. Miss. March 31, 2014) (Mississippi) (non-product liability).  Motion to dismiss granted.  Registration to do business and appointment of agent for service of process is not consent to general personal jurisdiction.
  40. Brown v. CBS Corp., 19 F. Supp.3d 390 (D. Conn. May 14, 2014) (Connecticut) (product liability – non drug/device).  Asbestos motion to dismiss granted.  Corporate registration/agent for service of process insufficient consent to justify jurisdiction after Bauman. Affirmed 2/19/16 see below.
  41. Gliklad v. Bank Hapoalim B.M., 2014 WL 3899209 (N.Y. Sup. Aug. 4, 2014) (New York) (non-product liability).  Motion to dismiss granted.  Rejecting jurisdiction through consent by service on registered agent.
  42. Chambers v. Weinstein, 2014 WL 4276910, 997 N.Y.S.2d 668 (table) (N.Y. Sup. Aug. 22, 2014) (New York) (non-product liability). Motion to dismiss granted. Severance granted.  No jurisdiction on the basis of consent by registration of agent in-state.
  43. Recao v. Bell Helicopter Textron, Inc., 2014 WL 12595302 (S.D. Fla. Sept. 23, 2014) (Florida) (product liability – non drug/device).  Motion to dismiss granted.  Registration to do business and having a registered agent is insufficient to create general personal jurisdiction.
  44. Sullivan v. Sony Music Entertainment, 2014 WL 5473142 (N.D. Ill. Oct. 29, 2014) (Illinois) (non-product liability). Motion to dismiss granted.   Registration to do business and having agent for service of process is not consent to general jurisdiction.
  45. AstraZeneca AB v. Mylan Pharmaceuticals, Inc., 72 F. Supp.3d 549 (D. Del. Nov. 5, 2014), certified for interlocutory appeal on other issue, 2014 WL 7533913 (D. Del. Dec. 17, 2014) (Delaware) (non-product liability).  Motion to dismiss granted in part.  No general jurisdiction through consent by registration to do business.  Denying motion to dismiss on specific jurisdiction.
  46. Shrum v. Big Lots Stores, Inc., 2014 WL 6888446 (C.D. Ill. Dec. 8, 2014) (Illinois) (product liability – non drug/device). Motion to dismiss granted.  No general jurisdiction by consent for having registration and agent for service of process.
  47. Magdalena v. Lins, 999 N.Y.S.2d 44 (N.Y.A.D. Dec. 16, 2014) (New York) (non-product liability). Denial of motion to dismiss reversed.  General jurisdiction not provided by consent by registration to do business.
  48. Smith v. Union Carbide Corp., 2015 WL 191118 (Mo. Cir. St. Louis City Jan. 12, 2015) (Missouri) (product liability – non drug/device). Motion to dismiss granted.  Asbestos defendant’s registration to do business and agent for service of process insufficient to create general jurisdiction by consent.
  49. Chatwal Hotels & Resorts LLC v. Dollywood Co., 90 F. Supp.3d 97 (S.D.N.Y. Feb. 6, 2015) (New York) (non-product liability). Motion to dismiss granted in part and denied in part.  Rejecting consent by registering to do business.
  50. Fiduciary Network, LLC v. Buehler, 2015 WL 2165953 (N.D. Tex. May 8, 2015) (Texas) (non-product liability). Motion to remand denied.  Rejecting general jurisdiction by consent through “registration of an agent for process and registration to do business.”
  51. Keeley v. Pfizer Inc., 2015 WL 3999488 (E.D. Mo. July 1, 2015) (Missouri) (prescription medical product liability). Motion to dismiss granted.  No consent to general jurisdiction by registration to do business.
  52. Public Impact, LLC v. Boston Consulting Group, Inc., 117 F. Supp.3d 732 (M.D.N.C. Aug. 3, 2015) (North Carolina) (non-product liability). Motion to dismiss granted.  Rejecting jurisdiction by consent by registration to do business.
  53. McCourt v. A.O. Smith Water Products Co., 2015 WL 4997403 (D.N.J. Aug. 20, 2015) (New Jersey) (product liability – non drug/device). Motion to dismiss granted in asbestos case.  No consent to jurisdiction by registering to do business.
  54. Imax Corp. v. The Essel Group, 2015 WL 6087606 (N.Y. Sup. Oct. 9, 2015) (New York) (non-product liability). Motion to dismiss granted.  Rejecting jurisdiction by consent through registration to do business.
  55. Dimitrov v. Nissan North America, Inc., 2015 WL 9304490 (N.D. Ill. Dec. 22, 2015) (Illinois) (non-product liability). Motion to dismiss granted.  Defendant did not consent to jurisdiction by registering to do business.
  56. Brown v. Lockheed-Martin Corp., 814 F.3d 619 (2d Cir. Feb. 18, 2016) (Connecticut) (product liability – non drug/device).  “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 Daimler’s ruling would be robbed of meaning by a back‐door thief.”   Affirming 19 F. Supp.3d 390, above.
  57. Hood v. Ascent Medical Corp., 2016 WL 1366920 (Mag. S.D.N.Y. March 3, 2016) (New York) (non-product liability).  Recommending vacation of default judgment. Jurisdiction by consent argument based on contractual choice of law provision “borderline frivolous.”  Adopted 2016 WL 3453656, below.
  58. Firefighters’ Retirement System v. Royal Bank PLC, 2016 WL 1254366 (M.D. La. March 29, 2016) (Louisiana) (non-product liability).  Motion to dismiss granted. Registration to do business, appointment of agent for service of process, and payment of taxes insufficient.  Registration was not consent to general jurisdiction.
  59. Thompson v. Carnival Corp., 174 F. Supp.3d 1327 (S.D. Fla. March 30, 2016) (maritime law) (product liability – non drug/device).  Motion to dismiss granted. Contractual consent to jurisdiction insufficient absent independent basis for jurisdiction. Rule 4(k)(2) cannot confer general jurisdiction where defendant is not “at home.”
  60. In re Foreign Exchange Benchmark Rates Antitrust Litigation, 2016 WL 1268267 (S.D.N.Y. March 31, 2016) (New York) (non-product liability).  Granting motion to dismiss.  Registration was not consent to general jurisdiction. General jurisdiction criteria the same under both federal and state law.
  61. Hovsepian v. Crane Co., 2016 WL 2997641 (E.D. Mo. April 13, 2016) (Missouri) (product liability – non drug/device).  Granting motion to dismiss.  Out-of-state asbestos plaintiff failed to establish general personal jurisdiction or consent to general jurisdiction.
  62. Genuine Parts Co. v. Cepec, 137 A.3d 123 (Del. April 18, 2016) (Delaware) (product liability – non drug/device). Denial of motion to dismiss reversed.  Registration to do business and appointment of agent for service of process do not establish consent to general jurisdiction.  Prior contrary precedent is no longer viable after Bauman.
  63. Display Works, LLC, v. Bartley, 182 F. Supp.3d 166 (D. N.J. April 25, 2016) (New Jersey) (non-product liability). Motion to dismiss granted.  Registration to do business is not consent to general jurisdiction, nor is doing business in a state.  Prior contrary precedent is no longer viable after Bauman.
  64. Beard v. Smithkline Beecham Corp., 2016 WL 1746113 (E.D. Mo. May 3, 2016) (Missouri) (prescription medical product liability). Motion to transfer granted.  Registration to do business and appointment of agent do not establish consent to general jurisdiction.  Prior contrary precedent is no longer viable after Bauman.
  65. In Re: Zofran (Ondansetron) Products Liability Litigation, 2016 WL 2349105 (D. Mass. May 4, 2016) (Massachusetts) (prescription medical product liability). Motion to dismiss granted.  Motion to remand denied.  Registration to do business and appointment of agent for service do not establish consent to general jurisdiction.  Prior contrary precedent is no longer viable after Bauman, and would “distort” the registration statute.
  66. Leibovitch v. Islamic Republic of Iran, 188 F. Supp.3d 734 (N.D. Ill. May 19, 2016) (Illinois) (non-product liability). Motions to quash granted. Bauman is not limited to defendants and applies to third-party subpoenas.  Registration to do business and appointment of agent for service do not establish general jurisdiction by consent or waiver.  Prior contrary precedent is no longer viable after Bauman.
  67. Guillette v. PD-RX Pharmaceuticals. Inc., 2016 WL 3094073 (W.D. Okla. June 1, 2016) (Oklahoma) (prescription medical product liability). Motion to dismiss granted.  Registration to do business and appointment of agent for service of process do not establish consent to general jurisdiction.
  68. Manning v. PD-RX Pharmaceuticals Inc., 2016 WL 3094075 (W.D. Okla. June 1, 2016) (Oklahoma) (prescription medical product liability). Motion to dismiss granted.  Registration to do business and appointment of agent for service is not consent to general jurisdiction.
  69. Nauman v. PD-RX Pharmaceuticals Inc., 2016 WL 3094081 (W.D. Okla. June 1, 2016) (Oklahoma) (prescription medical product liability). Motion to dismiss granted.  Registration to do business and appointment of agent for service is not consent to general jurisdiction.
  70. Magna Powertrain De Mexico S.A. De C.V. v. Momentive Performance Materials USA LLC, 2016 WL 3574652 (E.D. Mich. June 16, 2016) (Michigan) (product liability – non drug/device). Motion to transfer granted.  Registration to do business and appointment of agent for service is not consent to general jurisdiction.
  71. Hood v. Ascent Medical Corp., 2016 WL 3453656 (S.D.N.Y. June 20, 2016) (New York) (non-product liability). Adopting magistrate’s recommendation (2016 WL 1366920, above) to grant motion to dismiss.  Forum selection clause not consent to general jurisdiction. Affirmed ___ F. Appx. ___, 2017 WL 2274276, below.
  72. Johnson v. Barrier, 2016 WL 3520157 (N.D. Ill. June 28, 2016) (Illinois) (non-product liability). Motion to dismiss granted.  Consent to jurisdiction in previous cases not judicial estoppel.
  73. Singh v. Diesel Transportation, LLC, 2016 WL 3647992 (D. N.J. July 7, 2016) (New Jersey) (non-product liability). Motion to transfer granted.  No consent to jurisdiction through registration and appointment of agent for service.
  74. Bristol-Myers Squibb Co. v. Superior Court, 377 P.3d 874 (August 29, 2016) (California) (prescription medical product liability). Denial of dismissal affirmed on other grounds.  Registration to do business and appointment of an agent for service of process does not create general personal jurisdiction. Reversed 137 S. Ct. 1773, on other (very important) grounds as discussed here.
  75. Bonkowski v. HP Hood, LLC, 2016 WL 4536868 (E.D.N.Y. Aug. 30, 2016) (New York) (product liability – non-drug/device). Motion to transfer granted.  No consent to general jurisdiction by registration to do business.  Prior contrary consent precedent no longer viable after Bauman.
  76. Erwin v. Ford Motor Co., 2016 WL 7655398 (M.D. Fla. Aug. 31, 2016) (Florida) (product liability – non-drug/device). Motion to dismiss deferred to consider transfer.  No consent to general jurisdiction by appointment of agent for service of process.
  77. Magill v. Ford Motor Co., 379 P.3d 1033, 2016 WL 4820223 (Colo. Sept. 12, 2016) (Colorado) (product liability – non drug/device). Reversing denial of motion to dismiss.  Registration to do business and appointment of agent for service is not consent to general jurisdiction.
  78. Sciortino v. CMG Capital Management Group, Inc., 2016 WL 4799099 (E.D. La. Sept. 14, 2016) (Louisiana) (non-product liability). Motion to dismiss granted.  Registration to sell securities in state not consent to general jurisdiction.
  79. Gulf Coast Bank & Trust Co, v. Designed Conveyor Systems, LLC, 2016 WL 4939113 (M.D. La. Sept. 14, 2016) (Louisiana) (non-product liability). Motion to dismiss granted.  No consent to jurisdiction through licensing, registration, or appointment of agent for service of process.
  80. George v. A.W. Chesterton Co., 2016 WL 4945331 (W.D. Pa. Sept. 16, 2016) (Pennsylvania) (product liability – non-drug/device). Remanding for lack of jurisdiction.  Registration to do business is not retroactive consent to general jurisdiction in asbestos case where it occurred after the alleged injury.
  81. U.S. Bank National Ass’n v. Bank of America, N.A., 2016 WL 5118298 (S.D.N.Y. Sept. 20, 2016) (Indiana) (non-product liability). Retransfer denied.  Registration and appointment of in-state agent is neither consent to nor waiver of general jurisdiction.
  82. Addelson v. Sanofi S.A., 2016 WL 6216124 (E.D. Mo. Oct. 25, 2016) (Missouri) (prescription medical product liability).  Motion to dismiss granted.  Registration to do business and appointment of agent is not consent to general jurisdiction.  Prior contrary precedent is no longer viable after Bauman.
  83. Perez v. Air and Liquid Systems Corp., 2016 WL 7049153 (S.D. Ill. Dec. 2, 2016) (Illinois) (product liability – non-drug/device). Motion to dismiss granted.  Asbestos case.  No consent to jurisdiction by registration and appointment of agent.
  84. Taormina v. Thrifty Car Rental, 2016 WL 7392214 (S.D.N.Y. Dec. 21, 2016) (New York) (non-product liability). Motion to dismiss granted.  No consent to jurisdiction through registration and appointment of agent for service.  Prior contrary precedent no longer viable after Bauman.
  85. Minholz v. Lockheed Martin Corp., 2016 WL 7496129 (N.D.N.Y. Dec. 30, 2016) (New York) (product liability – non-drug/device). Motion to dismiss granted.  No consent to jurisdiction through registration and appointment of agent for service.  Prior contrary precedent no longer viable after Bauman.
  86. Gulf Coast Bank v. Designed Conveyor Systems, LLC, 2017 WL 120645 (M.D. La. Jan. 12, 2017) (Louisiana) (non-product liability). Denying motion to alter judgment.  No consent to jurisdiction through registration and appointment of agent for service.  Prior contrary precedent no longer viable after Bauman, and interpreting a registration statute as providing consent to general jurisdiction would “rob [Bauman] of its central meaning.”
  87. Famular v. Whirlpool Corp., 2017 WL 280821 (S.D.N.Y. Jan. 19, 2017) (New York) (non-product liability). Motion to dismiss representative plaintiffs for out-of-state class actions granted.  No consent to jurisdiction through registration and appointment of agent for service.  Prior contrary precedent no longer viable after Bauman.
  88. Sullivan v. Barclays PLC, 2017 WL 685570 (S.D.N.Y. Feb. 21, 2017) (New York) (non-product liability). Motion to dismiss granted.  Forum selection clause is not consent to general jurisdiction.  Neither is registration to do business.
  89. State ex rel. Norfolk Southern Railway Co. v. Dolan, 512 S.W.3d 41 (Mo. Feb. 28, 2017) (Missouri) (non-product liability). Writ of prohibition issued.  No consent to jurisdiction through registration and appointment of agent.  Contrary prior precedent no longer viable after Bauman.
  90. Figueroa v. BNSF Railway Co., 390 P.3d 1019 (Or. March 2, 2017) (Oregon) (non-product liability). Mandamus granted.  No consent to general jurisdiction through registration and appointment of agent for service of process.  Registration is not implied consent to personal jurisdiction.
  91. Am Trust v. UBS AG, ___ F. Appx. ___, 2017 WL 836080 (9th Cir. March 3, 2017) (California) (non-product liability). Affirming dismissal for lack of jurisdiction.  No consent to jurisdiction through registration and appointment of agent.  Acceptance of service in prior litigation insufficient.
  92. Phoenix Insurance Co. v. Cincinnati Indemnity Co., 2017 U.S. Dist. Lexis 109977 (D.R.I. March 3, 2017) (Rhode Island) (non-product liability).  Motion to transfer granted. No consent to general jurisdiction through insurance registration and appointment of the agent for service.  The statues cannot be “construed as a consent or submission to personal jurisdiction,” and if they could they would violate Due Process.
  93. Kearns v. New York Community Bank, 2017 WL 1148418 (Kan. App. March 24, 2017) (Kansas) (non-product liability) (unpublished). Affirming dismissal for lack of jurisdiction.  Consent to jurisdiction by registration to do business in-state by non-party subsidiary insufficient.
  94. Muenstermann v. United States, 2017 WL 1408037 (S.D. Ill. April 20, 2017) (Illinois) (non-product liability).  Motion to dismiss granted.  No jurisdiction through registration and appointment of agent for service.  Contrary prior precedent no longer viable after Bauman.
  95. MacCormack v. The Adel Wiggins Group, 2017 WL 1426009 (E.D. Mo. April 21, 2017) (Missouri) (product liability – non-drug/device).  Granting motion for reconsideration, and dismissing.  No consent to jurisdiction for registration and an appointment of agent for service.  Contrary prior precedent no longer viable under Norfolk Southern v. Dolan.
  96. Justiniano v. First Student Management LLC, 2017 WL 1592564 (E.D.N.Y. April 26, 2017) (New York) (non-product liability).  Motion to transfer granted.  No consent to jurisdiction through registration and appointment of agent for service.  Contrary prior precedent no longer viable after Bauman.
  97. Wal-Mart Stores, Inc. v. Lemaire, ___ P.3d ___, 2017 WL 1954809 (Ariz. App. May 11, 2017) (Arizona) (non-product liability).  Reversing denial of motion to dismiss.  No express or implied consent to jurisdiction through registration and appointment of agent for service.
  98. Antoon v. Securus Technologies, Inc., 2017 WL 2124466 (W.D. Ark. May 15, 2017) (Arkansas) (non-product liability).  Motion to dismiss granted. No consent to jurisdiction through registration and appointment of agent for service, where statute provided express jurisdictional restriction, and “exception [would be] so large as to swallow the rule.”
  99. Matthews v. BNSF Railway Co., 2017 WL 2266891 (W.D. Mo. May 23, 2017) (Missouri) (non-product liability).  Motion for reconsideration granted and transferred.  No consent to jurisdiction for registration and appointment of agent for service.
  100. Hood v. Ascent Medical Corp., ___ F. Appx. ___, 2017 WL 2274276 (2d Cir. May 24, 2017) (New York) (non-product liability). Affirming grant of motion to dismiss.  Forum selection clause insufficient to constitute consent to general jurisdiction. Affirming, 2016 WL 1366920, and 2016 WL 3453656, above.
  101. Famular v. Whirlpool Corp., 2017 WL 2470844 (S.D.N.Y. June 7, 2017) (New York) (non-product liability).  Motion to dismiss granted as to out-of-state plaintiffs.  No consent to jurisdiction through registration and appointment of agent for service. Contrary prior precedent longer viable after Bauman.
  102. Siegfried v. Boehringer Ingelheim Pharmaceuticals, Inc., 2017 WL 2778107 (E.D. Mo. June 27, 2017) (Missouri) (prescription medical product liability).  Motion to dismiss granted.  Out-of-state plaintiffs lacked personal jurisdiction Bauman and BMS.  No consent to jurisdiction through and appointment of agent for service.
  103. Everett v. Aurora Pump Co., 2017 WL 2778091 (E.D. Mo. June 27, 2017) (Missouri) (product liability – non-drug/device).  Motion to dismiss granted.  No consent to jurisdiction through registration and appointment of agent for service.
  104. Boswell v. Cable Services Co., 2017 WL 2815077 (D.N.J. June 28, 2017) (New Jersey) (non-product liability).  Motion to dismiss granted.  No consent to jurisdiction through registration and appointment of agent for service.  Statute lacked “express language” indicating consent.  Contrary prior precedent no longer viable after Bauman.
  105. Segregated Account of Ambac Assurance Corp. v. Countrywide Home Loans, ___ N.W.2d ___, 2017 WL 2824607 (Wis. June 30, 2017) (Wisconsin) (non-product liability).  Reversing denial of dismissal and remanding.  No consent to jurisdiction through registration and appointment of the agent.  Statute contains no language regarding consent or jurisdiction.  Contrary prior precedent no longer viable after Bauman.
  106. Dutch Run-Mays Draft, LLC v. Wolf Block, LLP, ___ A.3d ___, 2017 WL 2854420 (N.J. Super. App. Div. July 5, 2017) (New Jersey) (non-product liability).  Dismissal for lack of jurisdiction affirmed.  Registration to do business and appointment of agent for service of process do not establish consent to general jurisdiction.  Prior contrary precedent is no longer viable after Bauman.
  107. JPB Installers, LLC v. Dancker, Sellew & Douglas, Inc., 2017 WL 2881142 (M.D.N.C. July 6, 2017) (North Carolina) (non-product liability).  Motion to dismiss granted.  Registration to do business does not establish general personal jurisdiction.

We commented last week that we were not surprised by the numerous post-BMS personal jurisdiction decisions we were seeing. Lots of courts and parties around the country were watching and waiting for this one. So, let’s add some more. This time from another of plaintiffs’ favorite “magnet jurisdictions” – Missouri. Historically, product liability plaintiffs bringing pharmaceutical and medical device cases have flocked to Missouri (the City of St. Louis in particular) among other notoriously plaintiff-friendly venues as litigation tourists. They would file multi-plaintiff complaints against drug and device companies not located in Missouri, including at least 1 Missouri plaintiff – to tie the case to the state — and at least 1 plaintiff from defendant’s home state – to destroy diversity.

So, when defendants would remove these multi-plaintiff complaints, which we always do, we would have to argue misjoinder and simultaneously move to dismiss all of the out of state plaintiffs for lack of personal jurisdiction. Previously, pre-BMS, the Eastern District of Missouri was rather hostile to such removals. Swiftly remanding case after case for lack of subject matter jurisdiction, opting to completely skip the personal jurisdiction issue altogether. Apparently, BMS is changing that – which frankly, we expected. But now we have some decisions.

The complaints in Siegfried v. Boehringer Ingelheim Pharm., Inc., 2017 WL 2778107 (E.D. Mo. Jun. 27, 2017) and Jordan v. Bayer Corp., 2017 U.S. Dist. LEXIS 109206 (E.D. Mo. Jul. 14, 2017) look pretty much as described above. Each case had 94 plaintiffs, of which only a handful were residents of Missouri (8 in Siegfried and 7 in Jordan). The remaining plaintiffs were from different states all over the country, including the states where defendants are citizens. Siegfried at *1; Jordan at *1-2. At least 1 to get personal jurisdiction and at least 1 to defeat diversity.

As do most courts when faced with competing issues of subject matter and personal jurisdiction, these courts cited Ruhrgas AG v. Marathon Oil Co., 526 U.S. 574 (1999) for the proposition that the court has discretion to determine which to consider first. Siegfried at *2; Jordan at *5. While federalism usually tips the scales toward deciding subject matter jurisdiction first, where personal jurisdiction “turns on federal constitutional issues” and/or “judicial economy” concerns, personal jurisdiction can be prioritized. Jordan at *5. Put even more simply, post-BMS, “[p]ersonal jurisdiction is now the more straightforward inquiry.” Siegfried, at *3. That’s because BMS is “dispositive of the specific personal jurisdiction issue” regarding out-of-state plaintiffs suing an out-of-state defendant. Jordan at *9. Specific personal jurisdiction is lacking.   Therefore, reasoned the Siegfried court

Remanding this case for lack of complete diversity, only to have the case removed again later once the non-Missouri plaintiffs are dismissed, would be a waste of judicial resources.

Siegfried at *2. After BMS, neither the Eastern District of Missouri nor the original Missouri state court can exercise personal jurisdiction over the non-residents, so why remand the case to reach the same conclusion. Siegfried at *5. It would be an unnecessary extra step.

Applying a “straightforward” BMS analysis, both courts dismissed all of the out of state plaintiffs with no connection to Missouri. Siegfried at *5 (“nonresident plaintiffs did not ingest the drug in the forum, nor do they claim to have suffered resulting injuries in the forum. The personal injuries of the non-Missouri plaintiffs have no connection with Missouri. They did not arise out of, or relate to, defendants’ activities in Missouri.”); Jordan at *10-11 (“the non-Missouri plaintiffs do not allege that they acquired the [] device from a Missouri source or that they were injured or treated in Missouri . . . . And the general exercise of business activities in the state cannot create an adequate link between the claims and the Missouri forum.”). Because the dismissal of the non-Missouri plaintiffs negated any challenge to complete diversity, the motions to remand in both cases were denied. Siegfried at *5; Jordan at *11. Yet another post-BMS victory.

 

The Supreme Court’s opinion on personal jurisdiction in BMS v. Superior Court has already made a substantial impact, despite being on the books for a mere three weeks.  That’s probably because it’s the Supreme Court and also because personal jurisdiction is an issue in every lawsuit filed, whether in state or federal court.  Another reason could be that the California Supreme Court’s opinion reaching for personal jurisdiction in BMS was so clearly swimming against the Supreme Court’s recent current that its reversal was widely anticipated and thus gained notoriety even faster than usual.  That last part is speculation, but still, we have not heard so much about personal jurisdiction since poor Mr. Burnham traveled from New Jersey to California to visit his kids. See Burnham v. Superior Court, 495 U.S. 604 (1990).

So what will we see following BMS?  We saw last week that some plaintiffs will try to stretch even the most tenuous forum contacts into specific jurisdiction, and some courts may go along with that.  We expect that most will not.  Take for example a recent opinion from the New Jersey Appellate Division, Dutch Run-Mays Draft, LCC v. Wolf Block, LLP, __ A.3d __, 2017 WL 2854420 (N.J. App. Div. July 5, 2017).  In Dutch Run, a Florida real estate developer sued a dissolved Pennsylvania law firm in New Jersey state court, and it argued that the law firm’s compliance with New Jersey’s business registration statute created personal jurisdiction “by consent.”  The New Jersey courts rejected that position.  Sure, the plaintiff was able to identify New Jersey contacts—business registration, a New Jersey registered agent, two New Jersey offices, the residency of some partners on the law firm’s dissolution committee, and three lawsuits that the law firm filed in New Jersey’s courts.

The problem for the plaintiff was that its claims had nothing to do with these New Jersey contacts. As the court put it, “[T]he negligence forming plaintiff’s cause of action did not arise from defendant’s contacts with New Jersey.  Plaintiff cannot show any relationship between the underlying matter and the business or attorneys in New Jersey.” Id. at *5.  Thus, no specific personal jurisdiction.  This is a faithful application of BMS, which requires a causal link between the defendant’s forum contacts and the plaintiff’s alleged injury.

Equally as important, the court held that the law firm’s registration in New Jersey did not imply “consent” to general personal jurisdiction under Daimler AG v. Bauman:

Plaintiff suggests Daimler’s holding is narrowed by its facts, specifically that Daimler was not registered as a foreign entity and had no registered agent or offices in California.

This limited view ignores Daimler’s definitive due process analysis. . . .  We now join the many courts that have circumscribed the view of general jurisdiction post-Daimler. . . .  In light of Daimler, we reject the application of [Allied-Signal, Inc. v. Purex Indus., Inc. 242 N.J. Super. 362 (App. Div. 1990)] as allowing general jurisdiction solely based on the fiction of implied consent by a foreign corporation’s compliance with New Jersey’s business registration statute. . . .  Importantly, the exercise of general jurisdiction requires satisfaction of the “continuous and systematic contacts” to comply with due process. Mere registration to conduct some business is insufficient.

Dutch Run, at *7 (emphasis added, citations omitted).  The court also rejected the plaintiff’s request for “jurisdictional discovery” because “[w]e remain unconvinced that permitting further discovery would have altered our conclusion.” Id. at *8.

Speaking of discovery, we also commend to you the order rejecting “jurisdictional discovery” in In re Baltimore City Asbestos Litigation (Smith v. Automotive Prods. Co.), Memorandum Opinion & Order, No. 24X13000333 (Baltimore City Circuit Ct. June 7, 2017).  In Smith, a Pennsylvania plaintiff sued multiple Pennsylvania defendants in Pennsylvania.  But after some defendants won summary judgment, the plaintiff tried to re-file his lawsuit in Maryland, which has a longer statute of limitations.  Slip op. at 2.

The Maryland court initially reserved ruling on personal jurisdiction and allowed limited “jurisdictional discovery.” This made neither side happy, resulting in dueling motions for reconsideration:  The defendants asked again for dismissal, and the plaintiffs wanted broader discovery.

The defendants won. Citing BMS, the court ruled that it lacked specific personal jurisdiction over the defendants because

this suit is unrelated to any alleged contact the Defendants may have had with the State of Maryland. Further the Defendants in this suit have conducted virtually no business in the State of Maryland and, therefore, have not purposefully availed themselves of the privilege of conducting activities in the State.  Therefore, this Court lacks specific jurisdiction over the Defendants in this suit.

Slip op. at 5. The court similarly lacked general personal jurisdiction over the defendants because they were not “at home” in Maryland, where “the only relevant inquiry is whether the defendant is either incorporated or has its principle place of business in the forum state.”  Slip op. at 6 (citing Daimler AG v. Bauman).  Like the New Jersey court in Dutch Run, the Maryland court rejected “jurisdictional discovery” because “[i]t is clear that further discovery will not uncover facts demonstrating the existence of general jurisdiction over any of the moving Defendants.  All of the Defendants are incorporated outside of Maryland.  The Defendants’ principal places of business are all in Europe.”  Slip op. at 6.

We bring you these two cases not only because they are timely, but because they confront tactics that we expect to see post-BMS—assertions of jurisdiction “by consent” and requests for “jurisdictional discovery.”  Our view on jurisdiction by consent is clear:  We don’t think it holds up; and as the New Jersey court found, a majority of courts have ruled that business registration alone does not form consent to jurisdiction.

As for discovery, these courts were correct to reject discovery where the facts already showed that jurisdiction was lacking. To this, we can add only that courts contemplating “jurisdictional discovery” should be reticent, very reticent.  As is commonly true with phased discovery, defining the phases can be challenging, leading to substantial overlap between discovery on jurisdictional facts versus discovery on all other facts.  It is a slippery slope toward full-blown discovery, in a case where the plaintiff has not yet established the court’s jurisdiction.  Look at what the plaintiff did in Smith v. Automotive Products, discussed above—the court gave them jurisdictional discovery, and their response was to ask for more.  We are not surprised.  Of course, this all assumes that a court has the power to allow discovery against a defendant contesting jurisdiction in the first place.  We don’t know the answer to that question, but the yet-to-be established nature of the court’s prerogative is another reason to tread lightly.

Maybe we should not be surprised when courts within California reach to find personal jurisdiction over out-of-state corporations even when non-Californians sue. That is what BMS v. Superior Court was all about.  Right?  Well, it happened again last week in Dubose v. Bristol-Myers Squibb Co., No. 17-cv-00244, 2017 WL 2775034 (N.D. Cal. June 27, 2017), and it has us scratching our heads.

This is not an obscure issue. We know from Bauman that a company is subject to general personal jurisdiction only where it is “at home,” which means state of incorporation or principal place of business.  (You can view our post-Bauman personal jurisdiction cheat sheet here.)  And the Supreme Court famously held just two week ago in BMS that California’s courts cannot exercise specific personal jurisdiction over an out-of-state defendant unless there is “an affiliation between the forum and the underlying controversy, principally, [an] activity or an occurrence that takes place in the forum State.” Bristol-Myers Squibb v. Superior Court, 137 S. Ct. 1773, 1781 (2017).  That means there must be a causal link between the defendant’s forum contacts and the alleged injury to the plaintiff.  Contacts with other people—even people taking the same drug—do not count.

That is what makes the order in Dubose so confounding.  In Dubose, a South Carolina plaintiff sued a New York pharmaceutical manufacturer in the Northern District of California alleging product liability claims arising from her use of a prescription drug in South Carolina.  This is Bauman and BMS all over again, right?  Well, the district court saw it differently because the plaintiff alleged that the defendant conducted clinical trials within California, which became “part of an unbroken chain of events leading to Plaintiff’s alleged injury.” Dubose, at *3.  The district court therefore found specific personal jurisdiction based on those clinical trials, and it distinguished BMS v. Superior Court on the basis that there were no California contacts alleged in that case sufficient to support jurisdiction.

Having found jurisdiction, the district court then promptly transferred the case to South Carolina, where it should have been filed in the first place. But even though the case ultimately came to the correct result—sending a litigation tourist packing—we question the court’s order finding jurisdiction for several reasons.  First, we cannot distinguish BMS as easily as the district court did.  The alleged California contacts in Dubose were clinical trials.  But what are clinical trials?  They are physicians prescribing drugs to patients.  Sure, the prescriptions are written under approved protocols and data is collected.  But a patient being treated in a clinical trial does not look all that different from a patient being treated outside a clinical trial.  The Supreme Court held in BMS that “the mere fact that other plaintiffs were prescribed, obtained, and ingested [the drug] in California . . . does not allow the State to assert specific jurisdiction.”  137 S. Ct. at 1871.  The clinical trial participants referenced in Dubose were similarly “prescribed, obtained, and ingested” the drug within California.

Second, the district court in Dubose came to its conclusion because the clinical trials purportedly were in the “but for” causation chain leading to the alleged injury.  But were they?  Pharmaceutical companies typically run clinical trials at centers throughout the world.  Were the data from the California clinical trials really a “but for” cause of a patient ingesting a drug in South Carolina at some later point in time?  Put another way, if the California clinical trials never occurred, would the product really not have come to market?  We don’t know, but our point is that the causal chain leading from a specific, geographically defined subset of clinical trials to an alleged injury seems tenuous at best.

Third, the district court’s order seems to hold that any forum contact is sufficient to support specific personal jurisdiction, so long as it can be related to the plaintiff in any way.  But recall that specific personal jurisdiction is grounded in due process, which asks whether it is fundamentally fair to hold a defendant to answer in a forum where it is not at home.  At some point, the affiliation between the forum contact and the claim can be so attenuated that it can no longer be said that one “arose from” the other.  That is what we think is going on in Dubose.

If specific personal jurisdiction exists in every state where a multi-center clinical trial occurred, then any plaintiff who used the drug conceivably could sue the manufacturer in any of those states—no matter where the manufacturer is based and no matter where the plaintiff resides or used the drug. In the one example the district court cited, that would translate to specific personal jurisdiction in 44 states. Dubose, at *3 (citing M.M. ex rel. Meyers v. GlaxoSmithKline LLC, 61 N.E.3d 1026 (Ill. Ct. App. 2016)).  That is not “specific” personal jurisdiction.  That more resembles the concept of universal jurisdiction that the Supreme Court condemned in Bauman.

It could not be more unlike the disciplined contours of specific jurisdiction set forth in BMS.  The proliferation of jurisdiction to a multiplicity of states allowed the litigation tourism problem to arise in the first place.  It is also what led the Supreme Court to reel in personal jurisdiction.  Moreover, while the district court observed that “it is not clear what the alternative would be,” we would say the alternative is that Plaintiffs can sue a defendant where the defendant is at home or in states where they reside or where they ingested the product and experienced alleged injuries.  The Supreme Court made this clear in BMS too, where it rejected the plaintiffs’ “parade of horribles” and held that its “straightforward application of settled principles of personal jurisdiction” left plaintiffs ample alternatives, whether suing alone or in combination with others.

The case is in South Carolina now, so we doubt this order will undergo appellate review. That’s unfortunate.  Another thing is that the district court in Dubose relied most heavily on the M.M. ex rel. Meyers order to support its finding of jurisdiction.  But M.M. is currently in the U.S. Supreme Court on a petition for certiorari.  In light of BMS, we would not be surprised if the Supreme Court granted cert., vacated the order, and remanded for further proceedings.  That would leave Dubose as even more of an outlier.

 

The Supreme Court decided “the big one” today – and not to keep anyone in suspense [the big one is a major earthquake in California mass tort litigation], the result is that the California Supreme Court finding of personal jurisdiction despite neither the plaintiff nor the defendant residing in the state has been reversed. Here is a link to the slip opinion in Bristol-Myers Squibb Co. v. Superior Court, No. 16-466 (U.S. June 19, 2017) (“BMS”).  It’s an 8-1 opinion, not a close decision, with Justice Alito writing for the Court.  Only Justice Sotomayor (predictably, from her prior positions) dissented.

After BMS, a lot of the litigation industry in California will go sliding into the sea.

This is one of the most important mass tort/product liability decisions ever, because expansive notions of personal jurisdiction – that large companies can be sued by anyone anywhere – are behind the growth of “magnet jurisdictions” (ATRA calls them something else) that attract litigation tourist plaintiffs from all over the country, suing companies from all over the country, without regard for whether any such defendant is incorporated or does business in the state.  Get rid of any personal jurisdiction basis for doing so, and we, if not end, at least put major limits on plaintiffs’ ability to forum-shop in this manner.

In our sandbox, product liability plaintiffs, suing manufacturers of FDA-regulated products, have flocked to what they view as their most favorable venues, certain notorious counties in Missouri, Illinois, Pennsylvania, New Jersey, New York – and yes, California. That’s what BMS rejected.  For several decades, plaintiffs’ litigation tourist strategy relied on expansive interpretation of “general” personal jurisdiction – that any defendant that conducted “continuous and substantial” business in any state could be sued in that state by anyone.  This theory was damaged by Goodyear Dunlop Tires Operations, S.A. v. Brown, 564 U.S. 915 (2011) (which we call “Brown”), and then demolished altogether in Daimler AG v. Bauman, 134 S.Ct. 746 (2014) (which we call “Bauman”).

After Bauman, mere “continuous and substantial” business in a jurisdiction could not support general personal jurisdiction.  Rather only corporate defendants “at home” in the particular jurisdiction could be sued there. Bauman, 134 S. Ct. at 757; Brown, 564 U.S. at 919.  With no “exceptional” exceptions that apply to mass torts, Bauman limited general personal jurisdiction to those states where a corporation is incorporated or has its principal place of business. Bauman, 134 S. Ct. at 760-61.  “Exorbitant” and “grasping” jurisdictional allegations that would expand jurisdiction to “every other State” where large corporations do business, violate Due Process. Id. at 761-62.  “A corporation that operates in many places can scarcely be deemed at home in all of them.” Id. at 761 n.19.

Bauman thus threatened the viability of litigation tourism the litigation industry in numerous plaintiff-friendly venues, since 90%+ of the plaintiffs in such venues are typically non-residents.  Plaintiffs fought back.  The ink on Bauman was barely dry when they started trying to import the same expanded “continuous and substantial” rationale into the other major basis for personal jurisdiction, “specific” personal jurisdiction, which heretofore had been limited to suits “related to” the forum state – that is suits brought by in-state residents or persons injured in a state.  By a 4-3 margin, the California Supreme Court in Bristol-Myers Squibb Co. v. Superior Court, 377 P.3d 874 (Cal. 2016) (which we’ll call “BMS II”), conferred specific personal jurisdiction on litigation tourist plaintiffs from all over the country suing over a prescription drug.

No more.

As reiterated by the United States Supreme Court in BMS, the “primary consideration” of personal jurisdiction  is “the burden on the defendant.”  Slip op. at 6 (World-Wide Volkswagen Corp. v. Woodson, 444 U.S. 286, 292 (1980)).  While general jurisdiction is governed by Bauman’s “at home” requirements as to corporate defendants, “[s]pecific jurisdiction is very different.” Id. at 5.  “The suit” itself – not just some other aspect of litigation – “must arise out of or relate to the defendant’s contacts with the forum.” Id. (emphasis original) (citation and quotation marks omitted).

[S]pecific jurisdiction is confined to adjudication of issues deriving from, or connected with, the very controversy that establishes jurisdiction.

Id. at 6 (quoting Brown, 564 U. S. at 918).

The California Supreme Court’s BMS II ruling that any “substantial connection” between a corporate defendant’s activities and California, whether or not causally related to a litigation tourist plaintiff’s claimed injuries, would suffice to support jurisdiction failed miserably.  Personal jurisdiction reflects a concern with “submitting to the coercive power of a State that may have little legitimate interest in the claims in question.”  BMS, slip op. at 6.  That would be California in this case, where the litigation tourist plaintiffs did not reside in the state and did not sue over a drug that they purchased in the state.  When there is no “affiliation between the forum and the underlying controversy, . . . specific jurisdiction is lacking regardless of the extent of a defendant’s unconnected activities in the State.”  Id. at 7 (emphasis added).  We believed from day one that the California Supreme Court had improperly imported the general jurisdiction test rejected in Bauman into specific jurisdiction. In BMS the Supreme Court agreed:

[T]he California Supreme Court’s “sliding scale approach” is difficult to square with our precedents. Under the California approach, the strength of the requisite connection between the forum and the specific claims at issue is relaxed if the defendant has extensive forum contacts that are unrelated to those claims.  Our cases provide no support for this approach, which resembles a loose and spurious form of general jurisdiction.

Id.  “Loose and spurious” – that’s a good description of the basis for most litigation tourism in mass torts.

The State Supreme Court found that specific jurisdiction was present without identifying any adequate link between the State and the nonresidents’ claims. . . .  [T]he nonresidents were not prescribed [the drug] in California, did not purchase [it] in California, did not ingest [it] in California, and were not injured by [it] in California.  The mere fact that other plaintiffs were prescribed, obtained, and ingested [the drug] in California − and allegedly sustained the same injuries as did the nonresidents – does not allow the State to assert specific jurisdiction over the nonresidents’ claims.

Id. at 8 (citing Walden v. Fiore, 134 S. Ct. 1115, 1123 (2014)).  Nothing related solely to other plaintiffs matters in specific jurisdiction.  As we suspected it would be, Walden was the critical precedent here. BMS, slip op. at 8-9.  The cases plaintiffs relied upon, Keeton v. Hustler Magazine, Inc., 465 U. S. 770 (1984), and Phillips Petroleum Co. v. Shutts, 472 U. S. 797 (1985), were “amply” distinguishable and “had no bearing on the question presented here.”  BMS, slip op. at 10-11.

Nor did the presence of a California distributor – equally uninvolved with the plaintiffs who brought the suit – change the result one iota.  Repeated prior precedents have held that personal jurisdiction “must be met as to each defendant over whom a state court exercises jurisdiction.”  Id. at 11 (citations and quotation marks omitted).  “The bare fact that BMS contracted with a California distributor is not enough to establish personal jurisdiction in the State.”  Id. at 12.  This ruling, while something of a side show in BMS, should be critical in other types of cases, such as asbestos, where dozens of defendants are typically joined together without regard for where either the defendants or plaintiffs are located.

Thus, unfortunately for litigation tourists, “a defendant’s general connections with the forum are not enough.”  Id. at 7.  Plaintiffs’ unrestricted forum shopping days are over.  “[S]traightforward” application of fundamental personal jurisdiction principles means that plaintiffs may “join[] together in a consolidated action in the States that have general jurisdiction over BMS.”  Otherwise, “the plaintiffs who are residents of a particular State . . . could probably sue together in their home States.”  Id.  Finally, while the Court did not address “whether the Fifth Amendment imposes the same restrictions on the exercise of personal jurisdiction by a federal court, ” id. as we mentioned above, Walden v. Fiore was probably the single most important prior precedent in BMS.  As our post on Walden pointed out, Walden was a federal (Bivens) action filed in federal court.  We thus don’t see that caveat as being a meaningful one.

The result in BMS means that the era of big mass torts, filed by plaintiffs anywhere against anyone over anything, is (to paraphrase Bill Clinton) over.  There will be still be mass torts, but as BMS pointed out at the end of the opinion, they will either be defendant-specific − filed in the target defendant’s state of incorporation or principal place of business – or limited to plaintiffs from the state where the litigation is situate.  San Francisco (as in BMS), Los Angeles, Philadelphia, St. Louis, Chicago, Madison County, wherever….  These jurisdictions can only assert jurisdiction over in-state plaintiffs, or else defendants that are (unfortunate enough to be) “at home” in those respective states (subject, of course, to state venue requirements).

A very good day for the right side of the “v.” – and not very good for those on the wrong side.  Plaintiffs will have to get used to the radical proposition that defendants have constitutional rights, too.

The only remaining personal jurisdiction theory available to the great majority of litigation tourist plaintiffs is the so-called “jurisdiction by consent” theory that posits that mere registration to do business/appointment of an agent for service of process – something that all 50 states require – constitutes “consent” to be sued even by non-residents in any state where a corporate defendant so registers. Of course, a lot of states (including California since way before Bauman) do not interpret their personal jurisdiction statutes in that manner (see our discussions here and here).  Critically, as we’ve also pointed out before (including in our post-Bauman personal jurisdiction cheat sheet, which we will be now be converting to a consent cheat sheet), that consent theory would be just as expansive, and thus just as  violative of Due Process, as the general and specific jurisdiction theories rejected in Bauman and BMS, respectively.

Remember, the basis for all of the Court’s jurisdictional jurisprudence is Due Process. “[A] state court’s assertion of jurisdiction exposes defendants to the State’s coercive power,” so that assertion “is subject to review for compatibility with the Fourteenth Amendment’s Due Process Clause.”  BMS, slip op. at 5 (citation and quotation marks omitted).  Plaintiffs should not expect to achieve the same unconstitutional result by other means, such as expanding state corporate registration statutes beyond recognition.  Plaintiffs in BMS could not escape Bauman in that fashion.  Future plaintiffs should not expect to escape both Bauman and BMS with yet another subterfuge.  Under Due Process, there must be “a connection between the forum and the specific claims at issue.”  BMS, slip op. at 8.

Finally, we’d also like to point out one more implication of today’s BMS decision – it affects available venues for a large number of federal causes of action.  The general federal venue statute, 28 U.S.C. §1391, provides that, “[f]or all venue purposes,” a corporation “shall be deemed to reside, if a defendant, in any judicial district in which such defendant is subject to the court’s personal jurisdiction.”  Thus, by the terms of §1391, the scope of personal jurisdiction recognized in BMS (subject to the Court’s final caveat in BMS about federal personal jurisdiction) also becomes the template for the permissible venue choices available to federal plaintiffs bringing suit under any federal statute that does not contain its own statute-specific venue provisions.

This guest post comes courtesy of Jonathan Hoffman, a Senior Partner at MB Law Group LLP, in Portland, Oregon.  Jon, a long-time member of the Product Liability Advisory Council (“PLAC”), originally circulated a version of this post to PLAC members.  Bexis, also a long-time PLAC member, saw it, thought blog readers would be interested, and successfully importuned Jon to submit a longer version here.  Access to these kinds of alerts are one reason, among many, why we encourage drug and medical device manufactures confronted with product liability litigation to join PLAC.

As always our guest bloggers deserve 100% of the credit (and any blame) for their posts.  Onward to the Hague Convention.

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Although most drug and medical device litigation is purely among domestic individuals and defendants, many manufacturers of these products are based outside the United States or are domestic subsidiaries of overseas companies.  In recent years, the US Supreme Court has trimmed many excessive impositions of personal jurisdiction in suits brought against foreign and other non-local defendants, most recently, in BNSF Ry. Co. v. Tyrrell, No. 16-405, 2017 WL 2322834 (U.S. May 30, 2017).

[editor’s note − see our BNSF post here]

However, it may have become easier for plaintiffs to invite foreign manufacturers to the party here in the US based on the Court’s recent liberal interpretation of the Hague Service Convention, 20 U. S. T. 361, T. I. A. S. No. 6638 (1965), which governs service of process on foreign entities.  Until now, effecting service upon a defendant based in another country has been an inconvenience, if not an outright impediment.  Many US courts held that the only proper means of service under the Convention was to serve the complaint upon the “central authority” of that country, requesting that central authority to then serve the complaint upon the defendant in the manner under which service is customarily performed under that country’s laws.  The Convention also provided that the Convention “shall not interfere with—(a) the freedom to send judicial documents, by postal channels, directly to persons abroad.”  Many US courts concluded that this provision, Article 10(a) of the Convention did not authorize service of process by mail because it only referred to the right to “send” documents, not to “serve” them.

But the Supreme Court disagreed late last month.  Water Splash, Inc. v. Menon, No. 16-254, 2017 WL 2216933 (U.S. May 22, 2017), arose from a seemingly simple dispute between the manufacturer of playground equipment and a former employee.  The employee was allegedly working for one of Water Splash’s competitors while still employed by Water Splash.  Water Splash sued in Texas state court, but the former employee lived in Canada.  Water Splash served her by mail, in accordance with Texas law.  She did not appear.  The trial court entered a default judgment.  She then moved to set aside the judgment, but the court denied her motion.

The Supreme Court held that, as long as service by mail is performed in compliance with the forum’s law, Article 10(a) of the Hague Service Convention permits such service by mail on foreign defendants unless the country in which service was made has objected to this type of service.  Article 10(a) provides that the Convention will not interfere with “the freedom to send judicial documents, by postal channels, directly to persons abroad,” but does not expressly refer to “service.”  For decades, the lower courts had split over whether this provision extends to service of process or is limited to service of other documents and pleadings.  Compare, e.g., Bankston v. Toyota Motor Corp., 889 F. 2d 172, 173-74 (8th Cir. 1989) (holding that sending summons and complaint to defendant in foreign country does not constitute valid service under Hague Convention) with Brockmeyer v. May, 383 F. 3d 798, 802 (9th Cir. 2004) (holding that the meaning of “send” in Article 10(a) includes “serve.”).

The question whether the Hague Convention permits service by mail has now been answered.  The answer is a qualified “yes,” as long as such service complies with the forum’s service requirements and that the country where the defendant is located did not object to Article 10(a).  This broader acceptance of international service via mail may, by lowering procedural barriers to entry, have the unfortunate effect of haling more foreign manufacturers or foreign parent companies into US Courts.

Water Splash does not eliminate all opportunities for defendants to avoid claims brought against foreign manufacturers, however.  A variety of other remedies are still available to a foreign defendant.  Most notably, Plaintiffs may mistakenly try to extend this ruling to effect mail service on a defendant in a country that has not ratified the Convention, or that has objected to such service.  Or, the plaintiff may fail to effect mail service in compliance with forum law.  The Hague Convention does not render such service sufficient.

Moreover, even if a US Court upholds service against a foreign defendant under the US’s liberal interpretation of the Hague Service Convention, a judgment might be unenforceable in the courts of the foreign defendant’s domicile.  Foreign courts may refuse to enforce a judgment entered in the US by deciding that the American court lacked personal jurisdiction over the local defendant.  Or, in some signatory countries (most notably Japan), that did not object to the Hague Service Convention, courts may not enforce a foreign judgment where service did not comport with the Hague Service Convention by including a copy of the summons and complaint in Japanese.

More traditional errors, too, can still render mail service on foreign companies ineffective to sustain a lawsuit in the US.  For example, a plaintiff serving a foreign entity may underestimate the time required to serve that entity, even if the service is performed by mail.  If the complaint is not properly served within the time provided by the forum state’s state statute of limitations and whatever state-law tolling provision allows for relation back of service, the claim can be dismissed.  See Walker v. Armco Steel Corp., 446 U.S. 740, 750 (1980); Bancorp Leasing & Fin. Corp. v. Agusta Aviation Corp., 813 F.2d 272, 274 (9th Cir. 1987).

But in significant cases, where the stakes are high and the plaintiffs’ counsel is more competent, the Water Splash decision suggests that more foreign manufacturers may have to learn to swim in American waters.

 

We pointed out earlier that Bristol-Myers Squibb Co. v. Superior Court, No. 16-466 (“BMS”), was not the only personal jurisdiction matter on the Supreme Court’s docket this term.  Argued the same day as BMS was BNSF Railway Co. v. Tyrell, a Federal Employees Liability Act (“FELA”) personal injury case raising some similar personal jurisdiction questions – but not the unprecedented expansion of “specific” personal jurisdiction presented by BMS.  We opined in our prior post that for all the difficulties that the plaintiffs in BMS encountered at oral argument, the plaintiffs in BNSF (there were two consolidated cases) had it even worse:

[W]e frankly can’t see a path to affirmance for the plaintiff in BNSF.  It could well be a unanimous reversal of the Montana Supreme Court, albeit with at least one concurrence offering a different rationale (similar to Bauman).

For the full post, go here.

BNSF was just decided, here’s the link to the opinion, and that’s pretty much what happened – reversal with only one justice (Sotomayor) concurring in part and dissenting in part – as was the case in Bauman.  Also as in Bauman, Justice Ginsburg authored the opinion of the Court.

Briefly, since we discussed the facts in BNSF before, two plaintiffs sued the defendant for personal injuries under FELA in Montana state court despite:  (1) neither plaintiff being a Montana resident; (2) neither plaintiff being injured in Montana; and (3) the defendant being neither a Montana corporation nor headquartered in Montana.

By 8-1 the Court held no personal jurisdiction. The first part of BNSF was about issues peculiar to the FELA statute.  We’ll skip that – except to point out that the Court once again cautioned – as it did in Bauman – that personal jurisdiction decisions predating International Shoe Co. v. Washington, 326 U.S. 310 (1945), were of doubtful validity:

[A]ll these cases [cited by plaintiffs] were decided before this Court’s transformative decision on personal jurisdiction in International Shoe.  See Daimler, [which we call Bauman] 571 U.S., at ___, n.18 [134 S.Ct. 746, 761] n.18) (cautioning against reliance on cases “decided in the era dominated by” the “territorial thinking” of Pennoyer v. Neff, 95 U.S. 714 (1878)).

BNSF, slip op. at 9 (citations rejiggered).

After disposing of the FELA issues, BNSF turned to the Montana law issues.  The Montana Supreme Court had relied on the Montana “Long Arm” statute, which provided for the exercise of general jurisdiction over all persons “found within” the state.  Id. The terms of the statute didn’t matter much since the correct question was “whether the Montana courts’ exercise of personal jurisdiction under Montana law comports with the Due Process Clause of the Fourteenth Amendment.”  Even though it was undisputed that the defendant was “found within” Montana under the statute, there was no jurisdiction for the rather transparently obvious reason that no state statute could go beyond what constitutional Due Process permitted:

[T]he business [defendant] does in Montana is sufficient to subject the railroad to specific personal jurisdiction in that State on claims related to the business it does in Montana. But instate business, we clarified in [Bauman] and Goodyear, does not suffice to permit the assertion of general jurisdiction over claims like [plaintiffs’] that are unrelated to any activity occurring in Montana.

Id. at 11-12 (footnote omitted).

For DDLaw’s purposes, not specific to railroads, that’s the most significant aspect of BNSF.  Some courts, most notably Bors v. Johnson & Johnson, 208 F. Supp.3d 648 (E.D. Pa. 2016), which we discussed here, seem to have overlooked the point that a peculiarly worded state statute simply cannot override the Due Process constraints enforced in BNSF and Bauman.  Thus, that the unusual language of a state enactment (Pennsylvania’s corporate registration statute) in Bors could be read to allow personal jurisdiction (in Bors “consent” jurisdiction) beyond the Due Process limits of Bauman means nothing.  State statutes cannot extend personal jurisdiction to unconstitutional extremes – as BNSF held with respect to the “found within” language in Montana’s Long Arm statute.

Thus, although BNSF did not reach the issue of jurisdiction by consent, slip op. at 12, its rationale should be fatal to decisions like Bors that purport to hold that a state statute can authorize an otherwise unconstitutional scope of personal jurisdiction.

While we are waiting for the Supreme Court to rule in Bristol-Myers Squibb Co. v. Superior Court, No. 16-466 (“BMS”), an interesting thing happened.  Last week in TC Heartland LLC v. Kraft Foods Grp. Brands LLC, ___ S.Ct. ___, 2017 WL 2216934 (U.S. May 22, 2017), the Court interpreted the federal venue statute peculiar to patent litigation, 28 U.S.C. §1400(b), to restrict the ability of patent plaintiffs to bring their cases anywhere in the country.  2017 WL 2216934, at *7.  Reaffirming the viability of a 60-year- old decision, Fourco Glass Co. v. Transmirra Products Corp., 353 U.S. 222 (1957), the Court held that patent infringement actions could only be brought where the defendant “resides,” which in the case of corporations meant only where they were incorporated.  2017 WL 2216934, at *7.

A lot has been written already about how TC Heartland means the demise of the Eastern District of Texas as the equivalent of Madison County, Illinois for patent litigation.  That is not our sandbox, and we’re not here to discuss that.  For our purposes, we’re intrigued by the Court unanimously restricting – albeit under a federal venue statute, not the Due Process Clause of the Constitution – widespread plaintiff-side forum shopping leading to suits piling up in particular magnet jurisdictions.  From a policy standpoint, that’s also what BMS is about.

Indeed, we tangentially encountered patent-based forum-shopping before. In this post, we discussed a decision of the Federal Circuit in a patent case, Acorda Therapeutics Inc. v. Mylan Pharmaceuticals, Inc., 817 F.3d 755 (Fed. Cir. 2016), which involved a related question of personal jurisdiction − that a defendant’s “plans to market its proposed drugs” in a jurisdiction were enough to support jurisdiction under minimum contacts/specific jurisdiction analysis in patent cases. Id. at 762-63.  We weren’t concerned with that patent-specific proposition.  Rather, we were interested in the alternative argument – ultimately avoided in Acorda – that sought to assert general jurisdiction under Delaware law simply because the defendant had registered to do business in the state and thereby supposedly “consented” to be sued there for anything by anyone.  The only reason expansive personal jurisdiction arguments were being made in Acorda was to support the equally expansive notions of venue in patent cases that TC Heartland has just consigned to the dustbin of legal history.

In any event, that alternative argument in Acorda is now moot because only a month later (to the day), the Delaware Supreme Court rejected jurisdiction by consent under state law in Genuine Parts Co. v. Cepec, 137 A.3d 123, 147 (Del. 2016) (holding that Bauman “indicates that such a grasping assertion of state authority is inconsistent with principles of due process”).  The Acorda situation does demonstrate, however, the relationship between the expansive notions of personal jurisdiction before the Supreme Court in BMS and the expansive notions of venue that bit the dust in TC Heartland.

There is one other interesting point that we learned reading TC Heartland.  We had never had much occasion to consider the general federal venue statute, 28 U.S.C. §1391(c), that was the principal basis for the expansive venue arguments that the Court rejected in TC Heartland.  The Court quoted that statute:  “[f]or purposes of venue under this chapter, a defendant that is a corporation shall be deemed to reside in any judicial district in which it is subject to personal jurisdiction at the time the action is commenced.” TC Heartland, 2017 WL 2216934, at *6 (emphasis added).

Thus, the general federal venue statute – applicable to all federal question actions where (unlike the patent statute) the applicable statute does not contain its own venue provisions – is dependent on where a corporation is “subject to personal jurisdiction.” That’s what is before the Supreme Court in BMS.  Thus an unremarked upon (at least by us) aspect of BMS is that the Court’s decision will also determine the scope of available venues available to federal plaintiffs in any number of situations having nothing to do with product liability.  That may be of interest to corporations, particularly if personal jurisdiction was waived in a particular case, but a motion challenging venue is still appropriate.  It may also be of interest for other reasons peculiar to federal claims that we’re not familiar with.  In any event, we invite our readers, in-house and otherwise, to think about this possible aspect of BMS for a moment.