The Defendant/Petitioner has filed its merits brief in the U.S. Supreme Court in BMS v. Superior Court.  This is the case where the California Supreme Court expanded specific personal jurisdiction beyond recognition by basing specific jurisdiction on a pharmaceutical company’s forum contacts involving different products and people other than the plaintiffs.  We wrote about the opinion and its problems here, here, and here, and the opinion came in at number one on our 2016 worst ten list.

As expected, the Petitioner pharmaceutical company has put forth compelling arguments that the California Supreme Court’s version of specific jurisdiction runs against binding precedent and is an all-around bad idea. The Petitioner is also joined by a number of amici, most notably the United States of America.  (You can view all the briefs on the SCOTUSblog here.)  If we have been critical of the Solicitor General in the past, we will voice no concern this time around.  The SG hit the nail on the head, and the United States’ brief reinforces the Petitioner’s very strong arguments—and adds another, which we will get to in a minute.

First, the briefs. The general thrust of both briefs is that the California Supreme Court’s “sliding scale” approach to specific jurisdiction impossibly contradicts binding precedent.  A court simply court cannot base specific jurisdiction on a defendant’s forum contacts involving other individuals and other products, no matter how intense those contacts are.

For the Petitioner, it comes down mainly to one concept—proximate causation. That is to say, for a claim to “arise from or relate to” a defendant’s forum contacts, the defendant’s activities in the state must be a proximate cause of the plaintiff’s lawsuit.  Take, for example, this opening salvo:

The [California Supreme Court] concluded that Bristol-Myers could be haled into California on respondents’ claims merely because Bristol-Myers sold Plavix to other persons and developed other products in the State.

            That is not how specific jurisdiction works.  Since International Shoe Co. v. Washington, 326 U.S. 310 (1945), this Court has made clear time and again that “specific or case-linked” jurisdiction requires a causal connection between the defendant’s forum conduct and the litigation. Goodyear Dunlop Tires Operations, S.A. v. Brown, 564 U.S. 915, 919 (2011).  That bedrock requirement ensures that a common connection links the defendant, the forum, and the litigation; that States do not assert jurisdiction over matters occurring and directed entirely outside their borders; and that any litigation to which a defendant is subject is a direct and foreseeable consequence of its in-state activities.  Courts cannot dispense with this causation requirement because a defendant has wide-ranging contacts with a State.  Only general jurisdiction allows that, and then only where the defendant is at home.

Petitioner’s Br. at 2. This is (or at least should be) an uncontroversial description of specific jurisdiction, and the Petitioner draws from it that specific jurisdiction requires a “causal connection” between the defendant’s forum contacts and the plaintiff’s claims. Id. at 14.

Continue Reading Solicitor General Urges Supreme Court to Reverse California’s Ill-Conceived Version of “Specific Jurisdiction”

This is a follow-up to our post last week on the Missouri Supreme Court’s momentous personal jurisdiction decision in State ex rel. Norfolk Southern Railway Co. v. Dolan, ___ S.W.3d ___, 2017 WL 770977 (Mo. Feb. 28, 2017) (“NSRC”).  We stated last week, and we continue to believe, that NSRC will ultimately kill litigation tourism in Missouri.

However, it won’t be easy.  Nothing ever is against the rich and entrenched litigation industry.

As we would expect, the other side is talking out both sides of its mouth about NSRC.

On one hand, in the ongoing legislative push for a statutory fix to the bizarre and unfair way that courts have interpreted Missouri’s venue and joinder rules (see our post here), those supporting the other side of the “v.” are already claiming that the venue/joinder reform bill (H.B. 460 – which will be on the House floor this week) is no longer necessary; that NSRC supposedly “fixed” everything.

On the other hand, and essentially simultaneously, in the multi-plaintiff mass tort litigation that is the main reason tort reform is so desperately needed, they’re doing the opposite –  trying to get around NSRC by claiming “pendent party” jurisdiction as a result of the very same venue/joinder problems that venue/joinder reform and H.B. 460 is intended to fix.

Talk is cheap.  Watch what they do, not what they say.

They can’t have it both ways. In fact, they can’t have it either way.  The plaintiffs’ first position is garbage, and the second is devoid of legal support.

For the reasons stated in our original post, H.B.460 remains necessary after NSRC.  NSRC established that personal jurisdiction over non-resident corporations by non-resident plaintiffs over injuries not arising in Missouri is unconstitutional under the Due Process clause.  There is no general personal jurisdiction because the defendant is not “at home.”  There is no specific personal jurisdiction because out-of-state injuries to out-of-state plaintiffs are not “related to” a defendant’s Missouri activities.  There is no “consent” merely by registering to do business.

But as good as it was, NSRC was not a mass tort case.  Rather, it was an individual litigation tourist plaintiff suing a single non-resident corporation.  NSRC thus had no occasion to address either the 99-plaintiff misjoined tort complaints that have become the bane of Missouri product liability practice or the 99-defendant complaints that are typical of asbestos (and some other) product liability litigation.  Eliminating those abuses are at the core of H.B. 460, meaning that the reforms proposed in H.B. 460 remain every bit as necessary as before.  As we discussed, the court of appeals in Barron v. Abbott Laboratories, Inc., ___ S.W.3d ___, 2016 WL 6596091, at *13 (Mo. App. Nov. 8, 2016), invited the legislature to correct the venue/joinder rules, and that is exactly what H.B. 460 will do.

Continue Reading More on Missouri – What To Expect and Not To Expect After Norfolk Southern v. Dolan

If we’d learned about State ex rel. Norfolk Southern Railway Co. v. Dolan, No. SC95514, slip op. (Mo. Feb. 28, 2017) (“NSRC”), earlier, this would have been a breaking news post – but make no mistake about it, this is big news.  Unanimously, the Missouri Supreme Court has, for all intents and purposes, put an end to Missouri’s notorious litigation tourism industry (about a month before the Legislature would have done the same).

NSRC is a railway accident case, not a product liability action, but the jurisdictional facts are familiar to anyone interested in Missouri jurisdiction and venue issues. An out-of-state litigation-tourist, personal-injury plaintiff sued a large out-of-state corporation in Missouri state court (county not stated, but we can guess) over injuries not suffered in Missouri. NSRC, slip op. at 2-3.  The Missouri Supreme Court made three major rulings:  (1) no general jurisdiction exists over the non-resident corporate defendant because it was not “at home” in Missouri; (2) no specific jurisdiction existed because the litigation tourist’s injuries did not “relate to” the defendant’s Missouri activities; and (3) the defendant’s compliance with the Missouri statute governing corporate registration did not constitute “consent” to general personal jurisdiction.

First, general jurisdiction.  Due process under Daimler AG v. Bauman, 134 S. Ct. 746, 751 (2014), requires that a corporation be “at home” in the state in question.  While the defendant conducted “continuous and systematic” business in Missouri (and in 21 other states), that business “represents a tiny portion of [defendant’s] entire nationwide business.” NSRC, slip op. at 8.  Game over on general jurisdiction . Bauman “observed that finding a corporation at home wherever it does business would destroy the distinction between general and specific jurisdiction.”  Id. at 9.

Continue Reading Litigation Tourism Ended In Missouri

The United States Supreme Court today granted certiorari in Bristol-Myers Squibb Co. v. Superior Court.  Here is a link to the order.  The California Supreme Court decision in this case was our worst case for all of 2016.  Here is our description of what the Supreme Court has just agreed to review:

Bristol-Myers-Squibb v. Superior Court, 377 P.3d 874 (Cal. 2016). Ultimately (and fortunately) there was not much contest for the worst drug/device product liability decision of the year.  The highest court of the largest state in the country – check.  Direct defiance of United States Supreme Court precedent on a significant constitutional issue – check.  Significant impact on the litigation of mass torts – check.  In Bauman, the Supreme Court condemned “exorbitant exercises” of general jurisdiction that do not “permit out-of-state defendants to structure their primary conduct with some minimum assurance as to where that conduct will and will not render them liable to suit.”  Such “unacceptably grasping” “[e]xercises of personal jurisdiction [are] so exorbitant” that they “are barred by due process.”  The paradigm of such overly “grasping” jurisdiction is that which “would presumably be available in every other State in which a [defendant’s] sales are sizable.”  So the California Supreme Court promptly fashions a theory of “specific” jurisdiction that allows masses of plaintiffs, anywhere in the country, to sue a drug company (and presumably any other large corporation), as long as one Californian (or, here, 86 of 678) is suing over the same conduct.  The reason?  Because the defendant does significant general business in California.  If your reaction is that BMS simply shifted the pre-Bauman “continuous and substantial” jurisdiction standard from general jurisdiction to specific jurisdiction, you would be right.  We haven’t seen such blatant defiance of Supreme Court precedent in our bailiwick since the First Circuit in Bartlett (2012-1), and that one headed up our bottom ten, too.  Here’s hoping for a similar result in the Supreme Court.  We chronicled California sliding to the bottom of the slippery slope here and here.

If our side wins this, then we’ll see a significant reduction in both the size and reach of litigation in all those places where we don’t want to be. We’ll be following this closely.

This is the second time in two years that we have written the Drug and Device Law Christmas blogpost. Last year, your dedicated blogger posted on Christmas Day a nice little piece on innovator liability that we are sure you all read while listening to Andy Williams, drinking egg nog, and roasting chestnuts on an open fire (note: If you would rather not light an open fire, a gas grill is a very capable substitute for roasting chestnuts, if that is your thing.) If you did not read our post last year, we forgive you.  And whether you read us regularly or just pop in from time to time to read about preemption, please accept our holiday greetings and our undying gratitude.  To all our readers, Happy Holidays from the DDLB!

Our gift to you on this Friday, December 23, 2016, is a blogpost discussing a topic on which we have not written a lot—alter ego personal jurisdiction.  That is when a court takes jurisdiction over a corporation based on the forum contacts of a corporate subsidiary.  We wrote about a district court rejecting alter ego jurisdiction here, but there is not much else discussing the subject in detail in the archive. That could be because successful examples of alter ego jurisdiction are exceedingly rare.  The most common scenario is where plaintiffs sue an alleged corporate wrongdoer and try to hale into court not only the alleged wrongdoer, but also its out-of-state corporate parent.  Their motivation is not a mystery:  Plaintiffs want more defendants, larger balance sheets, and deeper pockets to reach into.  And if the corporate parent has a recognizable “big” name, that’s all the better.

Unfortunately for plaintiffs and fortunately for the defense, this transparent ploy rarely works, and it did not work in a recent hip replacement case, Goldthrip v. Johnson & Johnson, No. 15-00651-KD-B, 2016 U.S. Dist. LEXIS 170801 (S.D. Ala. Dec. 8, 2016).  In Goldthrip, the plaintiffs sued not only the company that made and sold the hip implant, but also its corporate parent.  There were, however, two problems:  First, the plaintiffs sued in Alabama, but the parent corporation was a New Jersey company.  Second, the parent corporation neither made nor sold products; it was a holding company, as parent companies often tend to be. Id. at **2-4.

Continue Reading Alter Ego and Agency – A Different Spin on Jurisdiction

We do a lot of grousing on this blog, but we acknowledge that there is much for which we should be thankful.  This legal business permits us to keep our minds lively and our fingernails clean.  Even the rotten decisions aren’t totally awful; they force us to stay busy, offer a fine target for snark, and it is beyond glorious when logic and justice eventually triumph and eradicate the offending ruling.  (We’re looking at you Conte.  Your days are numbered.)

The Supreme Court’s decision in Bauman is an example of the beneficent arc of history.  After decades of doctrinal incoherence on personal jurisdiction, under which a large corporation could pretty much be sued anywhere for anything, SCOTUS restored common sense by holding that a court could exercise general personal jurisdiction over a corporation only if that corporation was “at home” in that jurisdiction – which pretty much was limited to the place of incorporation or principal place of business.  We blogged about Bauman more than once, but you can start here.  Around the same time as Bauman, SCOTUS issued the Walden v. Fiore opinion, which limited specific jurisdiction over corporations to cases where the corporation’s conduct targeted the jurisdiction and gave rise to the action in that jurisdiction.  Simple, right?

Wrong, says the California Supreme Court.  Bristol-Myers Squibb Co. v. Superior Court was a classic exercise in mass tort litigation tourism, as plaintiff lawyers cobbled together a group of plaintiffs who claimed that they had been injured by ingesting Plavix.  Out of 678 plaintiffs, only 86 lived in California.  The other 592 plaintiffs neither lived in California nor sustained any injury there.  It is not as if those plaintiffs knocked back Plavix after enduring the scary experience of Space Mountain at Disneyland or the Angels’ ineptitude at the Big A in Anaheim.  None of the Plavix was manufactured in California.  Clearly, the plaintiff lawyers had engaged in transparent forum-shopping, hoping that their non-California plaintiffs would benefit from pro-plaintiff California jurors and rulings.

Continue Reading Amicus Briefs Not So Friendly to California Supreme Court’s Dreadful BMS Personal Jurisdiction Decision

We are on a personal jurisdiction roll this week.  You might even say we’ve got Big Mo behind us.  That Mo, of course, refers to Momentum, though it also nicely captures the fact that yesterday’s defense-favorable personal jurisdiction case (Addelson) came out of Missouri.  Today’s case, Bauer v. Nortek Global HVAC LLC, 2016 WL 5724232 (M.D. Tenn. Sept. 30, 2016), is out of the Middle District of Tennessee.  The Bauer case does not involve drugs or medical devices. Rather, a bunch of consumers claimed they bought bum air conditioners.  But Bauer is a very interesting case because that ‘bunch’ of consumers styled themselves as a class or classes.  Thus, Bauer offers a useful application of Bauman personal jurisdiction principles to class actions.  The reasoning and prose are both sharp.

The Bauer class representatives came from Tennessee, Florida, Georgia, and Texas. (Why they didn’t add Alabama, Arkansas, Kentucky, Louisiana, Mississippi, and South Carolina to represent the entire SEC, we don’t know.  In any event, it is certainly understandable why clever plaintiff lawyers might want to cobble together classes of aggrieved air-conditioner buyers who live in hot places.) The claims included breaches of warranties and violations of the various states’ deceptive trade practices acts.  The defendants were not incorporated in Tennessee, nor did they have a principal place of business there.  One of the defendants had a distribution/manufacturing facility in Tennessee.  So what, you say?  You are exactly right, as it turns out.  The defendants filed a motion to dismiss all claims brought by the non-Tennessee plaintiffs for lack of personal jurisdiction.  The defendants won that motion.  They also moved to dismiss the Tennessee plaintiff’s claims based on the statute of limitations.  The defendants won that motion, too.  But for today’s purposes, we are focusing on the jurisdictional argument.

Continue Reading M.D. Tenn. Bids Adieu to Out-of-State Class Reps

This post is from the non-Reed Smith side of the blog.

There are two key rulings in Addelson v. Sanofi S.A., 2016 WL 6216124 (E.D. Mo. Oct. 25, 2016). Neither is novel or complex. The court can’t exercise personal jurisdiction over an out-of-state defendant on claims made by an out-of-state plaintiff and said out-of-state plaintiff can’t be used to defeat federal diversity jurisdiction. Their significance lies more in the fact that they were issued by the Eastern District of Missouri.

Defendant Sanofi (the U.S. subsidiary) is a Delaware corporation with its principal place of business in New Jersey. Id. at *1. Plaintiff Addelson is a resident of St. Louis County, Missouri. Plaintiff Braxton is a New Jersey resident. Plaintiffs both were prescribed and used the prescription medication taxotere in their home states. Id. Plaintiffs have no relationship with each other.

Plaintiffs’ counsel filed a single complaint on behalf of both women in state court in Saint Louis, Missouri – a known judicial hellhole favored by the plaintiffs’ bar. So, why join these two women? Plaintiff Addelson is a Missouri resident who suffered her alleged injury in Missouri which establishes personal jurisdiction for this incident over Sanofi. Plaintiff Braxton is a New Jersey resident which means there is no diversity between her and Sanofi which also means the case can’t be removed to federal court. Clearly a not-too-subtle attempt by plaintiffs to bring and keep this case in state court in St. Louis. Unfortunately, this is a tactic that has worked in Missouri. Missouri’s joinder rules have been broadly interpreted to often allow plaintiffs’ counsel to join together groups of plaintiffs from different states with nothing in common except use of the same product. So, 1 Missouri plaintiff gets you the connection to Missouri and 1 plaintiff from defendant’s home state defeats diversity and keeps you in state court.

Continue Reading Misjoined Plaintiffs Can’t Be Used to Forum Shop

Not all personal jurisdiction cases coming out of Pennsylvania are bad.  To be sure, an ED Pa judge’s recent embrace of the consent theory to get around Bauman was bad news – almost as bad as Philadelphia 76ers soon-to-be superstar Ben Simmons’s foot injury.  Happily, a much better opinion arrived last week:  Baker v. Livanova PLC et al., No. 1:16-cv-00260 (M.D. Pa. Sept. 29, 2016).  The author was Judge John E. Jones, the same judge who presided over the intelligent design case a couple of years ago.  Judge Jones has a reputation for being smart and trying to get things right, and the Baker decision won’t hurt that reputation one bit.

Baker is a putative class action, seeking medical monitoring based on an allegation that a heater-cooler system for regulating blood temperature during open heart surgeries exposed patients to a nasty bacterium.  In addition to suing companies that the court calls “Sorin” and “Sorin USA,” the plaintiffs also sued the parent company, LivaNova PLC, which is incorporated and headquartered in the United Kingdom.  The issue was whether there was personal jurisdiction over LivaNova.  (Sorin and Sorin USA did not contest personal jurisdiction.)  The plaintiffs said there was specific jurisdiction over LivaNova based on: (1) LivaNova’s contacts with Pennsylvania regarding the heater-cooler system, (2) LivaNova functioned as the alter ego of its subsidiaries, and (3) the almost ancient case of Worldwide Volkswagen Corp. v. Woodson, 444 U.S. 286 (1980), placed distributors on the jurisdictional hook.  Note that general jurisdiction was not at issue, so the lovely Bauman case does not make even a cameo appearance. Then again, neither does the Walden case, which was decided by SCOTUS around the same time as Bauman and which says very important things about specific jurisdiction.  But even without discussing Walden, Judge Jones addresses plaintiffs’ argument correctly and coherently.  You might even say that the Baker case has an intelligent design.

Continue Reading M.D. Pa. Finds No Specific Personal Jurisdiction over Parent Company

The U.S. Supreme Court’s game-changing Bauman opinion in 2014 has us writing a lot on personal jurisdiction.  A while back we marveled over how quickly lower courts have responded to Bauman.  We had anticipated that it would take the passage of an entire generation of lawyers and judges steeped in International Shoe for Bauman’s more disciplined concept of general personal jurisdiction to take root.  The actual results have been better than we expected.  There have, however, been some bumps in the road.  There was the California Supreme Court’s aggressive take on specific personal jurisdiction in Bristol-Myers Squibb Co. v. Superior Court, where the court expanded this prong of personal jurisdiction beyond recognition.  The court essentially slapped the “specific jurisdiction” label on concepts of general jurisdiction that the U.S. Supreme Court overruled.  We discussed that case here.

Another open battlefield is jurisdiction by consent, and a district court in Pennsylvania recently entered an order favoring consent that again stretches personal jurisdiction beyond Constitutional limits.  The case is Bors v. Johnson & Johnson, No. 16-2866, 2016 U.S. Dist. LEXIS 128259 (E.D. Pa. Sept. 20., 2016), and the district court in Bors held that a foreign corporation consented to general personal jurisdiction in Pennsylvania merely by registering to do business in Pennsylvania. Id. at **1-12.  It was undisputed that the corporation had no other contacts with Pennsylvania and that the plaintiff’s action arose from commercial transactions that occurred outside that commonwealth.  In this district court’s view, the foreign corporation registration alone justified subjecting the corporation to general personal jurisdiction in Pennsylvania, i.e., personal jurisdiction over any dispute whatsoever, no matter the subject matter.

The district court was not writing on a clean slate. Since Bauman, several courts have considered consent to jurisdiction, and most have decided that registering to do business does not alone constitute consent to personal jurisdiction.  A notable example is Brown v. Lockheed-Martin Corp., 814 F.3d 619 (2d Cir. 2016), where the Second Circuit rejected “jurisdiction by consent” based on business registration and which prompted us to create our post-Bauman jurisdiction scorecard (including all consent cases), which you can find here.  The Second Circuit rejected general personal jurisdiction because allowing jurisdiction though “routine bureaucratic measures” would rob Bauman of any meaning by way of a “back door thief.”  814 F.3d at 640.  Nice.  In another major decision, the Delaware Supreme Court relied on Bauman to reverse its older decisions that had recognized jurisdiction by consent. See Genuine Parts Co. v. Cepec, 137 A.3d 123, 144-48 (Del. 2016).

For the district court in Bors, there was one fact that trumped everything else, including Bauman’s due process analysis:  Pennsylvania’s statute “specifically advis[ed] the [foreign corporation] registrant of its consent to personal jurisdiction through registration.” Id. at *2 (citing Pa. Consol. Stat. Ann. § 5301).  From this manifestation of “consent,” the district court found general personal jurisdiction and held that “general and specific jurisdiction principles applying to non-consensual personal jurisdiction do not apply.” Id.

Continue Reading Pennsylvania’s Long Arm Overreaches The Constitution And Bauman