With a little luck on our part, by the time you read this we will be vacationing in a sunnier clime.  Our beachfront cottage is an Oddjob’s hat-toss away from where Ian Fleming wrote the James Bond novels.  Mind you, we are not pretending to be serving On Her Majesty’s Secret Service.  If anything, with the secluded location of our holiday, the absurd luxury, and our ever-expanding girth, we are more appropriately cast as a Bond villain.  That suits us just fine.  More than one plaintiff lawyer has called us Dr. No. And more than once, we have reached under our desk, probing for a trap-door button that would plunge an opponent into the piranha pool.

The judge in today’s case, Livingston v. Hoffman-LaRoche Inc., No. 17C-7650-MEA (N.D. Ill. March 7, 2018), pushed the button, holding that there was no personal jurisdiction.  Livingston was yet another Accutane case, with allegations of bowel injury.  We have written frequently on the aggregated forms of this litigation in both the federal and New Jersey court systems.  The Livingston case is different.  To be sure, the Livingston opinion last week was largely an obvious application of the SCOTUS Bauman and BMS cases, but there was a scary threat lurking just off-stage.  More on that later.  Moreover, anything good on jurisdiction from Illinois is noteworthy.


The history of the Livingston case is more complicated than the plot of The World is Not Enough.  The case was originally filed in Cook County, Illinois – a fabulous pro-plaintiff jurisdiction.  The case was then removed.  Then it was remanded — nine years ago.  The case sat in state court with little happening.  The generics got out on Pliva v. Mensing in the meantime, but by then the branded defendant could no longer remove the case because of the one-year bar.  Then the plaintiff lawyers did the defense a great favor (not the last) by taking their one dismissal in Illinois, which allowed them to refile within a year.  The plaintiff eventually did refile in Cook County, and the branded defendant removed.  That’s the case in our sights today.  The case was initially assigned to a different judge, but then it got reassigned to the same federal judge who remanded a long time ago.  The defendant would have been entitled to view that as a bad sign.  But it wasn’t.

So much for foreshadowing.  Here are the facts, at least the ones that matter for this decision.  The plaintiff took Accutane to treat his acne in Wisconsin in 1999 and in Ohio in 2004.  In 2005, the plaintiff had a surgical procedure to remove his colon.  The gravamen of the plaintiff’s lawsuit is that Accutane made this surgery necessary.  More specifically, the plaintiff claimed that the product was defectively designed and was accompanied by inadequate warnings.  But we are getting ahead of ourselves.  The plaintiff moved to Illinois in 2007. There, he was prescribed a generic version of the drug that allegedly caused him the earlier harm, and the plaintiff asserted that his Illinois doctor committed malpractice.  It is because the plaintiff lived in Illinois that he filed his lawsuit there, even though the manufacturer of branded Accutane was not “at home” in Illinois and the branded prescription and the alleged injury occurred outside of Illinois.

It is thus no surprise that the branded defendant moved to dismiss for lack of personal jurisdiction.  The plaintiff filed no opposition.  The Livingston court references a reply brief filed by the defendant.  Presumably, that reply brief was one of those short, triumphal papers pointing out that the plaintiff’s silence amounts to a concession, so a ruling for the defendant should be compulsory and easy.  And, in fact, the dismissal for want of personal jurisdiction was compulsory and easy.  We’ve seen a report on this case in one of the major online legal publications, and for some reason that report focused on general jurisdiction.  That aspect of the decision is certainly the least interesting part.  The manufacturer of Accutane was not incorporated in Illinois and did not locate its headquarters there.  To our mind,  Bauman makes that a no-brainer.
No, for us there are two angles to the decision that are much more interesting.  First, the Livingston court followed what seems to be the emerging consensus rule for federal courts faced with simultaneous issues of subject matter jurisdiction (is there diversity?  is there fraudulent joinder?) and personal jurisdiction (can this particular defendant be sued by this particular plaintiff here?).  Plaintiffs would prefer the district court to handle the subject matter jurisdiction issue first, conclude that the defendant had not met the difficult test for fraudulent joinder, and then remand the case to state court without ever getting to personal jurisdiction.  Defendants would prefer the federal court to look at personal jurisdiction, find it does not exist, and then dismiss the case without ever getting to subject matter jurisdiction.  It turns out the defendants are right and the plaintiffs are wrong (you’re not exactly surprised to hear us say this, are you?) for a simple reason — literally a simple reason: the personal jurisdiction issue is simple, and the fraudulent joinder issue is not.  That is what the Livingston court concluded, alluding to the “enormous judicial confusion” engendered by the fraudulent joinder doctrine, while viewing the personal jurisdiction issue as being “straightforward” and not presenting “a complex issue of law.”  As addressed above, the general jurisdiction prong of personal jurisdiction truly was simple here: no incorporation or headquarters means no general jurisdiction.
The specific jurisdiction prong was almost as simple, though we are mindful that some plaintiff lawyers and some courts now seem determined to make it much less simple.  (We recently read of a court from one of the very worst jurisdictions deciding to tackle the subject matter jurisdiction issue first, because the plaintiffs had successfully muddied the personal jurisdiction waters.  We don’t recall the judge’s name.  Perhaps Blofeld?)  As SCOTUS set forth in Walden v. Fiore, to support the exercise of specific personal jurisdiction, “the defendant’s suit-related conduct must create a substantial connection with the forum state.”  Here, the plaintiff’s Accutane prescription and treatment occurred outside of Illinois.  Predictably, the plaintiff alleged that the branded defendant “marketed, distributed, and sold” Accutane all over the United States, including Cook County.  The answer to that is: So what?  That conduct played no role in the plaintiff’s injury.  What about the fact that the plaintiff does currently reside in Illinois?  Again, Walden supplies the refutation: “[T]he plaintiff cannot be the only link between the defendant and the forum.  Rather, it is the defendant’s conduct that must form the necessary connection with the forum state that is the basis for its jurisdiction over him.”  Go back and read the facts of the Walden case, and you will understand how the plaintiff’s residence, absent some connection to the defendant’s conduct, cannot unilaterally establish specific personal jurisdiction.  End of story.  Push the button. Cue the piranhas.

But there is one additional, potentially interesting aspect of this opinion.  The physician who prescribed the generic version of the drug was, in fact, a citizen of Illinois.  Again, the court regarded this as a big fat So-what:  “The claim against the local doctor did not mention the manufacturer of Accutane, involved the generic product only, “comprises different time periods, and entails different injuries.”  Swell.  But we must admit that as we read the final portion of the Livingston opinion, we were haunted by a spectre.  It is very, very nice that the bottom line of Livingston is that the prescription of a generic drug in Illinois did not create personal jurisdiction over the brand defendant. For a moment, though, a terrible dread wormed its way into our brain-pan.  We alluded above to the fact that Illinois is the home of some awful personal jurisdiction opinions.  Illinois has also been crazy-bad on the issue of innovator liability.  One might have feared that an Illinois court might contrive to find a way to merge innovator liability with the “arise out of”/”related to” prong of specific jurisdiction and thereby keep the case in Illinois. If a branded company can be on the hook for injury allegedly caused by a generic, why not require the branded company come to the forum where the generic was consumed.  An utterly crazy syllogism is at work there.  But Illinois is the one jurisdiction batty enough (well, along with California) to throw out all of tort and jurisdictional law on grounds of foreseeability and misplaced judicial compassion.  Such an outrageous opinion would have made the judicial sky fall. Mercifully, that did not happen in the Livingston case.  Indeed, now defendants have a precedent to argue that it never should.

We offer a tip of the cyber-cap to the winning lawyers, a defense all-star team including longtime friend-of-the-blog Michael Imbroscio (Covington), as well as Colleen Hennessey (Peabody), and Sherri Arrigo (Donohue Brown).

Several decisions since the beginning of the year, and two appellate rulings in the last couple of weeks, highlight another aspect of Bristol-Myers Squibb Co. v. Superior Court, 137 S. Ct. 1773 (2017) (“BMS”), that should be valuable to defendants.  BMS – which dealt with what the Court called “case-linked” (also known as “specific”) personal jurisdiction, had some choice things to say about what kind of forum-related contacts suffice to confer jurisdiction.

Under BMS, case-linked jurisdiction “must “arise out of or relate to the defendant’s contacts with the forum.”  Id. at 1780 (internal quotes omitted) (emphasis original).  Where the “relevant conduct occurred entirely” out of state, “the mere fact that this conduct affected plaintiffs with connections to the forum state did not suffice to authorize jurisdiction.”  Id. (internal quotes omitted) (emphasis original).  Without a plaintiff/case-specific factual hook, “specific jurisdiction is lacking regardless of the extent of a defendant’s unconnected activities in the State.”  Id.

Finally, the BMS court reiterated that a defendant’s distributing a product through independent third parties doesn’t create case-linked jurisdiction either.

A defendant’s relationship with a third party, standing alone, is an insufficient basis for jurisdiction.  In this case, it is not alleged that [defendant] engaged in relevant acts together with [its distributor] in [the forum]. . . .  The bare fact that [the defendant] contracted with a [forum] distributor is not enough to establish personal jurisdiction in the State.

Id. at 1783 (various citations and quotation marks omitted).  BMS also cited (many times) and followed World-Wide Volkswagen Corp. v. Woodson, 444 U.S. 286 (1980), which BMS described as holding that an “isolated occurrence” is not capable of supporting jurisdiction where “the defendant carried on no activity” in the state “whatsoever” and one of its products, in a “fortuitous circumstance,” caused injury when it “happened to suffer an accident while passing through” the state.  BMS, 137 S. Ct. at 1782.

And, of course, as we’ve mentioned before, there is also the federalism aspect of BMS:

[T]he primary concern is the burden on the defendant. . . .  [E]ven if the defendant would suffer minimal or no inconvenience from being forced to litigate before the tribunals of another State; even if the forum State has a strong interest in applying its law to the controversy; even if the forum State is the most convenient location for litigation, the Due Process Clause, acting as an instrument of interstate federalism, may sometimes act to divest the State of its power to render a valid judgment.

Id. at 1780-81 (several internal quotation marks from World-Wide Volkswagen omitted).

The discussion in BMS – particularly given that it was authored by Justice Alito – suggested to us that so-called “stream of commerce” (“SoC”) jurisdiction is also likely on its way out.  SoC jurisdiction, for those of you who don’t live with this stuff day in and day out, doesn’t involve litigation tourists.  Rather, it is s theory that plaintiffs advance when they claim to be injured in the forum by the product of a defendant that has nothing to do with that forum, except that in Tinker to Evers to Chance to Steinfeldt to Kling to Sheckard to Slagle to Schulte fashion, its product wound up in the state due to the independent actions of others.  The product causing harm in the jurisdiction, without more, is purportedly enough to create case-linked personal jurisdiction under this theory.  The defendant need not have intended, or even be aware, that its products were present in the forum state.

As we discussed here, in connection with the last time the United States Supreme Court addressed this variant of case-linked jurisdiction directly, SoC jurisdiction, particularly in its more extreme forms, does not depend the defendant having deliberately acted to market its products in the forum state.  Instead “stream of commerce” is just what it sounds like.  The only connection between the defendant and the jurisdiction is happenstance, in that random acts of intermediate product distributors-owners-sellers-whoever happened that brought the particular injury-causing product into the jurisdiction.

SoC jurisdiction has never commanded a majority on the Supreme Court. The best it ever did was four justices in Asahi Metal Industry Co. v. Superior Court, 480 U.S. 102 (1987), which not surprisingly arose from California.  In Asahi, Justice Brennan, speaking for four justices, stated:

As long as a participant in this process is aware that the final product is being marketed in the forum State, the possibility of a lawsuit there cannot come as a surprise.  Nor will the litigation present a burden for which there is no corresponding benefit.  A defendant who has placed goods in the stream of commerce benefits economically from the retail sale of the final product in the forum State, and indirectly benefits from the State’s laws that regulate and facilitate commercial activity.  These benefits accrue regardless of whether that participant directly conducts business in the forum State, or engages in additional conduct directed toward that State.

480 U.S. at 117.  This passage was dictum (no jurisdiction existed on the facts of Asahi) in a concurring opinion, but the concept of SoC jurisdiction in the absence of any forum-directed conduct by the defendant has persisted for decades.

In 2011, the Supreme Court held that SoC jurisdiction could not be asserted as a form of general jurisdiction in Goodyear Dunlop Tires Operations, S.A. v. Brown, 564 U.S. 915, 929 (2011).  However, due to a concurring opinion by Justice Alito, the Court was unable to administer the coup de grâce in J. McIntyre Machinery, Ltd. v. Nicastro, 564 U.S. 873 (2011).  Four justices “conclu[ded] that the authority to subject a defendant to judgment depends on purposeful availment,” thus rejecting “the undesirable consequences of Justice Brennan’s approach” in Asahi.  Id. at 885.  This Nicastro plurality held:  (1) “jurisdiction is in the first instance a question of authority rather than fairness”; (2) “personal jurisdiction requires a forum-by-forum, or sovereign-by-sovereign, analysis”; and (3) “a defendant may in principle be subject to the jurisdiction of the courts of the United States but not of any particular State.”  Id. at 883-84.

However, Justice Alito, joined by Justice Breyer, refused “to announce a rule of broad applicability” that would have consigned SoC jurisdiction to the dustbin of history.  Id. at 887.  Instead, they agreed only that “a single sale of a product in a State does not constitute an adequate basis for asserting jurisdiction over an out-of-state defendant, even if that defendant places his goods in the stream of commerce, fully aware (and hoping) that such a sale will take place.”  Id. at 888-89.

We’ve thought, ever since BMS, that Justice Alito’s enunciation (discussed above), of the federalist model of jurisdiction in BMS should be the deathblow to the kind of SoC jurisdiction without purposeful availment that has bedeviled product liability defendants for decades.  He’s now on-board with what he wasn’t willing to join in Nicastro.  But our thoughts and a dime will get us a cup of coffee.  Now, however, several recent post-BMS decisions suggest that we’re right.

First, the Oklahoma Supreme Court the other day decided Montgomery v. Airbus Helicopters, Inc., ___ P.3d ___, 2018 WL 1164671 (Okla. March 6, 2018), and held that BMS eliminated the remaining jurisdictional underpinnings of SoC jurisdiction.  “[S]ubsequent, to [BMS] we must conclude that any ‘stream of commerce’ test applied to [defendants’] products . . . cannot establish Oklahoma jurisdiction”:

[BMS] requires an affiliation between the forum and the underlying controversy, an activity or an occurrence that takes place in the forum State, which subjects the cause to the State’s regulation.  The adjudication of issues must derive from, or be connected with, the very controversy that establishes jurisdiction.  Accordingly, a “sliding scale” approach, or “totality of the contacts” or “stream of commerce” approach is insufficient to establish specific personal jurisdiction.

Id. 2018 WL 1164671, at *9.  While Oklahoma had “an interest in adjudicating this case,” since “most of the harm” occurred there, “these facts alone, without [defendants] having further direct and specific conduct with this State directly related to the incident giving rise to the injuries, is insufficient for asserting specific personal jurisdiction over them” after BMS.  Id. at *10.  Montgomery thus wipes out a pro-plaintiff decision on SoC jurisdiction handed down within weeks of BMS.  See Tarver v. Ford Motor Co., 2017 WL 3527710 (W.D. Okla. Aug. 16, 2017).

Second, as discussed last week, Shuker v. Smith & Nephew, PLC, ___ F.3d ___, 2018 WL 1096185 (3d Cir. March 1, 2018), disposed of a SoC–based jurisdiction claim against the target defendant’s parent.  The Third Circuit had for decades avoided taking a position on Asahi-style SoC jurisdiction, neither adopting nor definitively rejecting it.  See, e.g., D’Jamoos v. Pilatus Aircraft Ltd., 566 F.3d 94, 105-06 (3d Cir. 2009) (avoiding SoC issue by holding that airplane crashing in state did not “enter” the stream of commerce “as that term is generally understood”).  But, with BMS on the books, the court flatly rejected SoC jurisdiction in Shuker.  “We perceive no merit in [plaintiffs’] stream-of-commerce theory of personal jurisdiction.”  2018 WL 1096185, at *14.  Observing that “[a] plurality of Supreme Court Justices has twice rejected the stream-of-commerce theory,” Shuker took notice of (as did we) of the relevant language in BMS:

Indeed, the Supreme Court has recently held that “[t]he bare fact that [a non-resident defendant] contracted with a [resident] distributor is not enough to establish personal jurisdiction in the State.”  [citing BMS]  We thus have no cause to revisit our Court’s precedent on this issue, and we decline to adopt [plaintiffs’] stream-of-commerce theory of specific personal jurisdiction.

2018 WL 1096185, at *14 (affirming rejection of SoC jurisdiction without any discovery).  The Third Circuit’s precedential rejection of broad SoC jurisdiction in Shuker calls into question some backward-looking district court decisions that we came across in writing this post, those being Antonini v. Ford Motor Co., 2017 WL 3633287 (M.D. Pa. Aug. 23, 2017), and Lindsley v. American Honda Motor Co., Inc., 2017 WL 3217140 (E.D. Pa. July 28, 2017).

Third, Venuti v. Continental Motors, Inc., ___ P.3d ___, 2018 WL 312532 (Utah App. Jan. 5, 2018), similarly rejected SoC jurisdiction in another plane crash case.  Beyond selling the product generally, “there [wa]s no evidence that [defendant] took any additional steps to target [the forum state] for the sale of the product.”  Id. at *4.  “[A] series of third-party sales” rather than “any deliberate action on the part of” the defendant brought the product into the state.  Id. at *5.  “[M]erely placing a product into the stream of commerce knowing that it could be swept into the forum state does not subject a manufacturer to personal jurisdiction.”  Id.  Without some “target[ing]” of the forum, that the defendant sold a lot of products generally doesn’t create jurisdiction, particularly after BMS:

When there is no connection 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 *6 (quoting BMS, 1347 S. Ct. at 1781).

Fourth, also in 2018, Moseley v. Suzuki Motor, Inc., 2018 WL 539330 (D. Idaho Jan. 24, 2018), reached the same conclusion.  The plaintiff in Moseley asserted SoC jurisdiction over a foreign product manufacturer without even bothering to allege how the product, which had been sold by a now-defunct independent distributor in Utah in 2008, made its way to Idaho by 2015, where it was involved in a fatal accident.  Id. at *1; see id. at *2 (“Plaintiffs have failed to explain how the motorcycle even ended up in Idaho”).

In the absence of any evidence that the defendant manufacturer ever “specifically targeted” the forum state, id. at *2, the Moseley court rejected SoC jurisdiction.  Where “only the distributor, but not the manufacturer, purposefully availed itself of the benefits of doing business” in a state, personal jurisdiction over the manufacturer does not exist, even if the distributor, in this particular case, was a corporate subsidiary of the defendant.  Id. at *3.

Courts are thus starting to get it.  While BMS was not a SoC jurisdiction case, it did authoritatively delineate the standards for case-linked personal jurisdiction, which under Goodyear is the only possible basis for SoC jurisdiction.  The holding in BMS that merely having in-state distributors is not enough for case-linked jurisdiction should therefore be fatal to non-purposeful availment versions of SoC jurisdiction, which rest on “contacts” (if they can even be called that) that are less significant..  In that respect, it should not matter that – unlike BMS – the plaintiffs in SoC jurisdiction cases are not litigation tourists, but rather resident plaintiffs.  If, and only if, “purposeful availment” rather than the “fortuitous” conduct of third persons brought the product into the jurisdiction, can there be personal jurisdiction under any sort of SoC jurisdiction theory after BMS – as courts now appear to be recognizing.

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

We’ve posted on two other occasions about the Shuker v. Smith & Nephew case as the Eastern District of Pennsylvania systematically dismantled the case on the grounds of preemption and pleading deficiencies. You can find those posts here and here. Unfortunately, the recent Third Circuit opinion deciding plaintiff’s appeal isn’t the full affirmance we had been hoping for. But before you get the wrong idea, the Third Circuit got the most important issue right – when you have a multi-component medical device, PMA preemption is to be addressed on a component-by-component basis. After that, however, the appellate decision does some unraveling of the district’s dismissal of the claims that survived preemption and so the case is going back to the Eastern District.

Briefly, the facts are that plaintiff underwent a hip replacement surgery in which his surgeon opted to use a Smith & Nephew device that consisted of several component parts, one of which was the R3 metal liner. Shuker v. Smith & Nephew, PLC, 2018 U.S. App. LEXIS 5160, *11 (3d Cir. Mar. 1, 2018). Unlike the other components of the device, the liner had undergone FDA Pre-Market approval. Id. And, the parties are in agreement that the surgeon’s decision to use the R3 metal liner with this particular device was an off-label use. Id. at *12. Plaintiff suffered complications that required additional revision surgeries.

In its first decision, the district court tossed out almost all claims as preempted and any non-preempted claims for being inadequately pleaded. When plaintiff filed an amended complaint attempting to correct the pleading deficiencies for the non-preempted claims, he again missed the mark and his remaining claims were dismissed with prejudice. The district court also entered a decision finding that it lacked personal jurisdiction over Smith & Nephew, PLC – a foreign parent company. Those three rulings are what the Third Circuit addressed in last week’s decision.

The question of how to apply PMA-preemption to a multi-component device was one of first impression in the Courts of Appeal. Id. at *2. And it is an important question because surgeons engaging in off-label use do mix and match parts with different regulatory backgrounds. The Third Circuit did a precise analysis that landed at the proper conclusion. However, the analysis does start up with a bit of a hiccup. Since we are talking about PMA-preemption, we are dealing with express preemption. Yet, in a footnote the court refused to follow the Supreme Court’s recent abolition of the presumption against preemption in the express preemption context set forth in Puerto Rico v. Franklin Cal. Tax-Free Tr., 136 S.Ct. 1938 (2016), because that decision wasn’t a products liability case and therefore did not directly concern the “historic police powers of the States.” Shuker, at *16n.9. We respectfully disagree with this conclusion for all the reasons we mention in our post discussing Franklin and simply point out that other courts have reached the opposite conclusion. Accord Watson v. Air Methods Corp., 870 F.3d 812, 817 (8th Cir. 2017) (following Franklin and rejecting presumption against preemption in express preemption case); EagleMed LLC v. Cox, 868 F.3d 893, 903, (10th Cir. 2017) (same); Atay v. Cty. of Maui, 842 F.3d 688, 699 (9th Cir. 2016) (same); Conklin v. Medtronic, Inc., ___ P.3d ___, 2017 WL 4682107, at *2 (Ariz. App. Oct. 19, 2017) (under Franklin courts may not invoke a presumption against preemption in PMA preemption cases); Olmstead v. Bayer Corp., 2017 WL 3498696, at *3 n.2 (N.D.N.Y. Aug. 15, 2017) (plaintiff’s assertion of presumption against preemption in PMA preemption case held “frivolous” after Franklin).

Fortunately, that did not derail the Third Circuit from ultimately concluding that plaintiff’s negligence, strict liability, and breach of implied warranty claims were all preempted under Riegel. To do that, the court had to determine to what device it was applying the preemption analysis. Plaintiff argued that you have to look at the device that was implanted as a whole. Whereas defendant, bolstered by an amicus brief filed by the FDA at the court’s request, maintained that the proper focus is on the component of the device with which plaintiff takes issue. Shuker, at *18. Agreeing with the defense position, the court anchored its decision on three findings. First, the FDCA defines “device” to include “components, parts, and accessories.” Id. at *19. Second, the FDCA’s off-label provisions specifically acknowledge that a physician can and will use components separately from the system for which the FDA approved use. Id. at *20. And despite the use to which the component is put, the FDA’s PMA-regulations for the component follow with it. In other words, “premarket approval requirements apply equally to the components, as manufacturers generally may not deviate from the requirements imposed through premarket approval regardless of how [a component] is used.” Id. (citation and quotation marks omitted). Third, the FDA’s position is that the device is not limited to the device as a whole but includes components. Further, the FDA is charged with assuring the safety and effectiveness of components as well as finished devices. Id. at *21-22.


[t]aken together, the statutory definition of “device,” the treatment of off-label uses, and the guidance of the FDA all counsel in favor of scrutinizing hybrid systems at the component-level. . . .. And the Riegel test is properly framed at Step One as “whether the Federal Government has established requirements applicable” to a component of the hybrid system.

Id. at *22-23. Because the part of the device plaintiff attacked was the R3 metal liner which was premarket-approved, any state tort claim that seeks to impose requirements that are different from or in addition to the FDA’s requirements for that component are preempted. That includes plaintiff’s negligence, strict liability, and implied warranty claims.

The appellate court next reviewed the dismissal of plaintiff’s claims that survived preemption – negligence and fraud claims based on alleged off-label promotion in violation of federal law – and found the negligence claim was adequately pleaded but that plaintiff failed again to satisfy Rule 9’s heightened standard for pleading fraud. As to negligence, the court found TwIqbal satisfied as to duty, breach, causation where plaintiff alleged:

  • the R3 metal liner was approved only for use with a different system and therefore under federal law defendant had a duty to refrain from false or misleading advertising;
  • in a press release, defendant misleadingly marketed the R3 metal liner as an option for the system used by plaintiff’s surgeon (one other than the one it was approved for); and
  • plaintiff’s surgeon “either read” or “was aware” of the press release.

Id. at *28-29. Like the district court, the Third Circuit considered and relied upon the press release cited in plaintiff’s complaint. Unlike the district court, the Third Circuit appears to only focus on the portions of the press release upon which plaintiff relied (see prior post for more details) and concludes that’s enough to get plaintiff to the discovery stage. Id. at *29n.18. Although we wonder if the court’s calling plaintiff’s allegations enough to “nudge” the claim over the threshold is a veiled acknowledgement of just how narrowly the complaint squeaked by. See id. at *30.

Meanwhile, plaintiff’s fraud claim needed more than a nudge and it didn’t get even that. The court focused on plaintiff’s failure to plead justifiable reliance on the alleged misrepresentation. The “read” or “was aware” of allegation that sufficed for negligence lacked the requisite details regarding how the press release “induced or influenced” plaintiff’s surgeon for a fraud claim. Id. at *33-34. Plaintiff has to allege the “circumstances of the alleged [influence on Mr. Shuker’s surgeon] with sufficient particularity to place [defendant] on notice of the precise misconduct with which it is charged.” Id. at *34. Despite this having been plaintiff’s second failed attempt at meeting the pleading standard on fraud, the Third Circuit decided to give plaintiff another chance and found the claim should only be dismissed without prejudice.

Finally, there was a separate finding by the district court that it did not have personal jurisdiction over Smith & Nephew, PLC, a foreign parent company. The Third Circuit agreed with the district court that specific personal jurisdiction was not conferred on a stream-of-commerce theory. Id. at *36-37. We’ve talked about this before and more recently in light of BMS v. Superior Court, and like the Third Circuit “we have no cause to revisit” the precedent on the issue (but you should feel free to). But the court did think plaintiff alleged enough in his complaint to allow some limited jurisdictional discovery on possible alter ego based personal jurisdiction. Id. at *38-40. Emphasis on the limited part. See id. at *40n.20 (“District Court should take care to circumscribe the scope of discovery . . . to only the factual questions necessary to determine its jurisdiction;” further referencing proportionality amendment to Rule 26(b)(1)).

So, on the third pass plaintiff got a little life breathed back into this case which is unfortunate, but as the first appellate decision on component preemption – we’ll put it in the win column.

Today’s guest post is by friend of the blog Dick Dean, of Tucker Ellis.  He had an interesting idea the last time he posted about personal jurisdiction, and he’s following up with another one – this time rousing the previously dormant Commerce Clause.  As always, our guest posters are 100% responsible (all credit and any blame) for the contents of their posts.


Bexis and Kevin Hara recently posted a 50-state survey on consent by registration statues – specifically, analyzing which states have concluded that Daimler AG v. Bauman’s due process holdings “trump” such consent statutes.  See Dec 18, 2017 post.  But besides due process, there is another argument to attack such statutes- the Dormant Commerce Clause. In Re Syngenta AG MIR 162 Corn Litigation, MDL No. 2591, 2016 WL 2866166, (D. Kan. May 17, 2016) (invalidating Kansas registration statute based on the Dormant Commerce Clause); see also my prior guest post, “Corn, Justice Brandeis, Litigation Tourism and the Dormant Commerce Clause.” (July 5, 2016).

There is now a comprehensive article discussing these issues and, within that context, assessing whether registration statutes are constitutional under the Dormant Clause: J. Preis, “The Dormant Commerce Clause as a Limit on Personal Jurisdiction,” 102 Iowa L. Rev. 121 (Nov. 2016).  It is a must-read for those briefing the validity of consent statutes. The introduction  comments on the interplay between Due Process and the Dormant Commerce Clause:

After standing in the background for so long, it is high time for the Dormant Commerce Clause to step forward. In recent years, the Supreme Court has issued a spate of major personal jurisdiction decisions. These decisions have set off a wave of commentary in the legal academy, but the questions raised by these new cases are not simply academic. At present, jurists across the country are wrestling with a new and vexing issue of personal jurisdiction: whether a company’s registration to do business in a state amounts to consent to personal jurisdiction in that state. What no scholar or jurist has recognized, however, is that the Dormant Commerce Clause clarifies modern personal jurisdiction law in a way that the Due Process Clause, on its own, cannot.

Id. at 123-124

Briefly, the Dormant Commerce Clause provides that states may not interfere with commerce in other states.  This is the flip side of the constitutional provision which says the Congress has the power to regulate commerce between the states.  When it comes to general jurisdiction, out-of-state companies have an advantage over in-state companies – the ability to avoid suits unrelated to its activities in the State.  The article examines various scenarios of citizenship and states of injury and whether they pass muster under the Dormant Commerce Clause.  It concludes:

. . . [J]urisdiction-via-registration will be unconstitutional in suits brought by non-residents injured out of state.  In those cases, the local benefit is completely absent and the burden on interstate commerce will be “clearly excessive in relation to the putative local benefits.”  In cases where the plaintiff is a resident or was injured in the state, however, a local benefit exists and jurisdiction-via-registration will be constitutional.

Id. at 147.

Not only does the Dormant Commerce Clause present serious obstacles for registration statutes which impact general jurisdiction, but it may offer an argument to bar cases where specific jurisdiction has been found based on very tenuous “connections” between plaintiff’s injury and the forum state, such as the single-claim situation discussed in my (and Nick Janizeh’s) prior post.  If the Iowa Law Review article’s conclusion that the Dormant Commerce Clause bars claims by non-residents not injured in the state holds true, then that premise transcends issues of general or specific jurisdiction.  Put another way, even if there is general or specific jurisdiction over a defendant, there may still be a defense on the merits based on the Dormant Commerce Clause. The Dormant Commerce Clause is a separate concept from jurisdiction and must be evaluated separately. Comptroller of Treasury of Maryland v. Wynne, 135 S.Ct 1787, 1798-99 (2015).  And of course, that is the clear holding of In re Syngenta, which found a consent-by-registration statute passed due process muster but not Dormant Commerce Clause muster.  Thus, even though the Beck & Hara blog suggested that Kansas was a “murky” state on where it stood on the due process issue, it remains clear that consent-by-registration fails in Kansas because the federal court rejected the statute on Dormant Commerce Clause grounds. This is an important argument available in the continuing saga of litigation tourism.

[Editor’s note:  This dormant commerce clause argument could be particularly useful in Pennsylvania, not just because of the peculiar challenge of the Commonwealth’s registration statute, but also because of yesterday’s “let anybody sue” decision from the Pennsylvania Supreme Court allowing litigation tourists from anywhere to assert the Pennsylvania consumer protection statute against Pennsylvania companies no matter where the transaction occurred.]

We’ll be hitting all the Presidents’ Day sales today, but something tells me we’ll be disappointed because we won’t be able to buy, beg, borrow, or steal a new one.  So we keep trying.

With plaintiffs desperate to find some way to continue pursuing aggravated, aggregated product liability litigation in their favorite venues after Daimler AG v. Bauman, 134 S. Ct. 746 (2014) (“Bauman”), and Bristol-Myers Squibb Co. v. Superior Court, 137 S. Ct. 1773 (2017) (“BMS”), we thought we’d look at one likely target that we haven’t spent much time on before.  At the tail end of the BMS decision, the Court left open a caveat:

[W]e leave open the question whether the Fifth Amendment imposes the same restrictions on the exercise of personal jurisdiction by a federal court.  See Omni Capital International, Ltd. v. Rudolf Wolff & Co., 484 U.S. 97, 102, n.5 (1987).

BMS, 137 S. Ct. at 1784.  We have offered our opinion that we don’t think there will turn out to be a dime’s worth of practical difference between the two, due to the extent that BMS, a Fourteenth Amendment case relied on Walden v. Fiore, 134 S. Ct. 1115 (2014), which was as federal a cause of action as they come, being a constitutional Bivens action filed in federal court.  We still believe that’s right, but it’s a bit more complicated than we thought at first, a later on in this post.

Let’s start with what “federal court” means.  While we’ve always thought that cases in federal court based on diversity jurisdiction were on the Fourteenth Amendment side of the personal jurisdiction line, we’d never researched it.  It wasn’t hard.  Looking for cases with “diversity,” “Fourteenth Amendment,” and “personal jurisdiction” in the same paragraph was enough.  Too much, actually – since that search produced over two thousand cases – but it didn’t take long to get the answer.  From the first case:

The United States District Court for the Southern District of Florida, sitting in diversity, relied on [a state longarm statute] in exercising personal jurisdiction over a [non-]resident. . . .  The question presented is whether this exercise of long-arm jurisdiction offended “traditional conception[s] of fair play and substantial justice” embodied in the Due Process Clause of the Fourteenth Amendment.

Burger King Corp. v. Rudzewicz, 471 U.S. 462, 464 (1985).  Lots of other appellate cases stand for the proposition that cases in federal court on diversity jurisdiction are governed directly by the Fourteenth Amendment.  E.g., Cossart v. United Excel Corp., 804 F.3d 13, 18 (1st Cir. 2015); Philos Technologies, Inc. v. Philos & D, Inc., 802 F.3d 905, 912 (7th Cir. 2015); Creative Calling Solutions, Inc. v. LF Beauty Ltd., 799 F.3d 975, 979 (8th Cir. 2015); Carmouche v. Tamborlee Management, Inc., 789 F.3d 1201, 1203 (11th Cir. 2015); SFS Check, LLC v. First Bank, 774 F.3d 351, 355-56 (6th Cir. 2014); ClearOne Commications, Inc. v. Bowers, 643 F.3d 735, 763 (10th Cir. 2011); Metcalfe v. Renaissance Marine, Inc., 566 F.3d 324, 330 (3d Cir. 2009); Mullins v. TestAmerica, Inc., 564 F.3d 386, 398 (5th Cir. 2009); Bank Brussels Lambert v. Fiddler Gonzalez & Rodriguez, 305 F.3d 120, 124 (2d Cir. 2002); Chung v. NANA Development Corp., 783 F.2d 1124, 1125 (4th Cir. 1986); Steinberg v. International Criminal Police Org., 672 F.2d 927, 930 (D.C. Cir. 1981).

Thus, we think it’s a lock that for the types of cases we typically discuss on this blog, which sound in diversity if they’re in federal court, that Bauman/BMS applies to all personal jurisdiction issues.  Indeed, some of the cases we read indicate (like we think) that there is no difference between the Fifth and Fourteenth Amendments’ Due Process clauses when it comes to personal jurisdiction. See Republic of Panama v. BCCI Holdings (Luxembourg) S.A., 119 F.3d 935, 943 n.12 (11th Cir. 1997); Akro Corp. v. Luker, 45 F.3d 1541, 1545 (Fed. Cir. 1995).

This means that, to get around Bauman/BMS, and to assert personal jurisdiction against non-resident defendants, litigation-tourist plaintiffs would have to do the opposite of what they have normally done for decades and instead plead some sort of federal claim if they have any hope of arguing that some hypothetical lesser standard of Due Process applies under the Fifth Amendment.  Even assuming plaintiffs desperate enough to jettison decades of prior practice, there aren’t many of these statutes around.  The False Claims Act is a federal statute that authorizes nationwide service of process, see 31 U.S.C. §3732(a), but by no stretch of the imagination could it apply to the sorts of product liability/consumer fraud claims that are our opponent’s stock in trade.

RICO also provides for nationwide service of process. 18 U.S.C. §1965(d).  RICO has a major limitation – from the standpoint of a product liability plaintiff – in that the statute does not allow recovery of personal injury damages.  Reiter v. Sonotone Corp., 442 U.S. 330, 339 (1979); see, e.g., Safe Streets Alliance v. Hickenlooper, 859 F.3d 865, 886 (10th Cir. 2017); Blevins v. Aksut, 849 F.3d 1016, 1021 (11th Cir. 2017); Williams v. BASF Catalysts LLC, 765 F.3d 306, 323 (3d Cir. 2014); Fiala v. B & B Enterprises, 738 F.3d 847, 853 (7th Cir. 2013); Jackson v. Sedgwick Claims Management Services, Inc., 731 F.3d 556, 565 (6th Cir. 2013) (en banc); Ironworkers Local Union 68 v. AstraZeneca Pharmaceuticals, LP, 634 F.3d 1352, 1364 (11th Cir. 2011); Upper Deck Co., LLC v. Federal Insurance Co., 358 F.3d 608 (9th Cir. 2004); Hughes v. Tobacco Institute, Inc., 278 F.3d 417, 422 (5th Cir. 2001); Hamm v. Rhone-Poulenc Rorer Pharmaceuticals, Inc., 187 F.3d 941, 954 (8th Cir. 1999); Bast v. Cohen, Dunn & Sinclair, PC, 59 F.3d 492, 495 (4th Cir. 1995); Laborers Local 17 Health & Benefit Fund v. Philip Morris, Inc., 191 F.3d 229, 241 (2d Cir. 1999).  Even more of a drawback for purveyors of nationwide class actions, is the statute’s causation requirements almost always having precluded reliance on classwide statistical evidence, as we discussed here.

Another possibility would be the Magnuson-Moss Warranty Act, although MMWA also has a number of substantive drawbacks for plaintiffs, not the least of which is prescription medical products not being “consumer” goods.  Kanter v. Warner-Lambert Co., 122 Cal. Rptr.2d 72, 86 (Cal. App. 2002); MHA, LLC v. Siemens Healthcare Diagnostics, Inc., 2017 WL 838797, at *2 (D.N.J. March 2, 2017); In re Minnesota Breast Implant Litigation, 36 F. Supp.2d 863, 876 (D. Minn. 1998); Goldsmith v. Mentor Corp., 913 F. Supp. 56, 63 (D.N.H. 1995); Kemp v. Pfizer, Inc., 835 F. Supp. 1015, 1024 (E.D. Mich. 1993).

In this regard, however, the citation BMS gives to the Omni Capital case is particularly ominous for MMWA plaintiffs.  Omni Capital was a federal question case, alleging violations of several federal securities statutes.  498 U.S. at 99.  The Court held that, even if the Fifth Amendment Due Process Clause did allow Congress to expand personal jurisdiction with a statute providing for nationwide service of process (the footnote cited in BMS was itself a caveat that the Court had “no occasion to consider the constitutional issues raised by this theory”), no jurisdiction existed because Congress had not in fact done so.  “[U]nder Rule 4(e), a federal court normally looks either to a federal statute or to the long-arm statute of the State in which it sits” to determine personal jurisdiction.  Id. at 105.  An “implied” cause of action did not include implied nationwide service of process.  “[W]e would not automatically graft nationwide service onto the implied private right of action.”  484 U.S. at 107.  Nor would the Court in Omni Capital go beyond the limits to service of process expressly provided in Rule 4:

We would consider it unwise for a court to make its own rule authorizing service of summons.  It seems likely that Congress has been acting on the assumption that federal courts cannot add to the scope of service of summons Congress has authorized.  This Court in the past repeatedly has stated that a legislative grant of authority is necessary. . . .

The strength of this longstanding assumption, and the network of statutory enactments and judicial decisions tied to it, argue strongly against devising common-law service of process provisions at this late date for at least two reasons.  First, since Congress concededly has the power to limit service of process, circumspection is called for in going beyond what Congress has authorized.  Second, as statutes and rules have always provided the measures for service, courts are inappropriate forums for deciding whether to extend them.  Legislative rulemaking better ensures proper consideration of a service rule’s ramifications within the pre-existing structure and is more likely to lead to consistent application.

Id. at 109-10 (citations and footnotes omitted).

Thus, unlike the FCA or RICO, MMWA falls into the same category as the securities statutes in Omni Capital – it contains no provision for expanded service of process of any sort.  Alisoglu v. Central States Thermo King of Oklahoma, Inc., 2012 WL 1666426, at *3-4 (E.D. Mich. May 11, 2012); Bluewater Trading LLC v. Fountaine Pajot, S.A., 2008 WL 2705432, at *2-3 (S.D. Fla. July 9, 2008), aff’d, 335 F. Appx. 905, (11th Cir. 2009); Weinstein v. Todd Marine Enterprises, Inc., 115 F. Supp. 2d 668, 671 (E.D. Va. 2000); see Walsh v. Ford Motor Co., 807 F.2d 1000, 1012, 1018-19 (D.C. Cir. 1986) (reversing decision that “veered off course” by “regard[ing] Magnuson-Moss as an Act intended to facilitate nationwide class actions”).  What that means for Magnuson-Moss plaintiffs is:

The end result of Omni is to require a court to apply in federal question cases such as this case where there is no provision authorizing nationwide service of process a personal jurisdiction test very similar to that used in diversity cases:  Where a federal court’s subject matter jurisdiction over a case stems from the existence of a federal question, personal jurisdiction over a defendant exists if the defendant is amenable to service of process under the forum state’s long-arm statute and if the exercise of personal jurisdiction would not deny the defendant due process.

Alisoglu, 2012 WL 1666426, at *4 (citations and quotation marks omitted) (emphasis added).

While the current version of Rule 4 was amended to address the specific situation presented in Omni Capital – an overseas defendant ostensibly not amenable to service of process in any state (see Rule 4(k)(2)) – plaintiffs who sue defendants (like our clients) that are amenable to suit in some states are subject to state-law limitations on service of process unless a federal statute expressly allows otherwise:

(k) Territorial Limits of Effective Service.

(1) In General. Serving a summons or filing a waiver of service establishes personal jurisdiction over a defendant:

(A) who is subject to the jurisdiction of a court of general jurisdiction in the state where the district court is located;

(B) [special rules for third party practice − not relevant to personal injury plaintiffs – and indispensable parties – ditto]; or

(C) when authorized by a federal statute.

(Emphasis added).

Thus, under both controlling precedent and the language of Rule 4, our opponents should not be able to utilize federal causes of action to evade Bauman/BMS – unless they can plead into some statute (like the FCA or RICO) that provides nationwide service of process – and those other statutes have attributes that preclude their use in product liability.  Getting back to Walden v. Fiore, this interplay between personal jurisdiction and Rule 4 is what ultimately led to the application of Fourteenth Amendment personal jurisdiction principles in what was a federal question case.  Bivens is an implied right of action (similar to Omni Capital in that respect), thus no statutory expansion of personal jurisdiction was available, and a state long-arm statute subject to the Fourteenth Amendment was the only other option for the plaintiff, even with a federal cause of action involved:

Federal courts ordinarily follow state law in determining the bounds of their jurisdiction over persons.  This is because a federal district court’s authority to assert personal jurisdiction in most cases is linked to service of process on a defendant “who is subject to the jurisdiction of a court of general jurisdiction in the state where the district court is located.”  Fed. Rule of Civ. Proc. 4(k)(1)(A).  Here, Nevada has authorized its courts to exercise jurisdiction over persons “on any basis not inconsistent with … the Constitution of the United States.”  Thus, in order to determine whether the Federal District Court in this case was authorized to exercise jurisdiction over petitioner, we ask whether the exercise of jurisdiction comports with the limits imposed by federal due process on the State of Nevada.

Walden, 134 S. Ct. at 1121 (citations and quotation marks to Bauman omitted).  Walden is Supreme Court precedent demonstrating that Rule 4(k)(1)(A) imports the Fourteenth Amendment’s – and thus Bauman/BMS – Due Process analysis into federal causes of action unless a federal statute expressly provides otherwise.  Thus, plaintiffs can’t get away from Bauman/BMS even by raising federal statutory causes of action like MMWA that don’t authorize nationwide service of process.

Finally, even if plaintiffs somehow grab the BMS-caveat brass ring, and find some federal statute that provides for expanded service (and thus expanded personal jurisdiction), they would run squarely into the principle discussed in Dick Dean’s prescient guest post of a few weeks back – “[j]ust because there is specific jurisdiction over one claim . . ., that is insufficient to find specific jurisdiction over all claims.”  This guest post cites the relevant cases holding that personal jurisdiction must be determined on a claim-by-claim basis, so we won’t repeat them here.

We’ll add only that this claim-by-claim precedent is incompatible with any novel expansion of “pendent jurisdiction” (which has been a subject matter jurisdiction concept) to allow courts to hear otherwise Bauman/BMS-barred claims because one claim somehow squeaks through.  Recent cases rejecting “pendent jurisdiction” as an end run around Bauman/BMS include:  Lexington Insurance Co. v. Zurich Insurance (Taiwan) Ltd., ___ F. Supp.3d ___, 2017 WL 6550480, at *3 (W.D. Wis. Dec. 21, 2017); Greene v. Mizuho Bank, Ltd., ___ F. Supp.3d ___, 2017 WL 7410565, at *4-5 (N.D. Ill. Dec. 11, 2017); Spratley v. FCA US LLC, 2017 WL 4023348, at *7 (N.D.N.Y. Sept. 12, 2017); Famular v. Whirlpool Corp., 2017 WL 2470844, at *6 (S.D.N.Y. June 7, 2017); MG Design Associates, Corp. v. Costar Realty Information, Inc., 224 F. Supp.3d 621, 629 (N.D. Ill. 2016), partially reconsidered on other grounds, 267 F. Supp.3d 1000 (N.D. Ill. 2017); In re Testosterone Replacement Therapy Products Liability Litigation, 164 F. Supp.3d 1040, 1048-49 (N.D. Ill. 2016); In re: Bard IVC, 2016 WL 6393596, at *4 n.4 (D. Ariz. Oct. 28, 2016); In re: Zofran (Ondansetron) Products Liability Litigation, 2016 WL 2349105, at *5 n.5 (D. Mass. May 4, 2016); Demaria v. Nissan, Inc., 2016 WL 374145, at *7-8 (N.D. Ill. Feb. 1, 2016); Tulsa Cancer Institute, PLLC v. Genentech Inc., 2016 WL 141859, at *4 (N.D. Okla. Jan. 12, 2016); Hill v. Eli Lilly & Co., 2015 WL 5714647, at *7 (S.D. Ind. Sept. 29, 2015); In re Plavix Related Cases, 2014 WL 3928240, at *9 (Ill. Cir. Aug. 11, 2014).

Notably, most of these rejections of pendent jurisdiction come in the context of unsuccessful attempts to maintain nationwide class actions after Bauman/BMS.  The jurisdictional noose is tightening around litigation tourists.  It is important that they not  be given any wiggle-room by virtue of the “federal court” caveat in BMS.

Disclaimer:  Any resemblance between the substance of this post and that of a certain recent, wrongly-decided case out of the Northern District of California is purely intentional.

With one glance at the calendar, regular readers of this blog will have been able to predict the content of these prefatory paragraphs, later to be (tenuously) tied to today’s case. On Monday and Tuesday, as we have for nearly twenty years, we attended the annual Westminster Kennel Club Dog Show, the second-oldest continuous sporting event in the United States (behind only the Kentucky Derby) in Manhattan.  The show draws the best representatives of almost 200 dog breeds, including two breeds eligible to compete this year for the first time: the Nederlandse Kooikerhondje and the Grand Basset Griffon Vendeen.  About 3,000 total entrants are narrowed, during daytime breed judging, to one “best of breed” winner from each breed, then (during the familiar nighttime televised portions) to seven group winners.

The climactic event is the selection of the best-in-show winner from the seven group winners.   (BTW, if you haven’t seen the movie Best in Show, we think it is one of the funniest movies ever made, and, like all good humor, it skates very close to a lot of truths.)  This year, unlike some years, none of the “breeds of our heart” was represented in the final seven, so we watched with excited anticipation but without a favorite.  Not so the sellout crowd.  A pug named Biggie, with a sad human interest backstory (google it), got roars, as did Flynn the Bichon Frise and the Giant Schnauzer that was the top-winning show dog in the country for 2017.  But the crowd favorite was a Sussex Spaniel (a cheerful-looking, low-slung, long-eared spaniel breed with a shiny golden-liver coat) named Bean.  Every time Bean got close to the “bait” – the treats his handler was carrying – he sat up on his haunches and begged.  Needless to say, the crowd swooned.  And we admit that this was insanely cute.  But Bean took it too far, doing his trick right under the judge’s nose, including when was supposed to “free stack” (get himself into a stretched, square stance without his handler placing his feet in the proper positions).

Ultimately, the beautiful little Bichon was Best in Show, and Bean’s begging was for naught, kind of like today’s case (we warned you), a terrific jurisdictional decision out of the consolidated Xarelto litigation in the Superior Court of Los Angeles County, California. In In re Xarelto Cases, 2018 WL 809633 (Cal. Super. Feb, 6, 2018), the plaintiffs sued several manufacturers and a distributor, claiming various injuries and alleging the usual litany of causes of action.  Appearing specially, the (non-resident) manufacturer defendants moved to quash service of the plaintiffs’ summons, arguing that California courts lacked jurisdiction over them.  In response, the plaintiffs served jurisdictional interrogatories and requests for production comprising 113 separate discovery requests, seeking information about marketing and clinical trials allegedly performed by the non-resident defendants in California, including free sample voucher programs, as well as information about the functions the resident distributor defendant performed for the non-resident manufacturers.  The defendants moved for a protective order, alleging that none of the pending jurisdictional discovery was permitted under the United States Supreme Court’s three recent jurisdiction decisions (Bauman, BMS, and BNSF Railway Co. v. Tyrrell, 127 S.Ct. 1549 (2017)), and the plaintiffs countered with a motion to compel responses to the outstanding discovery requests.

The court explained it weighed three factors in deciding whether to permit the jurisdictional discovery: 1) the nature of the jurisdictional facts the plaintiffs sought to discover; 2) whether sufficient methods of investigation were available to the plaintiffs without formal discovery; and 3) the likelihood that the plaintiff could establish the necessary facts. Xarelto, 2018 WL 809633 at *10.  It concluded, “. . . [T]he Court has weighed these factors, and finds that Plaintiff has not made a prima facie case for personal jurisdiction in order to conduct the requested jurisdictional discovery.” Id. (citation omitted).

First, under Bauman, because none of the manufacturer defendants was incorporated or had its principal place of business in California, the courts lacked general jurisdiction.  Second, with respect to specific jurisdiction, noting that the (non-resident) plaintiffs were allegedly injured in their home states, the court held that, under BMS, neither the fact that clinical trials were performed in California nor the fact that the manufacturers hired a resident distributor was sufficient to establish that the plaintiffs’ claims “arose out of” the defendants’ contacts with California.  As such, the court found, “the proposed discovery seeks information on, at best, merely tenuous contact between the Defendants and California.” Id. The court concluded, “Consistent with BMS . . . , the requested discovery will not likely lead to the production of facts establishing jurisdiction over the defendant, based on the allegations of the complaint.  Under these circumstances, the Defendants’ requested protective order is appropriate.” Id. at *11.  That’s right — not a single one of the 113 discovery requests was allowed.

We love this decision. Its correct application of the Supreme Court’s mandates underscores the demise of litigation tourism and emphasizes the futility of plaintiffs’ pervasive and reprehensible joinder of distributors in quest of jurisdiction.  We hope other courts follow suit.  And we’ll keep you posted.

The pushback by Plaintiffs’ lawyers against the Supreme Court’s BMS decision continues, and it continues to largely fail.

The lawsuit in Dyson v. Bayer Corp., 2018 WL 534375 (E.D. Mo. Jan. 24, 2018), began in state court in St. Louis, a favorite destination of plaintiffs’ lawyers. The complaint made product liability claims about Bayer’s implantable birth-control device, Essure, and named 95 individual plaintiffs. Only 3 of those individuals lived in Missouri. The other 92 lived in other states, including states that could destroy complete diversity and prevent removal of the case to federal court. But defendants removed the case to federal court anyway, arguing that Missouri courts could not exercise personal jurisdiction over the claims of those 92 plaintiffs, who were not only non-residents but who also did not receive their Essure implants in Missouri. Plaintiffs responded by filing a motion to remand the case to state court or, in the alternative, to conduct fact discovery on the existence of personal jurisdiction. Id. at *1-2. And, with that, the latest challenge to the breadth of the BMS decision was teed up.

The plaintiffs’ lawyers’ theory as to why Missouri courts could exercise personal jurisdiction over the claims of these 92 plaintiffs was based on an observation made by the Supreme Court in BMS: “BMS did not develop, create a marketing strategy for, manufacture, label, package, or work on the regulatory approval for Plavix in [the forum state of California.]” Id. at 4 (quoting Bristol-Myers Squibb Co. v. Super. Ct. of Cal., 137 S. Ct. 1773, 1778 (2017). So the complaint in Dyson alleged, in some detail, that the defendants conducted clinical trials for the regulatory approval of Essure in Missouri and started their marketing campaign for Essure in Missouri. As the Dyson court put it, plaintiffs claimed that these allegations, in the least, made a prima facie case for personal jurisdiction:

Plaintiffs seize upon that [BMS] language and suggest the Supreme Court offered those factors as a blueprint for establishing personal jurisdiction. Plaintiffs thus believe they have solved their personal jurisdiction problems because they allege that the defendants worked on regulatory approval for Essure in Missouri and also worked on the Essure marketing campaign in Missouri. Plaintiffs argue that they have at least made a prima facie case for personal jurisdiction and that they should be able to conduct jurisdictional discovery to prove the plaintiffs’ claims’ connections to Missouri.

Id. at 4.

The Dyson court started its analysis by first addressing personal jurisdiction. This was a significant choice. If the court had instead addressed subject matter jurisdiction, it could have (blindly) declared a lack of complete diversity and remanded the case to state court. But it, properly, started with personal jurisdiction because, as the court put it, the personal jurisdiction inquiry was straight-forward. The deficiencies of the allegations under BMS were just too significant:

This Court agrees that, despite these new allegations made by plaintiffs, personal jurisdiction remains the more straightforward inquiry. To address subject matter jurisdiction at this juncture would involve deciding whether non-Missouri plaintiffs had been fraudulently joined or misjoined, which is a notoriously complex issue. As shown below, the personal jurisdiction inquiry is a much simpler matter. Further, because plaintiffs do not make a prima facie showing for personal jurisdiction, the motion for jurisdictional discovery (#24) will be denied.

Id. at *3 (citations omitted).

Having decided that personal jurisdiction was a threshold issue, the court addressed plaintiffs’ claim that defendants started their Essure marketing campaign in Missouri. The court waded through the details of plaintiffs’ marketing allegations and found that they did not establish a sufficient connection to claims of plaintiffs who did not live in Missouri, were not prescribed and did not purchase the Essure device in Missouri, were not injured in Missouri, and did not see or rely on marketing in Missouri:

With respect to plaintiffs’ arguments that personal jurisdiction may be supported by the alleged Missouri marketing campaign genesis, those arguments are contrary to BMS. In fact, the BMS plaintiffs themselves alleged that BMS marketed, advertised, and actively sought to promote Plavix in California specifically. Id. at 1779, 1783. Plaintiffs here go a step farther, saying defendants used Missouri as “ground zero” for its national campaign — that is, St. Louis was the first city to commercially offer the Essure procedure and was one of eight “test marketing” campaign sites. (Petition ¶ 165.) Plaintiffs also state that defendants cite to data from the Missouri clinical trials on Essure’s labels and in marketing materials distributed to plaintiffs and their physicians. (Id.) Plaintiffs add that defendants’ success with Essure in St. Louis allowed defendants to achieve profitability and launch a nationwide advertising campaign. (Id.) However, the non-Missouri plaintiffs do not allege they viewed Essure advertising in Missouri. That Missouri happened to be Essure’s first marketed area has no bearing on the non-Missouri plaintiffs’ claims where those plaintiffs did not see marketing in Missouri, were not prescribed Essure in Missouri, did not purchase Essure in Missouri, and were not injured by Essure in Missouri. Thus the allegations still do not suffice to provide the necessary “connection between the forum and the specific claims at issue.BMS, 137 S. Ct. at 1781.

Id. at *4.

The court next considered—and rejected—plaintiffs’ argument that the court had personal jurisdiction over the non-resident claims because defendants sponsored clinical trials in Missouri as part of their effort to secure regulatory approval of Essure. The court, once again, found this to be an inadequate link to establish personal jurisdiction:

As for plaintiffs’ allegations about the clinical trials having occurred in Missouri, plaintiffs argue that such activities play directly into BMS’s invitation to prove personal jurisdiction by showing the defendant “work[ed] on the regulatory approval of the product” in Missouri. Id. at 1778. But the Missouri clinical trials — the existence of which defendants readily admit — are simply too attenuated to serve as a basis for specific personal jurisdiction for defendants. Indeed, the trials would serve more properly as evidence of general personal jurisdiction. The non-Missouri plaintiffs do not allege they participated in a Missouri clinical study or that they reviewed and relied on Missouri clinical studies in deciding to use Essure. Plaintiffs also seem to suggest that specific jurisdiction exists because Essure could not have been approved without clinical trials, and some of those clinical trials occurred in Missouri. But again, this does not serve as an “adequate link” between Missouri and nonresidents’ claims that their individual device injured them in another state. See id. at 1781.

Id. at *5. With that, the court dismissed the claims of all 92 non-Missouri residents and retained jurisdiction over the claims of the remaining 3 plaintiffs.

While this was an excellent opinion, its importance may be greater than the ordinary opinion rejecting efforts to stretch personal jurisdiction under BMS. The District Court Judge was Stephen Limbaugh. He is a former Chief Justice of the Missouri Supreme Court and, as we understand it, well respected. This suggests that the current members of the Missouri Supreme Court will give his opinion a close read. Given how many product liability cases are filed in Missouri, that has to be a good thing.

Speed. Some things move faster than others.  When we viewed last August’s solar eclipse, in Tennessee, the Moon’s shadow was moving along the Earth at a rate of about 1,450 miles per hour.  Depending mostly on latitude, your speed may be greater or less.  Indeed, totality was sufficiently exhilarating that we wondered when the would the next eclipse occur in Philadelphia.  These days, one can find practically any information on the Internet, and eclipse locations was no exception.  We found this page and simply typed in a date range, the type of eclipse we were interested in (total), and the decimalized GPS coordinates for Philadelphia (39.94 and -75.10).  Unfortunately, a reasonable date range (± 100 years) showed nothing.  So we used the maximum range available – the entire 5000 years between 1999 BCE and 3000 CE.  That produced 14 Philadelphia total eclipses, but again unfortunately, the last one took place fourteen years before Columbus’ first voyage.  Even more unfortunately, totality will not be visiting Philadelphia until October 26, 2144.  It’s a cool site, since the same page looks like it would work for anywhere in the world.  But for us in Philly, that means we have to keep going to totality; totality isn’t coming to us anytime soon.

Anyway, getting back to speed.  Some legal issues are evolving at breakneck speed right now.  A little over two months ago (11/20/2017) we published a post entitled, “BMS & Nationwide Class Actions” about – you guessed it the probable impact that the personal jurisdiction rulings in Bristol-Myers Squibb Co. v. Superior Court, 137 S. Ct. 1773 (2017) (“BMS”), and Daimler AG v. Bauman, 134 S. Ct. 746 (2014) (“Bauman”), on attempts to bring multi-state class actions in fora other than where the targeted defendant was “at home” and therefore subject to general personal jurisdiction under Bauman.

That post discussed not quite a dozen cases, all decided since Bauman in 2014: McDonnell v. Nature’s Way Products, LLC, 2017 WL 4864910 (N.D. Ill. Oct. 26, 2017); Fitzhenry-Russell v. Dr. Pepper Snapple Group, Inc., 2017 WL 4224723 (N.D. Cal. Sept. 22, 2017); In re Dental Supplies Antitrust Litigation, 2017 WL 4217115 (S.D.N.Y. Sept. 20, 2017); Spratley v. FCA US LLC, 2017 WL 4023348 (N.D.N.Y. Sept. 12, 2017); Plumbers’ Local Union No. 690 Health Plan v. Apotex Corp., 2017 WL 3129147 (E.D. Pa. July 24, 2017); Famular v. Whirlpool Corp., 2017 WL 2470844 (S.D.N.Y. June 7, 2017); Demedicis v. CVS Health Corp., 2017 WL 569157 (N.D. Ill. Feb. 13, 2017); Bauer v. Nortek Global HVAC LLC, 2016 WL 5724232 (M.D. Tenn. Sept. 30, 2016); Kincaid v. Synchrony Financial, 2016 WL 4245533 (N.D. Ill. Aug. 11, 2016); Matus v. Premium Nutraceuticals, LLC, 2016 WL 3078745 (C.D. Cal. May 31, 2016); Demaria v. Nissan N.A., Inc., 2016 WL 374145 (N.D. Ill. Feb. 1, 2016).  Of the eleven only one, Fitzhenry-Russell, allowed a nationwide class action to survive a post-BMS/Bauman personal jurisdiction challenge.

Well, the pace is picking up.  In little over two months, three more cases have been decided, addressing the issue whether class actions defined to include forum non-residents can be brought against non-resident defendants after BMS: DeBernardis v. NBTY, Inc., 2018 WL 461228 (N.D. Ill. Jan. 18, 2018); LDGP, LLC v. Cynosure, Inc., 2018 WL 439122 (N.D. Ill. Jan. 16, 2018); and In re Chinese-Manufactured Drywall Products Liability Litigation, 2017 WL 5971622 (E.D. La. Nov. 30, 2017).  We’ll address these new cases today.

The most recent decision, DeBernardis, involved a putative nationwide class action under a consumer protection statute.  The defendants moved to dismiss, inter alia, “claim[ing] that this Court does not have jurisdiction to hear the case involving non-resident class of plaintiffs” under BMS.  The court agreed.  The plaintiffs relied on the Fitzhenry-Russell decision we critiqued in our prior post, and the Chinese Drywall decision we’ll be examining below, to claim that personal jurisdiction in class actions was somehow exempt from the Due Process limits recognized in BMS.  2018 WL 461228, at *2.  The court in DeBernardis, however, found the reasoning in McDonnell and other decisions from the Northern District of Illinois more persuasive.  Id.  Although calling it a “close question,” the court in DeBernardis refused to distinguish class actions from mass torts for due process purposes.  It did not believe that the Supreme Court would do so:

The Court believes that it is more likely than not based on the Supreme Court’s comments about federalism that the courts will apply BMS to outlaw nationwide class actions in a form, such as in this case, where there is no general jurisdiction over the Defendants.  There is also the issue of forum shopping, which was mentioned in the Chinese DryWall case as a basis for distinguishing mass torts from class actions, but possible forum shopping is just as present in multi-state class actions.

DeBernardis, at 2018 WL 461228, at *2.  Consequently, those portions of the class action that sought to represent “out-of-state plaintiff classes” was dismissed.  Id.

The LDGP decision reached a similar result, but was somewhat less emphatic in its holdings.  Class action plaintiffs in LDGP sought to add new representative plaintiffs, including non-residents, who would serve as representatives of non-resident classes.  2018 WL 439122, at *1 n.1.  Since the amendment would create a situation of non-resident plaintiffs suing non-resident defendants, the defense opposed on BMS jurisdictional grounds.  LDGP held that, since the suit asserted state-law claims under diversity of citizenship, there was no occasion to consider the caveat (137 S. Ct. at 1784) in BMS concerning the Fifth Amendment and federal causes of action.  Id. at *2 n.2 (“the court is exercising diversity jurisdiction and looking to Illinois law”).  Plaintiffs’ other argument, “that because the claims of at least one plaintiff . . . arose out of events taking place in [the forum], defendant is also subject to personal jurisdiction for similar claims brought by other plaintiffs that have no other connection to [the forum],” id. at 3, ran straight into the BMS buzzsaw:

Plaintiffs’ arguments are unconvincing.  Though the nonresidents’ claims are similar to those of resident plaintiffs, the difference that plaintiffs point out is fundamental: the events that lead to the nonresidents’ claims took place outside of [the forum].  The number of would-be nonresident plaintiffs has no bearing on whether those plaintiffs’ claims arise from or relate to the defendant’s activity in the forum.  [quotations from BMS omitted]  Consequently, this court does not have personal jurisdiction over defendant with regard to the claims brought against it by the nonresident plaintiffs.


As already indicated, the Chinese Drywall decision goes the other way.  The defendants against whom a nationwide class action was asserted were not sympathetic – they had defaulted, thumbed their collective noses at the court, and were essentially daring the plaintiffs to try to come after them in China.  2017 WL 5971622, at *4.  The plaintiffs wanted the biggest cudgel they could get – a money judgment on behalf of a nationwide class action − and only weeks before BMS was decided, the MDL court had given it to them.  Id. at *5.  It was not inclined to let BMS take it away, so Chinese Drywall, held:

BMS would not affect the jurisdictional holding in the present case.  BMS was not a class action; it was a “mass tort action” in state court.  This factor materially distinguishes this action from [BMS] because in class actions, the citizenship of the unnamed plaintiffs is not taken into account for personal jurisdiction purposes.

2017 WL 5971622, at *12 (citations and quotation marks omitted).  For this proposition, the decision cited the Fitzhenry-Russell decision discussed in our prior post, and the same two cases that Fitzhenry-Russell had relied upon, AM Trust v. UBS AG, 78 F. Supp.3d 977, 986 (N.D. Cal. 2015), aff’d on other grounds, 681 Fed. Appx. 587 (9th Cir. 2017)); and Senne v. Kansas City Royals Baseball Corp., 105 F. Supp. 3d 981, 1022 (N.D. Cal. 2015).

Just as they were inadequate in Fitzhenry-Russell, these two district court citations, simply don’t suffice to limit a subsequent Supreme Court decision based on Due Process principles.  AM Trust involved the reverse situation – an attempt to assert the residence of class members in favor of personal jurisdiction.  78 F. Supp. at 986. AM Trust dismissed for lack of personal jurisdiction, which hardly supports the massive extension of personal jurisdiction to a nationwide class that Chinese Drywall permitted.  Moreover, the only support AM Trust cited for the proposition, Ambriz v. Coca Cola Co., 2014 WL 296159 at *46 (N.D. Cal. Jan. 27, 2014), was a venue, not a jurisdiction, case.  The same thing is true of Senne:  the court granted a motion to dismiss for lack of personal jurisdiction and relied solely on AM Trust.  105 F. Supp. at 1022.

In short, Chinese Drywall, like Fitzhenry-Russell, could not find any precedent that actually allowed personal jurisdiction based on totally ignoring the “citizenship of the unnamed plaintiffs” in whose favor judgment would eventually be entered.  Ignoring the non-resident class members seems like an extremely slender reed for holding that a brand-new 8-1 United States Supreme Court “straightforward application . . . of settled principles of personal jurisdiction,” BMS, 137 S. Ct. at 1783, does not apply to class actions.

Conscious of its weak precedential basis, Chinese Drywall, 2017 WL 5971622, at *14 (“This Court is cognizant of the superficial similarities between mass tort actions (like in BMS) and a class action”), the opinion seeks to buttress its jurisdiction-expanding result in several ways.  Id. at *14-21.

First – class actions and mass torts are different, the chief basis being that “a class action has different due process safeguards” arising from Fed. R. Civ. P. 23.  Id. at *14 (citing “numerosity, commonality, typicality, adequacy of representation, predominance and superiority”).  Sorry, but those Rule 23 requirements are almost solely to protect the absent plaintiffs’ Due Process rights.  Personal jurisdiction is different.  As BMS concisely put it, “the primary concern is the burden on the defendant.”  137 S. Ct. at 1780.  It is a fallacy to justify denigration of a class action defendant’s Due Process rights by citing Due Process protections intended to protect plaintiffs.  Unfortunately, in MDLs and class actions, it still seems to be a radical proposition that defendants have Due Process rights, too.

Second – “fairness” is “the fundamental purpose of due process.” Chinese Drywall, 2017 WL 5971622, at *15.  In a word, no – not in personal jurisdiction.  Once again, BMS answers this question:

[R]estrictions on personal jurisdiction are more than a guarantee of immunity from inconvenient or distant litigation. They are a consequence of territorial limitations on the power of the respective States. . . .  The sovereignty of each State implies a limitation on the sovereignty of all its sister States. . . .  [E]ven if the defendant would suffer minimal or no inconvenience from being forced to litigate before the tribunals of another State; even if the forum State has a strong interest in applying its law to the controversy; even if the forum State is the most convenient location for litigation, the Due Process Clause, acting as an instrument of interstate federalism, may sometimes act to divest the State of its power to render a valid judgment.

137 S. Ct. 1780-81 (numerous citations and quotation marks omitted).  Fairness may play a role, but fundamentally Due Process restrictions on personal jurisdiction exist because the Constitution created a federal system of government.  Chinese Drywall involved plaintiffs from three states – Louisiana, Florida, and Virginia, 2017 WL 5971622, at *9-11 – and defendants from China.  There is simply no Due Process basis for adjudicating in Louisiana claims involving harm to persons in California, Texas, or New York.  BMS declared the era of that kind of big litigation to be over.

ThirdPhillips Petroleum Co. v. Shutts.  Like plaintiffs in BMS, Chinese Drywall invokes Shutts.  2017 WL 5971622, at *15-16.  Once again, BMS supplies the answer.  “Shutts, which concerned the due process rights of plaintiffs, has no bearing on the question presented here.”  137 S. Ct. at 1777 (citing Id. at 1783-84).  “[T]he [Shutts] Court stated specifically that its ‘discussion of personal jurisdiction [did not] address class actions where the jurisdiction is asserted against a defendant class.’”  Id. at 1783 (quoting Shutts, 472 U.S. at 812 n.3.

Fourth – Congress, in creating Rule 23 (and secondarily Rule 4), permitted nationwide class actions.  2017 WL 5971622, at *17, *18.  Maybe Congress could, under the cited U.S. Const. art. III §2, but it hasn’t.  Rule 23 (and Rule 4) is not a statute, it is only a rule of civil procedure.  As we discussed at length in our prior post, rules of civil procedure are enacted under the Rules Enabling Act, which prohibits any federal rule, even Rule 23, from “abridg[ing], enlarg[ing] or modify[ing] any substantive right.”  28 U.S.C. §2072(b).  The mass creation of personal jurisdiction – personal jurisdiction that the Supreme Court just reiterated was unconstitutional under the Due Process Clause − where none otherwise exists, can only be substantive.  Look at the federal rules.  They don’t even impose pre- or post-judgment interest.  Why?  Because “[p]rejudgment interest in a diversity action is . . . a substantive matter governed by state law.”  In re Exxon Valdez, 484 F.3d 1098, 1101 (9th Cir. 2007).  The federal rules can’t even add interest to a judgment.  They certainly cannot create the personal jurisdiction needed to enter the judgment itself.

Fifth −  The Multidistrict Litigation Act.  Chinese Drywall claims that 28 U.S.C. §1407 is “another example” of the “principle” that congressional action can create personal jurisdiction.  However, §1407 expressly addressed personal jurisdiction in only one provision.  An MDL judge “may exercise the powers of a district judge in any district for the purpose of conducting pretrial depositions in such coordinated or consolidated pretrial proceedings.”  §1407(b) (emphasis added).  Thus the only expansion of jurisdictional power that Congress chose to confer on MDL judges is explicitly limited to facilitating depositions.  The express terms of the MDL Act thus affirmatively refute the jurisdiction asserted in Chinese Drywall.  An MDL judge simply does not “ha[ve] the same pre-trial jurisdiction as the transferor courts where the cases were initially filed.”  2017 WL 5971622, at *20.  The statute confers no additional personal jurisdiction over anyone save with respect to depositions.  The statute “speaks not in terms of imbuing transferred [MDL] actions with some new and distinctive venue character.”  Lexecon Inc. v. Milberg Weiss Bershad Hynes & Lerach, 523 U.S. 26, 37 (1998); cf. Gelboim v. Bank of America Corp., 135 S. Ct. 897, 904 (2015) (removing “venue” limitation from Lexecon quotation).

Sixth – The Class Action Fairness Act.  2017 WL 5971622, at *18.  CAFA expanded the scope of federal diversity jurisdiction.  It has nothing to do with personal jurisdiction.  CAFA did not purport to create nationwide personal jurisdiction over persons sued by classes subject to its provisions.  E.g., Burgess v. Religious Technology Center, Inc., 600 Fed. Appx. 657, 660-61 (11th Cir. 2015) (affirming dismissal of defendant in CAFA case for lack of personal jurisdiction).  Perhaps Congress could have expanded personal jurisdiction, too, or perhaps not.  Either way, nothing in CAFA purports to grant federal courts personal jurisdiction over non-resident defendants being sued by non-resident plaintiffs, as with the absent class members in Chinese Drywall.

Seventh – Settlement classes.  Chinese Drywall states, accurately, that “courts have often approved national classes in mass tort cases in the settlement context.”  2017 WL 5971622, at *18.  That fact is neither here nor there.  Settlement is consensual, and personal jurisdiction is waivable.  If a non-resident defendant is agreeable to a nationwide settlement, encompassing non-resident plaintiffs, and so are the plaintiffs, personal jurisdiction is not a stumbling block, not even after BMS.

Eighth − Lack of federalism concerns.  Relying primarily on the dissent in BMS, Chinese Drywall denies that these concerns exist in class actions.  2017 WL 5971622, at *19-20 (this case “involves Defendants that have made enough contacts to the forum states to hold them liable there in nationwide class actions”).  This final proposition stuffs the rabbit way down in the hat.  Yes, the defendants have sufficient jurisdictional contacts with the three “forum states” because each one has a resident plaintiff, also a class representative, claiming damages.  But if BMS means anything, it means that the existence of personal jurisdiction over claims by other resident plaintiffs (three transferred plaintiffs from three states) does not support personal jurisdiction over similar claims by non-residents (everybody from everywhere else):

The mere fact that other plaintiffs were prescribed, obtained, and ingested [the product] in [the forum state] − and allegedly sustained the same injuries as did the nonresidents − does not allow the State to assert specific jurisdiction over the nonresidents’ claims.

137 S. Ct. at 1781. This last rationale is, to us, the worst, because it simply tells the world that Supreme Court precedent be damned, these obnoxious defendants are going to get theirs.

Thus, right now the scorecard stands at 12-2 in favor of the proposition that BMS precludes nationwide class actions to the extent that they result in non-resident plaintiffs suing non-resident defendants.  While Chinese Drywall certainly threw against the drywall all the mud it could find, ultimately we don’t think anything sticks.  Fittingly, the critical passage – “an MDL transferee court . . . has personal jurisdiction over nonresident class members and has the power to . . . approve a nationwide class,” 2017 WL 5971622, at *14, has no citation at all.  Moreover, as the steady decisional drumbeat described in this and our prior post indicates, the issue of BMS and nationwide class actions under state law is surely headed for the appellate courts, and we expect the first decisions by the end of 2018.

We like our chances.

Our careers have seen several major pro-defense trends in product liability litigation:

Mainstreaming summary judgment:  This happened when we were still young lawyers.  A trilogy of United States Supreme Court cases established that summary judgment wasn’t an “extraordinary” or “disfavored” procedure, but rather part and parcel of modern litigation.  The lead case in the trilogy was Celotex Corp. v. Catrett, 477 U.S. 317 (1986).

Preemption and product liability:  We remember when our most powerful in product liability litigation was hardly available at all.  That changed beginning with Cipollone v. Liggett Group, Inc., 505 U.S. 504 (1992).

Limiting junk science:  The Supreme Court required the curbing of abusive expert opinions, based mostly on who was paying the supposed “expert,” and imposed a significant degree of scientific rigor on defect and causation opinions.  The lead case was Daubert v. Merrell Dow Pharmaceuticals, 509 U.S. 579 (1993).

Purging bogus class actions:  Class actions for personal injury used to be a real threat in product liability litigation.  They aren’t anymore, not since the door was closed by Amchem Products, Inc. v. Windsor, 521 U.S. 591 (1997), and Ortiz v. Fibreboard Corp., 527 U.S. 815 (1999).

Making pleadings matter:  Not so long ago, complaints were formalities that told us practically nothing about what actually happened, not even what the plaintiff thought happened.  That’s no longer the case (at least in most courts), thanks to Bell Atlantic Corp. v. Twombly, 550 U.S. 544 (2007), and Ashcroft v. Iqbal, 556 U.S. 662 (2009) (or “TwIqbal” – the term popularized by this blog).

With last term’s decision in Bristol-Myers Squibb Co. v. Superior Court, 137 S. Ct. 1773 (2017) (“BMS”), we think it’s now safe to add reducing litigation tourism to our megatrends list.  As we discussed at the time, Justice Alito’s opinion in BMS (joined by the entire Court, except Justice Sotomayor) meant that the crackdown on general personal jurisdiction epitomized by Daimler AG v. Bauman, 134 S. Ct. 746 (2014), could not be evaded by “loose and spurious” importation of extraneous forum contacts into the separate Due Process analysis for specific personal jurisdiction.  As explained in more detail in that post and others, specific personal jurisdiction is just that – specific, or “case-linked” – to the plaintiff, to the defendant, and the forum.  Indeed, the very idea of non-residents attempting to invoke specific jurisdiction is radical – it never happened before Bauman.

BMS reiterated that the purported jurisdictional contacts of other plaintiffs and other defendants don’t count in specific personal jurisdiction.  137 S. Ct. at 1781 (“The mere fact that other plaintiffs were prescribed, obtained, and ingested [the product] 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.”); 1783 (“[A] defendant’s relationship with a … third party, standing alone, is an insufficient basis for jurisdiction”) (quoting Walden v. Fiore, 134 S.Ct. 1115, 1123 (2014)).  But the Court, as is its practice, didn’t just say no.  Rather it held that the minimal record the plaintiffs had established in BMS (they had been content to rely on the penchant of California courts for adopting pro-plaintiff theories) didn’t meet the longstanding test for specific personal jurisdiction – “arising from or relating to” the litigation in question.

In BMS the defendant “did not develop [the product] in California, did not create a marketing strategy for [it] in California, and did not manufacture, label, package, or work on the regulatory approval of the product in California.”  137 S. Ct. at 1778.  “[T]he nonresident [plaintiff]s were not prescribed [the product] in California, did not purchase [it] in California, did not ingest [it] in California, and were not injured by [it] in California.  Id. at 1781.  Nor was there any claim that the defendant was “derivatively liable” for anyone else’s in-state conduct.  Id. at 1783.  “The bare fact that [the defendant] contracted with [an in-state] distributor is not enough to establish personal jurisdiction in the State.”  Id.

So that’s where we are in the ongoing process of restoring sanity to personal jurisdiction that the Supreme Court has undertaken. Except for a few pockets of “jurisdiction by consent” holdouts (see our post here) general personal jurisdiction is off the board except where a corporate defendant is “at home” – where it is incorporated or has its principal place of business.  The new battleground is whether, and to what extent, courts will allow non-residents to assert specific personal jurisdiction under the “arising from or relating to” test.  That’s what we’re looking at today

Thus, we know from BMS that “the suit must arise out of or relate to the defendant’s contacts with the forum.”  137 S. Ct. at 1780 (citation and quotation marks omitted) (emphasis original).  “[T]he primary [Due Process] concern is the burden on the defendant.”  Id. (citation and quotation marks omitted).  The required “affiliation between the forum and the underlying controversy” means that “an activity or an occurrence [must] take[] place in the forum State.”  Id. (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. (citation and quotation marks omitted).  In determining these questions, “the primary concern is “the burden on the defendant.  Id. (citation and quotation marks omitted).

[R]estrictions on personal jurisdiction . . . are a consequence of territorial limitations on the power of the respective States. . . .  The sovereignty of each State implies a limitation on the sovereignty of all its sister States.  And at times, this federalism interest may be decisive. . . .  Even if the defendant would suffer minimal or no inconvenience . . .; even if the forum State has a strong interest in applying its law to the controversy; even if the forum State is the most convenient location for litigation, the Due Process Clause, acting as an instrument of interstate federalism, may sometimes act to divest the State of its power to render a valid judgment.

Id. at 1780-81 (citations and quotation marks omitted)

In sum, existence of specific personal jurisdiction after BMS requires “a connection between the forum and the specific claims at issue.”  Id. at 1781.  Thus, BMS recognized two types of possible mass tort aggregation:  (1) plaintiffs from anywhere may bring “a consolidated action” in a state that has “general jurisdiction” under Bauman.  (2) Plaintiffs who are “residents of a particular state” can “probably sue together in their home states” (assuming that was also where they were injured, and maybe other things in specific cases).  Id. at 1783.  Although it did not draw the bright line our side would have liked, BMS did not recognize any instance where a non-resident could assert specific personal jurisdiction.

Finally, BMS pointed out that personal jurisdictional rules might be different where a federal court is asked to adjudicate a federal claim. Id. at 1784 (citing Omni Capital International, Ltd. v. Rudolf Wolff & Co., 484 U.S. 9 (1987)).  The Court’s page citation to Omni Capital, 484 U.S. at 103 n.5, explains that caveat, since that Omni Capital footnote had preserved a possibility that Congress could permit analysis of nationwide contacts by enacting a statute allowing nationwide service of process.  Id. That’s not something applicable to state-law product liability actions.

From the discussion in BMS we take away, first, the holding that a “defendant’s relationship with a third party, standing alone, is an insufficient basis” for jurisdiction.  A defendant’s contracting with a separate in-state entity, such as the distributor in BMS, is not a relevant specific personal jurisdiction contact.  There would have to be some basis, like alter ego or conspiracy, to impose a separate entity’s contacts on a defendant.

Second, BMS requires that the defendant’s jurisdictional contacts for specific jurisdiction must relate to a plaintiff’s “specific claims” – ruling out more general contacts that would be the same for every plaintiff in the litigation.  Thus, that the defendant has a manufacturing plant in a state that made the drug in question doesn’t matter if no manufacturing defect claim is alleged, nor should it matter unless the plaintiff can establish that the drug s/he ingested was actually made in that facility.  Ditto with testing.  An in-state activity related to overall FDA approval wouldn’t be “specific” to any plaintiff, and thus should not be not a relevant contact under BMS.  However, if a plaintiff were actually enrolled in a clinical trial (say plaintiff X, a Pennsylvania resident, crossed the river and participated in an New Jersey study), and was claiming injury from that participation, that contact would be “specific” to that plaintiff’s claims and thus relevant to a BMS specific personal jurisdiction analysis.

Beyond the BMS discussion of the “arising out of”/”relating to” specific personal jurisdiction test, we’re doing two things – first, we take another look at the aforementioned Walden case, because of the heavy reliance on Walden in BMS.  Second, we ran a search of all previous Supreme Court decision that used the words “arising” and “relating” (in any verb form) in the same sentence, and also mentioned “personal jurisdiction” anywhere in the opinion.  That search produced 13 prior Supreme Court cases, a manageable number.

Walden:  We already examined the Walden v. Fiore, 134 S. Ct. 1115 (2014), specific personal jurisdiction decision quite closely back in 2016, following the California Supreme Court’s now overturned ruling in BMS.  First we note that Walden involved federal constitutional claims (a so-called “Bivens” action), brought in federal court, id. at 1120, so the BMS Fifth/Fourteenth Amendment caveat doesn’t seem to matter in practice (and we won’t mention it further).  Plaintiff was a Nevada resident, asserting the specific jurisdiction of his home state, suing over a currency seizure by a Georgia police officer who acted in Georgia.  Id. at 1119-20.  As an in-state plaintiff, not only did he assert specific personal jurisdiction in the usual way, but a fortiori he had far more forum contacts than the litigation tourists who frequent drug/device mass torts.  However, as emphasized by BMS, the “primary concern” is with the defendant’s situation, so our focus in Walden is on what the Court had to say about the defendant’s contacts/conduct.

Walden held, as to a defendant, “the relationship must arise out of contacts that the defendant himself creates with the forum State,” and “the defendant’s suit-related conduct must create a substantial connection with the forum.”  Id. at 1122 (citations and quotation marks omitted).  Further, “minimum contacts analysis looks to the defendant’s contacts with the forum State itself, not the defendant’s contacts with persons who reside there,” id., which in Walden included the plaintiff himself.  “[R]andom, fortuitous or attenuated contacts [a defendant] makes by interacting with other persons affiliated with the State” are insufficient.  Id. at 1123.  Neither the plaintiffs nor a third-party’s “unilateral activity” count.  Id. at 1222.  Mere knowledge that the future plaintiff was affiliated with the forum state doesn’t count:

Petitioner’s actions in [another state] did not create sufficient contacts with [the forum] simply because he allegedly directed his conduct at plaintiffs whom he knew had [forum] connections. Such reasoning improperly attributes a plaintiff’s forum connections to the defendant.

Id. at 1125.  Thus, “the mere fact that [defendant’s] conduct affected plaintiffs with connections to the forum State does not suffice to authorize jurisdiction.”  Id. at 1126.

In Walden, like BMS, “no part of [defendant’s] course of conduct occurred in” the forum state.  Id. at 1124.  Plaintiff could not compensate for that lack of activity through reliance on “knowledge of [plaintiff’s] strong forum connections.  Id. at 1124-25.  “The proper question is not where the plaintiff experienced a particular injury or effect but whether the defendant’s conduct connects him to the forum in a meaningful way.” Id. at 1125.  The Court also held that, where a plaintiff “would experience this same [injury] . . . wherever else they might have” been, specific personal jurisdiction on the basis of such a contact could not be sustained.  Id.  If “the effects of [defendant’s] conduct” would be the same anywhere, that conduct was “not connected to the forum State in a way that makes those effects a proper basis for jurisdiction.”  Id.

Walden thus yields the following takeaways:  (1) The defendant’s contacts must create a “substantial connection.”  One of several dozen clinical trials shouldn’t cut it.  Nor should a trivial and irrelevant step in the manufacturing process, such as the presence of a packaging or processing facility where packaging/processing is not an issue in litigation.  (2) As held in BMS, jurisdictional contacts must be a defendant’s own, not those of some other in-state entity with which the defendant has some sort of relationship.  (3) Walden’s “same injury wherever else [a plaintiff] might have been” holding reinforces the “specific claims” discussion in BMS.  A general contact, as to which any plaintiff from anywhere could claim the same sort of injury and causation, cannot be a specific jurisdiction forum contact.  Purported contacts relating to, for example, the invention of a medical device, the testing of a prescription medical product, the preparation of FDA submissions – all of these are general contacts that any plaintiff anywhere could equally well assert.  Those are not what specific jurisdiction is about under BMS and Walden.

Other specific personal jurisdiction cases:  First, where did the “arising out of”/”relating to” specific personal jurisdiction test originate?   We tracked that down.  Ironically, the current formulation of this test was first articulated in Helicopteros Nacionales de Colombia, S.A. v. Hall, 466 U.S. 408 (1984), a case that neither involved specific jurisdiction nor applied the test.  See 466 U.S. at 415 (“[a]ll parties . . . concede[d] that [plaintiffs’] claims . . . did not “arise out of,” and are not related to, [defendant’s] activities within” the forum state”).  That being said, the Court in Helicopteros Nacionales stated:

Due process requirements are satisfied when . . . a nonresident corporate defendant . . . has certain minimum contacts with the forum such that the maintenance of the suit does not offend traditional notions of fair play and substantial justice.  When a controversy is related to or “arises out of” a defendant’s contacts with the forum, the Court has said that a “relationship among the defendant, the forum, and the litigation” is the essential foundation of in personam jurisdiction.

Id. at 414 (quoting Shaffer v. Heitner, 433 U.S. 186, 204 (1977)) (other citations and quotation marks omitted) (emphasis added).  Shaffer, however, does not contain “arising out of”/”relating to” language – that phraseology actually comes from a law review article cited in a footnote in Helicopteros Nacionales. See 466 U.S. at 414 n.8 (citing von Mehren & Trautman, “Jurisdiction to Adjudicate:  A Suggested Analysis,” 79 Harv. L. Rev. 1121, 1144-64 (1966)).  The von Mehren & Trautman article stated, “[i]n the case of specific jurisdiction, the assertion of power to adjudicate is limited to matters arising out of − or intimately related to − the affiliating circumstances on which the jurisdictional claim is based.”  79 Harv. L. Rev. at 1144-45.  So that is the origin of the relevant test applied in subsequent specific personal jurisdiction cases, up to and including BMS.

Helicopteros Nacionales contains a second interesting footnote, noting the existence (but did not deciding) of some specific personal jurisdiction issues:

[W]e decline to reach the questions (1) whether the terms “arising out of” and “related to” describe different connections between a cause of action and a defendant’s contacts with a forum, and (2) what sort of tie between a cause of action and a defendant’s contacts with a forum is necessary to a determination that either connection exists.  Nor do we reach the question whether, if the two types of relationship differ, a forum’s exercise of personal jurisdiction in a situation where the cause of action “relates to,” but does not “arise out of,” the defendant’s contacts with the forum should be analyzed as an assertion of specific jurisdiction.

Id. at 415 n.10.  Aside from this mention in Helicopteros Nacionales, these questions have never been addressed by the Supreme Court.  We will not address them either.

Other than BMS and Walden, the most recent specific personal jurisdiction case utilizing the “arising out of”/”relating to” specific personal jurisdiction test is J. McIntyre Machinery, Ltd. v. Nicastro, 564 U.S. 873 (2011), a decision concerning so-called “stream of commerce” jurisdiction that did not produce a majority opinion.  We previously discussed Nicastro here. “When a fragmented Court decides a case and no single rationale explaining the result enjoys the assent of five Justices, the holding of the Court may be viewed as that position taken by those Members who concurred in the judgments on the narrowest grounds.”  Marks v. United States, 430 U.S. 188, 193 (1977).  Thus, we need to pay careful attention to the concurring opinion of Justices Breyer and Alito in Nicastro.

Nicastro was brought  in New Jersey.  Specific personal jurisdiction over an overseas defendant had been asserted on the basis of:  (1) an out-of-state independent national distributor; (2) attendance at conventions elsewhere in the United States, and (3) the injury-causing product ending up in New Jersey.  564 U.S. at 878.  Four justices (in an opinion by Justice Kennedy) held that none of these contacts involved an “act by which the defendant purposefully avail[ed] itself of the privilege of conducting activities within the forum State“ that would allow personal jurisdiction.  Id. at 880 (citation and quotation marks omitted).  None of the facts supported the specific targeting of New Jersey, therefore no specific personal jurisdiction existed.  Id. at 886.

A state’s “strong interest in protecting its citizens from defective products” cannot overcome Due Process, since “the Constitution commands restraint before discarding liberty in the name of expediency.”  Id. at 887.  A defendant:

submits to the judicial power of an otherwise foreign sovereign to the extent that power is exercised in connection with the defendant’s activities touching on the State.  In other words, submission through contact with and activity directed at a sovereign may justify specific jurisdiction in a suit arising out of or related to the defendant’s contacts with the forum.

Id. at 881 (citations and quotation marks omitted) (emphasis added).  Applying federalism over foreseeability, these four justices rejected stream of commerce altogether.  See Id. at 886 (“the stream-of-commerce metaphor cannot supersede either the mandate of the Due Process Clause or the limits on judicial authority”).

“The principal inquiry in cases of this sort is whether the defendant’s activities manifest an intention to submit to the power of a sovereign.”  Id. at 882.  Thus, a “defendant’s transmission of goods permits the exercise of jurisdiction only where the defendant can be said to have targeted the forum; as a general rule, it is not enough that the defendant might have predicted that its goods will reach the forum State.”  Id.  Specific “personal jurisdiction requires a forum-by-forum, or sovereign-by-sovereign, analysis.”  Id. at 884.  After all, where specific jurisdiction is unavailable, “the courts of [a defendant’s] home State are available and can exercise general jurisdiction.”  Id.

The Nicastro concurrence did not reach as broadly.  It held only that “a single sale of a product in a State does not constitute an adequate basis for asserting jurisdiction over an out-of-state defendant, even if that defendant places his goods in the stream of commerce, fully aware (and hoping) that such a sale will take place.”  Id. at 888-89 (citations omitted).  The concurring justices refrained from adopting the plurality’s “strict rules that limit jurisdiction where a defendant does not intend to submit to the power of a sovereign.”  Id. at 890.

[As an aside, with Justice Alito having since written the federalism-based BMS decision, the continued viability of any form of stream of commerce jurisdiction is now open to serious question − but that is not the focus of today’s post.]

Nor could the Nicastro concurrence countenance specific jurisdiction based on foreseeability. Specific jurisdiction “rest[s] upon a particular notion of defendant-focused fairness.” Id. at 891.  They reject any rule that:

would permit every State to assert jurisdiction in a products-liability suit against any domestic manufacturer who sells its products (made anywhere in the United States) to a national distributor, no matter how large or small the manufacturer, no matter how distant the forum, and no matter how few the number of items that end up in the particular forum at issue.

Id. (emphasis added).

Nicastro thus reinforces our takeaways from BMA and Walden with the concurrence’s rejection of jurisdictional theories that would expand specific personal jurisdiction to allow product liability suits against corporate defendants to be brought in “every State” no matter how remote from where the defendant operates.  “Fairness” concerns as to specific jurisdiction are “defendant-focused.”

The specific personal jurisdiction test was also applied in Burnham v. Superior Court, 495 U.S. 604, 616 (1990). Burnham, like Walden, did not involve a corporate defendant.  The issue was whether jurisdiction was still obtainable by personal service on a defendant physically in the jurisdiction, without regard for minimum contacts.  Id. at 608.  Burnham, thus decided an attempt to restrict, rather than expand, traditional jurisdictional principles.  Moreover the decision is a mess.  In Burnham, the Court was even more split than Nicastro, producing four opinions, mostly dealing with the whether the “time honored,” id. at 622, tradition of individual personal service remained valid, in and of itself, or required an additional “minimum contacts” analysis.

Justice Scalia, writing for three justices (and sometimes four) in Burnham, predictably answered “no.”  “The short of the matter is that jurisdiction based on physical presence alone constitutes due process because it is one of the continuing traditions of our legal system that define the due process standard.”  495 U.S. at 619.  Principles protecting “absent nonresident[]” defendants were not applicable.  Id. at 620.  These justices also rejected jurisdictional rules based on “fairness” as the guiding principle.  Id. at 625-26.  Justice White’s partial concurrence in the opinion and concurrence in the result, also relied on tradition but not as rigidly.  Id. at 629 (“I cannot agree that . . . all traditional rules of jurisdiction are, ipso facto, forever constitutional”).

Justice Brennan, writing for three justices in Burnham, went the other way:  “[E]very assertion of state-court jurisdiction, even one pursuant to a ‘traditional’ rule such as transient jurisdiction, must comport with contemporary notions of due process.”  Id. at 632.  Justice Stevens agreed with everybody and nobody, found an “easy case,” and offered practically no reasoning.  Id. at 640.  Only Justice Brennan undertook to apply the “arising out of”/”relating to” specific personal jurisdiction test:

[J]urisdiction is often a function of geography.  The transient rule is consistent with reasonable expectations and is entitled to a strong presumption that it comports with due process. . . .  [A] state has power to exercise judicial jurisdiction over an individual who is present within its territory unless the individual’s relationship to the state is so attenuated as to make the exercise of such jurisdiction unreasonable.

Id. at 637 (citations and quotation marks omitted).  Justice Brennan’s concurrence, however, also advanced a proposition that was definitively rejected by BMS – “an out-of-state plaintiff may use state courts in all circumstances in which those courts would be available to state citizens.”  Id. at 638.  As already discussed, BMS rejected this analogy, when it held that the non-resident plaintiffs could not assert specific jurisdiction to the same extent as resident plaintiffs.  137 S. Ct. at 1781.

The many peculiarities of Burnham – the number of opinions, most of the opinions’ reliance on “tradition,” the attempt to restrict (rather than expand) traditional jurisdiction, non-corporate parties – make it impossible to garner any significant takeaways from the decision.  If Burnham stands for anything, it would be the inapplicability of Due Process tests involving “absent nonresident[]” defendants to cases involving individuals who were physically in the jurisdiction.

The “arising out of”/”relating to” specific personal jurisdiction test was also applied in Burger King Corp. v. Rudzewicz, 471 U.S. 462 (1985).

Where a forum seeks to assert specific jurisdiction over an out-of-state defendant who has not consented to suit there, [personal jurisdiction] is satisfied if the defendant has “purposefully directed” his activities at residents of the forum, and the litigation results from alleged injuries that “arise out of or relate to” those activities.

Id. at 472 (citation and quotation marks omitted) (emphasis added).  Michigan franchisees claimed they were not subject to suit in Florida (as provided by contract) because the litigation did not “arise” from Florida.  Id. at 469.  They had “never even visited there.”  Id. at 479.  Burger King held that specific personal jurisdiction nonetheless existed, primarily because of the nature of the parties’ contract.  “[P]arties who reach out beyond one state and create continuing relationships and obligations with citizens of another state are subject to regulation and sanctions in the other State for the consequences of their activities.”  Id. at 473.  “[T]he Due Process Clause may not readily be wielded as a territorial shield to avoid interstate obligations that have been voluntarily assumed.”  Id. at 474.

Mere “foreseeability of causing injury in another State . . . is not a sufficient benchmark for exercising personal jurisdiction.”  Id. (citation and quotation marks omitted).  While a contract, without more does not confer personal jurisdiction, id. at 748, a contract that “established a substantial and continuing relationship with” an out-of-state entity does.  Id. at 487.  Where a party “reached out” and entered into a contract that “voluntar[ily] accept[ed] the long-term and exacting regulation of his business from” out of state, then the relationship is not “random, fortuitous, or attenuated,” so that a claim of breach does not “arise from” those out-of-state obligations.  Id. at 479-80 (citations and quotation marks omitted).

The takeaway from Burger King is that defendants (including corporate defendants) that “reach out” and affirmatively “establish a substantial and continuing relationship” with someone in a jurisdiction are amenable to suit there, even if they have never had a physical presence there.  If not, then they don’t – or, at least, should not be subject to specific personal jurisdiction.

The rest of the cases turned up by our search were less relevant to the test for specific personal jurisdiction.  As in Helicopteros Nacionales, the Court recited the specific personal jurisdiction test in Bauman, although that case turned on general, rather than specific, jurisdiction.  Daimler AG v. Bauman, 134 S.Ct. 746 (2014).  “Adjudicatory authority of this order, in which the suit ‘aris[es] out of or relate[s] to the defendant’s contacts with the forum,’ is today called ‘specific jurisdiction.’” Id. at 755 (quoting Helicopteros Nacionales).  A similar statement – prescient, because the test itself was not formulated until decades later −  is found in Perkins v. Benguet Consolidated Mining Co., 342 U.S. 437 (1952), observing that because the “cause of action sued upon did not arise in [the forum] and does not relate to the corporation’s activities there,” the issue was general, not specific, jurisdiction.  Id. at 439.  Neither case contains any analysis if the specific jurisdiction test.

In Hanson v. Denckla, 357 U.S. 235 (1958), the terms appear in a dissent, and not as a test for jurisdiction.  Id. at 258-59.  The same is true (except for the dissent part) in the older (pre-International Shoe Co. v. Washington, 326 U.S. 310 (1945)) decision Milliken v. Meyer, 311 U.S. 457, 464 (1940).  The remaining cases were not really personal jurisdiction cases at all.  Several involve “arising out of”/”relating to” in arbitration agreements and dealt with arbitration-related issues.  See CompuCredit Corp. v. Greenwood, 565 U.S. 95, 104 (2012); Cortez Byrd Chips, Inc. v. Bill Harbert Construction Co., 529 U.S. 193, 195 (2000); Southland Corp. v. Keating, 465 U.S. 1, 4 (1984).  Finally, the language also appears in a dissent in a sovereign immunity case.  Saudi Arabia v. Nelson, 507 U.S. 349, 379 (1993).

Thus, based on review of every United States Supreme Court case ever expressly employing the “arising out of”/”relating to” test for specific personal jurisdiction we conclude, first, that to allow a non-resident plaintiff to maintain specific personal jurisdiction on any basis would be unprecedented.  Every United States Supreme Court specific jurisdiction decision that we’ve read has involved a plaintiff who was a resident of the jurisdiction in which the suit was brought.  Beyond that, the cases provide the following takeaways:

  • For forum contacts to support specific personal jurisdiction, they must relate to a “specific” plaintiff.  They cannot be such that “wherever else” plaintiffs might reside, they could all assert the same supposed contact.
  • Specific jurisdiction contacts cannot support jurisdiction in multiple states.
  • Contractual arrangements with in-state entities do not create specific jurisdiction.  Unless a basis exists to create vicarious liability, the only relevant contacts are those of the defendant itself.
  • Forum contacts related to the product (e.g., pertaining to FDA approval), but not specific to a particular plaintiff’s claim, do not create specific jurisdiction.
  • Forum contacts that are unrelated to the particular claims of a particular plaintiff (e.g. packaging in a design defect case) cannot support specific jurisdiction.
  • Forum contacts must be “substantial” (or “substantial and continuing,” depending on which decision one quotes), so the presence in the forum state of one of numerous similar activities conducted by the defendant nationwide (e.g., a sales representative, or a clinical trial) cannot create personal jurisdiction unless relevant to the plaintiff’s particular circumstances.

Today’s guest post comes to us courtesy of Dick Dean and Nick Janizeh, both of Tucker Ellis. They’ve been thinking (as have we all) about the ramifications of the BMS decision on personal jurisdiction, and have come up with some conclusions that we found interesting, and we hope that you do, too.  As always, our guest posters are entitled to 100% of the credit (and any blame) for what follows.


In Bristol-Myers Squibb Co. v. Superior Court, 137 S. Ct. 1773 (2017) (“BMS”) [ed. note – our post here], the United States Supreme Court concluded that specific jurisdiction must be premised on a defendant’s in-state conduct giving rise to a plaintiff’s alleged injury.  The Court explained that plaintiffs therefore could not pursue their claims in a state in which they did not reside or in which they were not injured if a defendant conducted no activity in that state connected to the injury.  That other in-state plaintiffs may be advancing similar claims as part of a coordinated proceeding did nothing to change this analysis.

BMS signaled the end of litigation tourism wherein non-resident plaintiffs could tack their claims onto another state’s mass coordinated proceeding.  Or so it seemed.  Recently, a trio of decisions from state courts have distinguished BMS and permitted out-of-state plaintiffs who were not injured in the forum state to prosecute their claims in that forum.  As explained below, the court in each case nevertheless found jurisdiction over non-resident defendants by pointing to a “connection” to the defendants’ conduct within the forum state.

In the DePuy ASR Hip™ Systems Cases, a California court permitted a Connecticut resident who was implanted with a hip replacement device in Connecticut, had the device removed in Connecticut, and received follow-up care in Connecticut to advance her claims (which included design, warning, and manufacturing defect) in California. DellaCamera v. DePuy Orthopaedics, Inc., No. CGC-11-509600, at 3 (Cal. Super. Ct. Nov. 1, 2017).  Even given all these Connecticut connections, the court found specific jurisdiction as to DePuy (a non-California corporation) on the basis that the defendant had “collaborate[d]” with two California-resident doctors on the design of the hip implant. Id. at 5.  The court found that this “distinguishe[d] the case from the situation in BMS, where the U.S. Supreme Court found that the nonresident defendant did not develop, manufacture, label, package, or create a marketing strategy for the drug in the forum state, and where it was not alleged that the nonresident defendant engaged in relevant acts together with the California resident defendant.” Id. at 6-7.

A Missouri state court issued the second decision as part of the talcum-powder, ovarian-cancer litigation. Even after another talc case involving an out-of-state resident was thrown out of Missouri state court just a month prior for want of personal jurisdiction (Fox v. Johnson & Johnson, No. ED104580, 2017 WL 4629383, at *2-3 (Mo. Ct. App. Oct. 17, 2017) [ed. note – our post here], the court denied the non-resident defendants’ motion to dismiss a Virginia plaintiff’s claims and instead decided to preserve a $110.5 million jury verdict in favor the out-of-state plaintiff (see Slemp v. Johnson & Johnson, No. 1422-CC09326-02, at 11-12 (Mo. Cir. Ct. Nov. 29, 2017)).  The defendants argued that there was no personal jurisdiction because the plaintiff purchased and used the products and developed cancer in Virginia, not Missouri. Id. at 3.  But the court nevertheless found jurisdiction, stating that, “by contrast [to BMS], there is evidence [here] that Defendants’ conduct giving rise to Plaintiffs’ claims occurred in Missouri.  Plaintiffs allege that Defendants engaged in relevant acts within the state of Missouri, including enlisting a Missouri company, PTI Union, LLC, to manufacture, mislabel, and package . . . the very products which caused injury to the Plaintiffs.” Id. at 6-7.  Put differently, the court found jurisdiction over the named defendants because of a contractual relationship they had with an in-state manufacturer who was not a named party in the case. See id.

Finally, the Philadelphia Court of Common Pleas found jurisdiction over all but one of the 71 cases currently pending before it as part of Pennsylvania’s pelvic mesh mass tort program. See Order, In re: Pelvic Mesh Litig., No. 829, at 1 (Phila. Ct. Comm. Pleas Dec. 4, 2017); “Pa. Judge Affirms Jurisdiction On Out-Of-State Mesh Cases,” Law360 (Dec. 5, 2017).  The court issued a one-page order dismissing the lone Prolift +M case from the program because the Prolift +M product did not “touch” Pennsylvania in any way during its manufacturing process.  By contrast, a Pennsylvania company had one—albeit small—role in the manufacturing process for the products at issue in the other 70 cases.  Specifically, that company wove together filaments of mesh, which had been made in other states, and then sent the woven mesh out of state for further processing.  Notably, however, that company had been dismissed from the litigation pursuant to the Biomaterials Access Assurance Act, 21 U.S.C. §§ 1601, et seq. before this jurisdictional challenge was advanced.

These three decisions are examples of state courts finding jurisdiction over non-resident plaintiffs’ product liability claims so long as it can be shown that the product was somehow designed or manufactured in state. Moreover, the entity responsible for the design or manufacture—as was the case in the talc and mesh litigations—need not even be a named defendant.  But the Supreme Court did not go that far.  In BMS, the Supreme Court found that a contractual relationship between a non-resident drug manufacturer and an in-state named co-defendant that distributed the drug was insufficient to find specific jurisdiction over the out-of-state manufacturer.  137 S. Ct. at 1783.

Assuming there can be personal jurisdiction based on contractual relationships with third parties not named as defendants, there is a more basic flaw in these opinions. Just because there is specific jurisdiction over one claim (e.g., design defect), that is insufficient to find specific jurisdiction over all claims (e.g., warning claims, breach of warranty claims, and the laundry list of other claims that is usually appended to complaints against the pharmaceutical industry).  Several federal circuits have adopted this claim-by-claim standard. See, e.g., Remick v. Manfredy, 238 F.3d 248, 256-60 (3d Cir. 2001) (conducting specific-jurisdiction analysis as to each individual cause of action); Action Embroidery Corp. v. Atl. Embroidery, Inc., 368 F.3d 1174, 1180 (9th Cir. 2004) (“Personal jurisdiction must exist for each claim asserted against a defendant.” (emphasis added)).  So too have several state courts. See, e.g., Blume Law Firm PC v. Pierce, 741 N.W.2d 921, 925 (Minn. Ct. App. 2007) (“When multiple claims are raised, personal jurisdiction must be established for each claim.”); Moncrief Oil Int’l Inc. v. OAO Gazprom, 414 S.W.3d 142, 150 (Tex. 2013) (“[S]pecific jurisdiction requires us to analyze jurisdictional contacts on a claim-by-claim basis.”).  And it has even been applied in the products liability context. See, e.g., Seiferth v. Helicopteros Atuneros, Inc., 472 F.3d 266, 275 (5th Cir. 2006) (“[P]laintiff bringing multiple claims that arise out of different forum contacts must establish specific jurisdiction for each claim.” (emphasis added)); see also id. (noting that plaintiff brought four claims—defective design, failure to warn, negligence, and negligence per se—and explaining that only the design claim arose out of defendant’s contacts with the forum state, the other three did not); In re Testosterone Replacement Therapy Prods. Liab. Litig., 164 F. Supp. 3d 1040, 1048-49 (N.D. Ill. 2016) (citing Seiferth); Novy v. C.R. Bard, Inc., No. 16-cv-02853, 2016 WL 6393596, at *4-5 (D. Ariz. Oct. 28, 2016) (“Plaintiffs argue that out-of-state Plaintiffs ‘do not have to separately establish personal jurisdiction for each claim as though they were in a vacuum.’ . . .  This Court does not agree.”).

Admittedly, the three cases discussed in this post present unique examples and do not permit much wiggle room to evade the thrust of BMS—especially in the drug and device sphere (after all, in how many states is a drug designed or components of a device manufactured?).  But they all fail to address well recognized due process considerations that were not in play in BMS.  That is, specific jurisdiction must be considered on a claim-by-claim basis.  This is well recognized in the pre-BMS case law and should not be forgotten in the post-BMS landscape.