Hope springs eternal. At least that is what the optimists say, and while we would like to see the bright side of the Missouri Supreme Court’s split opinion on venue in Barron v. Abbott Laboratories, Inc., No. SC 96151, 2017 WL 4001487 (Mo. Sept. 12, 2017), we are having trouble this morning finding our
“I am from Missouri. You have got to show me.” That quote attributed to Congressman Willard Duncan Vandiver in 1899 is reputedly the source of Missouri’s unofficial nickname, the “Show Me” state. Or maybe it isn’t. Whatever the slogan’s origin, a federal judge in Missouri recently said “show me” when 83 plaintiffs from 30
We commented last week that we were not surprised by the numerous post-BMS personal jurisdiction decisions we were seeing. Lots of courts and parties around the country were watching and waiting for this one. So, let’s add some more. This time from another of plaintiffs’ favorite “magnet jurisdictions” – Missouri. Historically, product liability plaintiffs
Today’s guest post is from friend-of-the-blog Sarah Bunce, a partner at Tucker Ellis. It’s about the 8th Circuit finally having before it aspects of the effects of the current, bizarrely applied Missouri joinder and venue rules (see here) on federal jurisdiction. Not only is it about time, though, it may be
This is a follow-up to our post last week on the Missouri Supreme Court’s momentous personal jurisdiction decision in State ex rel. Norfolk Southern Railway Co. v. Dolan, ___ S.W.3d ___, 2017 WL 770977 (Mo. Feb. 28, 2017) (“NSRC”). We stated last week, and we continue to believe, that NSRC will ultimately kill litigation tourism in Missouri.
However, it won’t be easy. Nothing ever is against the rich and entrenched litigation industry.
As we would expect, the other side is talking out both sides of its mouth about NSRC.
On one hand, in the ongoing legislative push for a statutory fix to the bizarre and unfair way that courts have interpreted Missouri’s venue and joinder rules (see our post here), those supporting the other side of the “v.” are already claiming that the venue/joinder reform bill (H.B. 460 – which will be on the House floor this week) is no longer necessary; that NSRC supposedly “fixed” everything.
On the other hand, and essentially simultaneously, in the multi-plaintiff mass tort litigation that is the main reason tort reform is so desperately needed, they’re doing the opposite – trying to get around NSRC by claiming “pendent party” jurisdiction as a result of the very same venue/joinder problems that venue/joinder reform and H.B. 460 is intended to fix.
Talk is cheap. Watch what they do, not what they say.
They can’t have it both ways. In fact, they can’t have it either way. The plaintiffs’ first position is garbage, and the second is devoid of legal support.
For the reasons stated in our original post, H.B.460 remains necessary after NSRC. NSRC established that personal jurisdiction over non-resident corporations by non-resident plaintiffs over injuries not arising in Missouri is unconstitutional under the Due Process clause. There is no general personal jurisdiction because the defendant is not “at home.” There is no specific personal jurisdiction because out-of-state injuries to out-of-state plaintiffs are not “related to” a defendant’s Missouri activities. There is no “consent” merely by registering to do business.
But as good as it was, NSRC was not a mass tort case. Rather, it was an individual litigation tourist plaintiff suing a single non-resident corporation. NSRC thus had no occasion to address either the 99-plaintiff misjoined tort complaints that have become the bane of Missouri product liability practice or the 99-defendant complaints that are typical of asbestos (and some other) product liability litigation. Eliminating those abuses are at the core of H.B. 460, meaning that the reforms proposed in H.B. 460 remain every bit as necessary as before. As we discussed, the court of appeals in Barron v. Abbott Laboratories, Inc., ___ S.W.3d ___, 2016 WL 6596091, at *13 (Mo. App. Nov. 8, 2016), invited the legislature to correct the venue/joinder rules, and that is exactly what H.B. 460 will do.Continue Reading More on Missouri – What To Expect and Not To Expect After Norfolk Southern v. Dolan
If we’d learned about State ex rel. Norfolk Southern Railway Co. v. Dolan, No. SC95514, slip op. (Mo. Feb. 28, 2017) (“NSRC”), earlier, this would have been a breaking news post – but make no mistake about it, this is big news. Unanimously, the Missouri Supreme Court has, for all intents and purposes, put an end to Missouri’s notorious litigation tourism industry (about a month before the Legislature would have done the same).
NSRC is a railway accident case, not a product liability action, but the jurisdictional facts are familiar to anyone interested in Missouri jurisdiction and venue issues. An out-of-state litigation-tourist, personal-injury plaintiff sued a large out-of-state corporation in Missouri state court (county not stated, but we can guess) over injuries not suffered in Missouri. NSRC, slip op. at 2-3. The Missouri Supreme Court made three major rulings: (1) no general jurisdiction exists over the non-resident corporate defendant because it was not “at home” in Missouri; (2) no specific jurisdiction existed because the litigation tourist’s injuries did not “relate to” the defendant’s Missouri activities; and (3) the defendant’s compliance with the Missouri statute governing corporate registration did not constitute “consent” to general personal jurisdiction.
First, general jurisdiction. Due process under Daimler AG v. Bauman, 134 S. Ct. 746, 751 (2014), requires that a corporation be “at home” in the state in question. While the defendant conducted “continuous and systematic” business in Missouri (and in 21 other states), that business “represents a tiny portion of [defendant’s] entire nationwide business.” NSRC, slip op. at 8. Game over on general jurisdiction . Bauman “observed that finding a corporation at home wherever it does business would destroy the distinction between general and specific jurisdiction.” Id. at 9.Continue Reading Litigation Tourism Ended In Missouri
Even after having read it through twice, we find the result in Barron v. Abbott Laboratories, Inc., ___ S.W.3d ___, 2016 WL 6596091 (Mo. App. Nov. 8, 2016), hard to fathom, and even harder to stomach. For several years after starting the blog, one of our aphorisms was “nothing good ever comes out of Missouri.” Then legal developments caused us to retire that slogan. Now we may have to bring it back – maybe.
Barron affirmed a $48 million verdict – concerning birth defects – against the maker of a drug that had a black box warning – about birth defects
| [THE DRUG] CAN PRODUCE TERATOGENIC EFFECTS SUCH AS NEURAL TUBE DEFECTS (E.G., SPINA BIFIDA). ACCORDINGLY, THE USE OF [THE DRUG] IN WOMEN OF CHILDBEARING POTENTIAL REQUIRES THAT THE BENEFITS OF ITS USE BE WEIGHED AGAINST THE RISK OF INJURY TO THE FETUS. |
Barron, 2016 WL 6596091, at *1.
Astonishingly, this boxed warning, which only the FDA can mandate, was a sufficiently inadequate advisory that the drug could cause birth defects that a St. Louis (City) jury awarded $23 million in punitive damages to the plaintiff, who was from Minnesota.
And those two places – St. Louis City and Minnesota – are as much the problem as the “Show-Me-The-Money State” verdict itself. Barron is a poster child for venue and joinder run amok. First, the underlying action was filed by 24 plaintiffs from all over the country (13 different states), with nothing in common save claiming somewhat similar injuries to different persons from the same drug. Id. at *4. Of course, a couple of plaintiffs were from Missouri (and another presumably from the home state of a defendant), in order to defeat diversity. Id. at *2.Continue Reading Awful Missouri Venue/Joinder Ruling Offers Way Out – Take It!
This post is from the non-Reed Smith side of the blog.
There are two key rulings in Addelson v. Sanofi S.A., 2016 WL 6216124 (E.D. Mo. Oct. 25, 2016). Neither is novel or complex. The court can’t exercise personal jurisdiction over an out-of-state defendant on claims made by an out-of-state plaintiff and said out-of-state plaintiff can’t be used to defeat federal diversity jurisdiction. Their significance lies more in the fact that they were issued by the Eastern District of Missouri.
Defendant Sanofi (the U.S. subsidiary) is a Delaware corporation with its principal place of business in New Jersey. Id. at *1. Plaintiff Addelson is a resident of St. Louis County, Missouri. Plaintiff Braxton is a New Jersey resident. Plaintiffs both were prescribed and used the prescription medication taxotere in their home states. Id. Plaintiffs have no relationship with each other.
Plaintiffs’ counsel filed a single complaint on behalf of both women in state court in Saint Louis, Missouri – a known judicial hellhole favored by the plaintiffs’ bar. So, why join these two women? Plaintiff Addelson is a Missouri resident who suffered her alleged injury in Missouri which establishes personal jurisdiction for this incident over Sanofi. Plaintiff Braxton is a New Jersey resident which means there is no diversity between her and Sanofi which also means the case can’t be removed to federal court. Clearly a not-too-subtle attempt by plaintiffs to bring and keep this case in state court in St. Louis. Unfortunately, this is a tactic that has worked in Missouri. Missouri’s joinder rules have been broadly interpreted to often allow plaintiffs’ counsel to join together groups of plaintiffs from different states with nothing in common except use of the same product. So, 1 Missouri plaintiff gets you the connection to Missouri and 1 plaintiff from defendant’s home state defeats diversity and keeps you in state court.Continue Reading Misjoined Plaintiffs Can’t Be Used to Forum Shop
The preemption clause in the Nutrition Labeling and Education Act of 1990 is clear and direct. It prohibits states from imposing nutritional labeling requirements that are not “identical to” federal requirements. 21 U.S.C §343-1(a). If they’re not identical, they’re preempted.
This came squarely into play last week in Dougherty v. Source Natural, Inc., 2015 U.S. Dist. LEXIS 164117 (E.D. Mo. Dec. 8, 2015). A putative class action plaintiff claimed that a multivitamin distributed by defendant Source Natural, Inc. contained actual nutrient levels for six of its vitamins and minerals that were less than the labeled amount. Id. at *1-2. She requested a refund for her and everyone else in the class. Id. at *2. But she ran into a problem, a big one. Her expert (really, the expert hired by her lawyer) calculated the nutrient levels of the multivitamin using a testing methodology that was different from the FDA’s methodology. Uh-oh.
The FDA’s methodology is laid out in the Code of Federal Regulations. It involves, among other things, sampling from 12 different product cases:
[T]he FDA has enacted regulations pertaining to expressed nutrient content claims. Under 21 C.F.R. § 101.13, “[a] claim that expressly or implicitly characterizes the level of a nutrient of the type required to be in nutrition labeling under §101.9 or under § 101.36 (that is, nutrient content claim) may not be made on the label or in labeling of foods unless the claim is made in accordance with this regulation.” 21 C.F.R. § 101.13(b). Whether the requirements or nutrient content claims comply with the regulations are determined by using the methodology provided in § 101.9. 21 C.F.R. § 101.13(o). Under § 101.9(g), “[t]he sample for nutrient analysis shall consist of a composite of 12 subsamples (consumer units), taken 1 from each of 12 randomly chosen shipping cases, to be representative of a lot.” 21 C.F.R. § 101.9(g)(2).
Id. at *5-6. Plaintiff’s test didn’t use 12 cases, or even 12 bottles. It used one bottle. That’s a “different” test from the FDA’s. Allowing a plaintiff to hold a manufacturer liable for not meeting that “different” test would impose a requirement on the manufacturer that is different from the FDA’s requirement. And, so, Plaintiff’s claim was preempted:
Because Plaintiff has failed to allege she followed FDA testing protocols, her state law claims that rely on a different methodology to demonstrate such labeling violations are inconsistent with the FDCA and are thus preempted.
Id. at *11. That’s certainly a quick and neat preemption win.Continue Reading Court Dismisses Nutritional Labeling Class Action on the Basis of Preemption
It offends our sensibilities (and sense of self-preservation) when we see a lawsuit in a jurisdiction that is home to neither the plaintiff, nor the defendant, nor any of the activities that gave rise to the claims. Often, the only things the jurisdiction was home to were the plaintiff attorneys and a set of maddeningly pro-plaintiff judges and juries. One would think that a court system and its taxpayers would feel aggrieved at devoting labor and money to resolve disputes for someone else from someplace else, but there are miscreants in the works who manage to ignore the expense side of the equation and instead focus only on the chimerical benefits of litigation tourism or the miscreants’ misplaced sense of self-importance. (Remember, we practice in Philly. We have whiled away many hours in City Hall courtrooms watching Texas lawyers representing Utah plaintiffs suing a New Jersey company, all in front of Center City Philly jurors who would no doubt rather do their jobs, spend time with their children, or discuss the moribund status of the Phillies, Flyers, Sixers, and pretty much any home team here above Little League.) The problem is that the law on personal jurisdiction was perfectly elastic, and the laws of venue and forum non conveniens were all too easily disregarded or distorted.
But at least personal jurisdiction has been set aright by the Supreme Court. When we were in law school, during the era of Duran Duran and Footloose, we were taught that there was personal jurisdiction over a large corporation so long as said corporation had systematic contacts with a jurisdiction – which, being a large corporation, it pretty much always did. Then, in 2014, when we had grudgingly moved on to the Black Keys and Guardians of the Galaxy, the Supreme Court in the Bauman case limited general jurisdiction to corporations that were “at home” in the jurisdiction (usually meaning place of incorporation or principal place of business), and limited specific jurisdiction to cases where the corporation’s suit-related conduct created a substantial connection to the state.
The impact of Bauman was immediate and profound and wholly beneficent. We have had the pleasure on a number of occasions (here and here, for example) of reporting on cases in which the new Bauman jurisdiction architecture slammed shut the gate on plaintiff forum-shopping. This Spring we discussed the Neely case from the Kansas federal district, where the court held that a drug company that registered to do business in Kansas and then actually had the temerity to conduct some business there had not thereby succumbed to general jurisdiction. That was a good result.Continue Reading Missouri Court Applies Bauman; Merely Doing Business Did Not Show Enough for Personal Jurisdiction