We bloggers don’t generally consider the Drug and Device Law sandbox to extend to illegal drugs.  We regard that as a completely separate can of worms.  But what of a drug – like marijuana – that’s in between being legal and being illegal?  In an increasing number of states, marijuana’s current situation is a bit like Schroedinger’s famous cat, legal and illegal at the same time depending on who’s enforcing what law.

The same could be said of sports betting – at least until last week, when the United States Supreme Court decided Murphy v. National Collegiate Athletic Assn., ___ S. Ct. ___, 2018 WL 2186168 (U.S. May 14, 2018).  The federal government had banned sports betting (except in Nevada), but a number of states (including New Jersey, the real plaintiff) were champing at the bet to legalize – and reap tax revenues from – gambling on sporting events.

The Supreme Court basically said that the federal government couldn’t force the states to abstain from legalizing sports betting.  The feds could not “commandeer” state law enforcement and require them to keep sports betting illegal:

The [statutory] provision at issue here − prohibiting state authorization of sports gambling − violates the anticommandeering rule. That provision unequivocally dictates what a state legislature may and may not do. . . .  [S]tate legislatures are put under the direct control of Congress.  It is as if federal officers were installed in state legislative chambers and were armed with the authority to stop legislators from voting on any offending proposals. A more direct affront to state sovereignty is not easy to imagine.

Murphy, 2018 WL 2186168, at *13.  See Id. at *17 (“Just as Congress lacks the power to order a state legislature not to enact a law authorizing sports gambling, it may not order a state legislature to refrain from enacting a law licensing sports gambling.”). The federal scheme “would break down if a State broadly decriminalized sports gambling.”  Id. at *19.

The Court viewed both affirmative and negative demands that the states do what the feds want as barred by that principle:

Here is an illustration.  [The statute] includes an exemption for [Nevada], but suppose Congress did not adopt such an exemption.  Suppose Congress ordered States with legalized sports betting to take the affirmative step of criminalizing that activity and ordered the remaining States to retain their laws prohibiting sports betting. There is no good reason why the former would intrude more deeply on state sovereignty than the latter.

Id.  This example certainly seems to resembles certain noises emanating from the current Department of Justice that it might seek to roll back state legalization of marijuana.

Now, let’s be clear, “commandeering” is not something that dissolves federal powers provided for in the constitution.  It would not allow the department to re-institute Jim Crow, let alone slavery.  Federal powers in the constitution (such as power over interstate commerce) remain:

The legislative powers granted to Congress are sizable, but they are not unlimited. The Constitution confers on Congress not plenary legislative power but only certain enumerated powers.  Therefore, all other legislative power is reserved for the States, as the Tenth Amendment confirms.  And conspicuously absent from the list of powers given to Congress is the power to issue direct orders to the governments of the States. The anticommandeering doctrine simply represents the recognition of this limit on congressional authority.

Id. at *10.  But once the state decides to legalize the activity within its borders, the feds can’t force the states to keep that activity illegal under state lawId. at *18 (“If the people of a State support the legalization of sports gambling, federal law would make the activity illegal.”).  A federal law that only operates only to “undermine[] whatever policy is favored by the people of a State” is both “perverse” and “weird.” Id. at *18.

Thus, what Murphy calls “the anticomandeering principle” is limited.  While it could well prevent DoJ from – as the “example” above indicates – “order[ing] States with legalized [marijuana] to take the affirmative step of criminalizing that activity,” id. at *13, the feds still retain the power, for example, to ban marijuana from interstate commerce.  Murphy also leaves open the possibility that a federal statute, phrased (unlike the law before the Court) explicitly in terms of federal preemption and not directed at states, might have provided means of avoiding the anticomandeering principle.  Id. at *15-16 (“every form of preemption is based on a federal law that regulates the conduct of private actors, not the States”). So that’s another possible source of federal power to continue pothibition, should Congress choose to act in that fashion.

There’s one other place where would be marijuana entrepreneurs – and states wishing to raise revenue from taxing such enterprises – might be able to put the anticomandeering principle to good use.  One big problem has been federal laws that prevent even legalized marijuana businesses from accessing the banking system.  While the feds can certainly continue that practice, whether it’s a good or bad idea, with respect to federally regulated banks, we think that Murphy casts considerable doubt on whether the federal government can tell state banks that they cannot accept deposits from marijuana businesses that the state regulating those banks has declared to be legal.

We don’t claim to know all the ins and outs of anticommandeering – a word we had never seen before reading Murphy.  But if a state, in its wisdom, chooses to legalize commerce in marijuana, it seems equally “perverse” and “weird” to require those legal businesses to bury the money they legally make in their basements rather than to deposit it in a bank regulated by the same government that legalized their activities.

 

Last September, we criticized a 2-1 decision out of the Ninth Circuit, In re Google Referrer Header Privacy Litigation, 869 F.3d 737 (9th Cir. 2017), calling it a “poster child” for cy pres abuse in class actions.  Read the entire post for all the gory details, but briefly, the class action settlement in Google Referrer:

  • Let counsel have a whopping 38% of the settlement as fees.
  • Declared the entire settlement “non-distributable” because, even without opposition, neither the class members nor their damages could be determined.
  • Gave 100% of the settlement funds as cy pres to six uninjured charities, and 0% to the 129 million estimated supposedly injured class members.
  • All three of the law school cy pres recipients had ties to counsel in the case.
  • The cy pres recipients were to educate and publicize supposed internet privacy issues – in other words, to act as a breeding ground for further litigation of this sort.

We closed that post by recommending, “[w]e think this is a case that should go to the United States Supreme Court.”  We don’t say that often (only about DesianoNeurontinBartlett, Bristol Myers-Squibb, and Fosamax, that we can recall offhand) – six times in eleven years.

Well, we’re pleased to report that yesterday the United States Supreme Court accepted a certiorari petition in the case, rechristened as Frank v. Gaos, No. 17-961, 2018 WL 324121 (U.S. Apr. 30, 2018).  The SCOTUSBlog story is here.  The order granting certiorari is here.  The question presented is:

Whether, or in what circumstances, a cy pres award of class action proceeds that provides no direct relief to class members supports class certification and comports with the requirement that a settlement binding class members must be “fair, reasonable, and adequate.”

See Certiorari petition.  We are cautiously optimistic that the result in Frank will be the disavowal or severe limitation of cy pres distributions in class actions.

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.

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

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

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

What is that? Here is SCOTUSBlog’s description:

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

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

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

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

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

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

New Jersey Supreme Court Grants Review of Accutane Cases

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

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

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

For over fifty years, the BBC has been chronicling the exploits of that ultimate learned intermediary, Dr. Who.  Over the decades, successive Doctors have crossed swords (or sonic screwdrivers) with a wide variety of enemies, from the Master, through Daleks, Cybermen, Zygons, and Mara.  But for us, there is no more terrifying foe than the Vashta Nerada.  In the episodes “Silence in the Library” and “Forest of the Dead,” these microscopic piranha of the air lurk in the shadows until swarming around their next victim, whom they reduce to skeletal leftovers in seconds.  Shortly before the end, those selected for consumption by the Vashta Nerada take on an unusual characteristic – they have two shadows.

Which is similar to how we see Medtronic, Inc. v. Lohr, 518 U.S. 470 (1996) (“Lohr”).  We think that decision is close to the end – in Gallifreyan terms, it has two shadows.

Bexis still remembers when Lohr came down, like it was yesterday.  Just a few months before, in the Bone Screw litigation (involving Class II devices), the defendants had won an order holding that probably 85% of the plaintiffs’ allegations were preempted.  See In re Orthopedic Bone Screw Products Liability Litigation, 1996 WL 221784 (E.D. Pa. April 8, 1996) (interestingly, this decision doesn’t have a red flag, although it should).  Bexis had also written an amicus curiae brief in Lohr that articulated the defense position on negligence per se issues (available at 1996 WL 109632).  Lohr said good-bye to all that.  The section of Lohr concerning what has become the so-called “parallel claims” exception to preemption was 9-0 (in other words, Bexis got skunked).  The rest of Lohr, concerning preemption of design and warning claims, was ostensibly 5-4, although Justice Breyer’s concurrence (necessary to make a majority) wasn’t exactly on all fours as to the reasoning.

It’s been over 20 years since Lohr, and that decision hasn’t aged well.  We discuss why in this post.

The key to Lohr’s reasoning – particularly in light of the subsequent decision in Riegel v. Medtronic, Inc., 552 U.S. 312 (2008) – is its distinguishing of the FDA pre-market approval (“PMA”) process from the “expedited” §510(k) clearance that the device before the Court had undergone in 1982.  518 U.S. at 480.  Pre-market approval was “rigorous” safety review:

Before a new Class III device may be introduced to the market, the manufacturer must provide the FDA with a “reasonable assurance” that the device is both safe and effective.  See 21 U.S.C. § 360e(d)(2).  Despite its relatively innocuous phrasing, the process of establishing this “reasonable assurance,” which is known as the “premarket approval,” or “PMA” process, is a rigorous one.  Manufacturers must submit detailed information regarding the safety and efficacy of their devices, which the FDA then reviews.

Id. at 477 (emphasis added).

By contrast, “substantial equivalence” clearance for marketing and labeling did not (according to the lead Lohr opinion) impose the same standard as PMA.  Section 510(k) – codified as 21 U.S.C. §360(k) and following the FDA procedure detailed in §360c(i) – was viewed as a “grandfathering provision which allows pre-1976 devices to remain on the market without FDA approval.”  Lohr, 518 U.S. at 478.  It “permits devices that are ‘substantially equivalent’ to pre-existing devices to avoid the PMA process.”  Id.  A majority in Lohr held that “[t]he § 510(k) notification process is by no means comparable to the PMA process.”  Id. at 475-79.

In Lohr, the Court held that preemption under 21 U.S.C. §360k “does not occur in a contextual vacuum.  Rather, that interpretation is informed by two presumptions about the nature of pre-emption.”  Id. at 485.  The “first” and most important of these presumptions in Lohr was:

In all pre-emption cases, and particularly in those in which Congress has legislated in a field which the States have traditionally occupied, . . . we use[] a “presumption against the pre-emption of state police power regulations” to support a narrow interpretation of such an express command.

Id. (citations and quotation marks omitted) (emphasis added).  The second presumption was even more extra-textual – that the Court looks “not only in the [statutory] text,” but also to “the structure and purpose of the statute as a whole” in evaluating congressional “purpose.”  Id. at 485-86.

By then, it was clear where Lohr was going.  The majority construed the language of §360k(a) “narrowly,” and when that was not enough, it looked to its gestalt conception of the overall purpose of the FDCA, again in preference to the language Congress actually drafted in §360k(a).

Looking at the entire statute, the Lohr lead opinion found no private FDCA cause of action.  518 U.S. at 487.  It declared the argument “implausible” that “Congress would have barred most, if not all, relief for persons injured by defective medical devices,” even though that result was what a literal reading of “different from or in addition to” would produce. Id. To avoid that result, it decided:

  • “[R]equirement,” as used in §360k(a) should not be given “its widest reasonable meaning” because of the potentially “broad” “scope of the preclusion that would occur.”  Id. at 488-89.  Instead, the lead Lohr opinion held that preemption “was primarily concerned with the problem of specific, conflicting state statutes and regulations rather than the general duties enforced by common-law actions.”  Id. at 489. This result could be inferred from silence in the legislative history.  Id. at 491.
  • Nothing in the “the statutory scheme or the legislative history” – in other words, still more silence – suggested that §510(k) “was intended to do anything other than maintain the status quo,” which included “common-law tort suits,” so the express preemption language could not be taken “literal[ly].”  Id. at 494-95.
  • A parallel violation claim can “be ‘different from’ the [FDA] rules in a literal sense,” but still escape preemption because it is “narrower” than an FDA requirement, “not broader,” by adding a requirement of negligence.  Id. at 495.
  • “The presence of a damages remedy does not amount to the additional or different ‘requirement’ that is necessary under the statute; rather, it merely provides another reason for manufacturers to comply” with FDA requirements.  Id.
  • An FDA regulation, 21 C.F.R. §808.1(d), “interpret[ed] the scope of § 360k’s pre-emptive effect,” and disclaimed preemption of “general” state-law requirements, requiring instead “specific counterpart regulations.  Id. at 496-97.  Lohr gave that regulation “substantial weight” in its preemption analysis.  Id. at 496.
  • “[P]re-emption [can] occur only where a particular state requirement threatens to interfere with a specific federal interest.  State requirements must be ‘with respect to’ medical devices and ‘different from, or in addition to,’ federal requirements.”  Id. at 500.
  • FDA “regulations provide that state requirements of ‘general applicability’ are not pre-empted except where they have ‘the effect of establishing a substantive requirement for a specific device.’  Moreover, federal requirements must be ‘applicable to the device’ in question, and, according to the regulations, pre-empt state law only if they are ‘specific counterpart regulations’ or ‘specific’ to a “particular device.’”  Id.

As to the particular tort claims brought by the plaintiffs in Lohr, the lead opinion further discounted the scope of the substantial equivalence in §510(k), holding that “[t]he 510(k) process is focused on equivalence, not safety,” and “provide[s] little protection to the public.”  Id. at 493 (citation and quotation marks omitted) (emphasis original).  Lohr took the position that this process “did nothing more than compare one device to another, already marketed device, requiring only compliance with ‘general standards,’ the lowest level of protection.”  Id.

Further, substantial equivalence review “did not ‘require’” the design of the product “to take any particular form for any particular reason.”  Id. at 493.  Nor were any “labeling and manufacturing requirements” of §510(k) “‘applicable to the device’ in question” because they were “entirely generic” and were “applicable to a host of different devices.”  Id. at 498-99 (once again relying on 21 C.F.R. §808.1(d)).  “General” state-law product liability claims “are no more a threat to federal requirements than” “fire prevention requirements” or “zoning codes.”  Id. at 501.

Therefore, “few, if any, common-law duties have been pre-empted by this statute.”  Id. at 502.  Even then, to find preemption would “require a careful comparison between the allegedly pre-empting federal requirement and the allegedly pre-empted state requirement.”  Id. at 500.

From the outset uncertainty reigned as to Lohr.  Four justices dissented from the entire rationale that departed from the text of §360k(a), and from the ensuing result, except as to design and violation claims.  Lohr, 518 U.S. at 509, 513 (dissenting opinion).  Justice Breyer’s concurring opinion, necessary to make a majority as to most parts of the opinion, expressly disagreed “that future incidents of MDA pre-emption of common-law claims will be ‘few’ or ‘rare.’”  Id. at 508.  Justice Breyer based his result largely on the FDA’s regulation restricting the scope of the statute’s preemptive effect.  Id. at 505-06.

What happened “next” had actually happened before Lohr, but had not been relevant to Lohr’s 1982-cleared device.  In response to precisely the sort of lack-of-safety-review criticism of the original §510(k) process, as had been leveled by the lead Lohr opinion, Congress rewrote that part of the FDCA in 1990 in what is called the “Safe Medical Devices Act” (“SMDA”).  Lohr mentioned the SMDA in a footnote that addressed none of its implications.  See 518 U.S. at 480 n.4.  Here’s the SMDA’s statutory gobbledygook:  PL 101-629, November 28, 1990, 104 Stat 4511.  After 1990, the new version of §360c(f) read, in pertinent part:

(f) Initial classification and reclassification of certain devices

(1) Any device intended for human use . . . is classified in class III unless–

(A) the device . . . (ii) is substantially equivalent to another device within such type. . . .

(2)(A)(i) Any person who submits a report under section 360(k) [that’s §510k] for a type of device. . . .

(v) . . . may recommend . . . classification in class II, include in the request an initial draft proposal for applicable special controls . . . that are necessary, in conjunction with general controls, to provide reasonable assurance of safety and effectiveness and a description of how the special controls provide such assurance.  Any such request shall describe the device and provide detailed information and reasons for the recommended classification.

(Emphasis original). Thus, the SMDA extended to §510(k) substantial equivalence the same “reasonable assurance of safety and effectiveness” standard that Lohr described as “rigorous” in connection with premarket approval.  518 U.S. at 477.

In the SMDA, all “Class II” devices – the classification for the vast majority of §510(k) devices − were expressly made subject to this “reasonable assurance” standard.  To meet this standard, the SMDA also authorized the FDA to impose a wide variety of device specific “special controls”:

(B) Class II, special controls–

A device which cannot be classified as a class I device because the general controls by themselves are insufficient to provide reasonable assurance of the safety and effectiveness of the device, and for which there is sufficient information to establish special controls to provide such assurance, including the promulgation of performance standards, postmarket surveillance, patient registries, development and dissemination of guidelines . . ., recommendations, and other appropriate actions as the Secretary deems necessary to provide such assurance.  For a device that is purported or represented to be for a use in supporting or sustaining human life, the Secretary shall examine and identify the special controls, if any, that are necessary to provide adequate assurance of safety and effectiveness and describe how such controls provide such assurance.

21 U.S.C. §360c(a)(1)(B) (emphasis added).

The SMDA also revamped the substantial equivalence process itself, expanding 21 U.S.C. §360c(i), defining “substantial equivalence,” so that “safety and equivalence” became an express part of this process.  This statutory section is really long and complex, so here are the most relevant excerpts:

  • Any “different technological characteristics” in a device “demonstrate[ed]” to be “as safe and effective as a legally marketed device,” by “appropriate clinical or scientific data if deemed necessary by the Secretary” “do[] not raise different questions of safety and effectiveness than the predicate device.”  §360c(i)(1)(A)(ii).
  • “[A] submission under section 360(k) of this title . . . shall provide an adequate summary of any information respecting safety and effectiveness.”  §360c(i)(3)(A).

See generally Hall & Mercer, Rethinking Lohr:  Does “SE” Mean Safe and Effective, Substantially Equivalent, or Both?, 13 MINN. J.L. SCI. & TECH. 737, 747-50 (2012) (discussing SMDA).

Thus, at the time Lohr was decided, the SMDA had already rectified most of the lead opinion’s criticism of the earlier §510(k) process – (1) upgrading the regulatory review standard to the “reasonable assurance of safety and equivalence” level that Lohr praised as “rigorous,” (2) imposing on the FDA the duty to evaluate “safety and effectiveness” in its §510(k) evaluations, and (3) providing the Agency with discretionary authority to issue various types of device-specific “special controls.”

The Supreme Court began receding from Lohr in Buckman Co. v. Plaintiffs Legal Committee, 531 U.S. 341 (2001), albeit under an implied preemption rationale.  Buckman also involved §510(k)-cleared devices, as to which the FDA is “empowered to require additional necessary information” to facilitate the agency’s substantial equivalence determinations.  Id. at 348 (citing 21 C.F.R. §870.87(l)).  In Buckman a unanimous Court limited Lohr on two fronts.  First, the Lohr presumption against preemption was avoided because the “dealings with the FDA,” that were central to the plaintiffs’ fraud and violation claims were “inherently federal in character,” so that “no presumption against pre-emption obtains.”  Id. at 348.  Second, Buckman used implied preemption to prune the Lohr’s parallel violation claim rationale considerably.  Another provision of the FDCA, that Lohr’s gestalt analysis of FDCA purpose had somehow overlooked, established the express intent of Congress to preclude private enforcement of the FDCA by plaintiffs alleging violation claims.  “[W]e have clear evidence that Congress intended that the MDA be enforced exclusively by the Federal Government.  21 U.S.C. § 337(a).”  Id. at 352.

[T]he [Lohr] claims arose from the manufacturer’s alleged failure to use reasonable care in the production of the product, not solely from the violation of FDCA requirements.  In the present case, however, the fraud claims exist solely by virtue of the FDCA disclosure requirements.  Thus, although [Lohr] can be read to allow certain state-law causes of actions that parallel federal safety requirements, it does not and cannot stand for the proposition that any violation of the FDCA will support a state-law claim. . . .  “[F]raud-on-the-agency claims . . . would not be relying on traditional state tort law [but] . . . [o]n the contrary, the existence of these federal enactments is a critical element in their case.

Id. at 352-53 (emphasis added).  Thus, violation claims can’t be “solely” based on FDCA infractions, but must “parallel” existing state tort law.  Preemption precludes purported state-law claims that depend on a “federal enactment” as a “critical element” of a private plaintiff’s case.

The Court returned to express preemption in Riegel v. Medtronic, Inc., 552 U.S. 312 (2008).  Further undercutting Lohr, a 7-2 majority dispensed with any presumption against preemption (only the dissent mentioned it, id. at 334).  Riegel viewed Lohr as “disclaim[ing] a conclusion that general federal requirements could never pre-empt” and holding only “that no pre-emption occurred in the case at hand based on a careful comparison between the state and federal duties at issue.”  Id. at 322.  The majority in Riegel thus converted what Lohr had observed about the “rigor” of FDA premarket review into a preemptive holding.  The FDA “grants premarket approval only if it finds there is a ‘reasonable assurance’ of the device’s ‘safety and effectiveness.’”  Id. at 318.

[P]remarket approval is specific to individual devices.  And it is in no sense an exemption from federal safety review − it is federal safety review.  Thus, the attributes that Lohr found lacking in §510(k) review are present here. . . .  [P]remarket approval is focused on safety, not equivalence.  While devices that enter the market through §510(k) have “never been formally reviewed under the MDA for safety or efficacy,” the FDA may grant premarket approval only after it determines that a device offers a reasonable assurance of safety and effectiveness, §360e(d).  And while the FDA does not “‘require’” that a device allowed to enter the market as a substantial equivalent “take any particular form for any particular reason,” the FDA requires a device that has received premarket approval to be made with almost no deviations from the specifications in its approval application, for the reason that the FDA has determined that the approved form provides a reasonable assurance of safety and effectiveness.

Id. at 323 (Lohr citations omitted) (most emphasis added).

Unrestricted by artificial presumptions, Riegel further rejected Lohr’s crabbed view of “requirements” in §360k(a) – “adher[ing] to the dissent in Lohr, and observing that “[i]n interpreting two other statutes we have likewise held that a provision pre-empting state ‘requirements’ pre-empted common-law duties.”  552 U.S. at 324 (citations omitted).  From then on, a statutory “reference to a State’s ‘requirements’ includes its common-law duties.”  Id.  When plaintiffs raised 21 C.F.R. §808.1(d), to which Lohr’s lead opinion and Justice Breyer’s concurrence had deferred, the Riegel majority gave that regulation the back of their collective hands.  It “neither accept[ed] nor reject[ed] the proposition” that a “regulation can properly be consulted to determine the [FDCA’s] meaning,” id. at 329, but blasted this particular regulation as “adding” only “confusion” to the preemption analysis:

[Plaintiffs’] reading of §808.1(d)(1), however, would allow a claim for tortious mislabeling to escape pre-emption so long as such a claim could also be brought against objects other than medical devices.  All in all, we think that §808.1(d)(1) can add nothing to our analysis but confusion.

Id.  That was a 180° reversal of Lohr.  More would follow.

Moreover, the same negative inference from the lead opinion in Lohr, that Congress wouldn’t “without comment, remove all means of judicial recourse” for medical device plaintiffs, didn’t work go over so well in Riegel:

[A]s we have explained, this is exactly what a pre-emption clause for medical devices does by its terms.  The operation of a law enacted by Congress need not be seconded by a committee report on pain of judicial nullification.

Id. at 326 (rejecting Lohr rationale).  Even though the FDA in Riegel supported preemption, the majority “found it unnecessary to rely upon that agency view because we think [§360k(a)] itself speaks clearly to the point at issue.”  Id.  So much for all the ambiguity that Lohr professed to find in the same language.

Finally, Riegel declined to decide anything concerning parallel violation claims, because that issue was waived.  Id. at 330 (plaintiffs “made no such contention in their briefs before the Second Circuit, nor did they raise this argument in their petition for certiorari”).  However, Riegel included some dictum in the paragraph about waiver – “§360k does not prevent a State from providing a damages remedy for claims premised on a violation of FDA regulations; the state duties in such a case ‘parallel,’ rather than add to, federal requirements,” id. – that has been universally converted by the lower courts (probably to the surprise and chagrin of the Riegel majority) into an endorsement of the concept of “parallel claims,” something that the Riegel Court in fact declined to decide.

Next, in Wyeth v. Levine, 555 U.S. 555 (2009), a prescription drug implied preemption case not dealing with anything analogous to §360k(a), the presumption against preemption was back in full force.  “[I]]n all pre-emption cases, and particularly in those in which Congress has ‘legislated . . . in a field which the States have traditionally occupied,’ . . . we ‘start with the assumption that the historic police powers of the States were not to be superseded by the Federal Act unless that was the clear and manifest purpose of Congress.’” Id. at 565 (quoting Lohr, 518 U.S. at 485).  Since Levine dealt with implied preemption and drugs, as opposed to express preemption and medical devices, not much else in Levine is particularly relevant to this post.  For completeness, here is a list of every Lohr citation in the 6-3 majority opinion in Levine:

  • “While agencies have no special authority to pronounce on pre-emption absent delegation by Congress, they do have a unique understanding of the statutes they administer”  Id. at 576-77 (citing Lohr).

That’s it − only this one other Lohr citation in Levine.  Moreover,  the agency deference decision in Levine was not at all supportive of the deference that Lohr accorded the Agency’s regulation:

[T]he Court has performed its own conflict determination, relying on the substance of state and federal law and not on agency proclamations of pre-emption.

Id. at 576.  Otherwise, the majority in Levine evidently did not think that Lohr was particularly relevant to any substantive preemption points, and to that extent we agree.

PLIVA, Inc. v. Mensing, 564 U.S. 604 (2011) (“Mensing”), like Levine, involved implied preemption and prescription drugs, finding preemption extended to bar common-law warning claims concerning generic drugs.  For present purposes, that aspect of Mensing doesn’t matter.  What does matter is that a majority of the Court refused outright to place reliance on an FDA regulation to interpret the preemptive scope of the FDCA.  Mensing completely rejected this pillar of the Lohr decision:

Although we defer to the [FDA’s] interpretation of its regulations, we do not defer to an agency’s ultimate conclusion about whether state law should be pre-empted.

Id. at 613 n.3 (citing Levine, 555 U.S. at 576).

Mensing also rejected Lohr’s refusal to take Congress at its preemptive word.  If the manner in which Congress wrote the statute included broad preemption, the Court would not usurp the power of Congress to “fix” what Congress did:

[I]t is not this Court’s task to decide whether the statutory scheme established by Congress is unusual or even bizarre. . . .  We will not distort the Supremacy Clause in order to create similar pre-emption across a dissimilar statutory scheme.  As always, Congress and the FDA retain the authority to change the law and regulations if they so desire.

Id. at 625-26 (citation and quotation marks omitted).

In 2015, a then-obscure appellate judge named Gorsuch decided the PMA medical device preemption case Caplinger v. Medtronic, Inc., 784 F.3d 1335 (10th Cir. 2015).  Judge (now Justice) Gorsuch thus had a close encounter with the mess that Lohr’s refusal to interpret §360k(a)’s preemptive language according to its terms had created over the course of (then) almost two decades.  We’ve already discussed these observations at length, so we’ll only hit the highlights here – in another set of bullet points:

  • Congress “[e]xercis[ed] its authority under the Supremacy Clause” in enacting 21 U.S.C. §360k(a).  Caplinger, 784 F.3d at 1336.
  • “Section 360k(a) preempts ‘any requirement’ imposed by states on manufacturers that differs from or adds to those found in the FDCA.  Given this expansive language one might be forgiven for thinking all private state law tort suits are foreclosed.”  Id. at 1337.
  • Since Lohr, judges have “struggle[d]” to make sense of medical device preemption, since The Supreme Court’s “divergent views” about §360k(a) have “yielded considerable ‘uncertainty’ among the lower courts.”  Id. at 1337-38.
  • The “damages remedy” that Lohr found not “different from” FDCA requirements is “nowhere provided for in federal law.”  Id. at 1338.
  • Lohr’s parallel claims analysis “doesn’t appear in the statute, so its meaning was left entirely to judicial exposition.”  Id.
  • “Now, you might ask, why isn’t a narrower state law requirement at least ‘different from’ a broader federal requirement − and thus preempted by §360k(a)’s express terms?  The Lohr majority acknowledged that a state duty imposing a ‘narrower requirement’ is indeed ‘different from’ the federal rules in a literal sense.’  And when it comes to interpreting the text of a statute, that’s often the sense that matters most.”  Id.
  • “[A]gain read literally, it would seem ‘any’ federal requirement imposed by the FDCA is capable of preempting any different or additional state requirement.  But again the Lohr majority held otherwise,” and instead required a “regulation ‘specific’ to a ‘particular device.’”  Id. at 1339.
  • Despite the “clear” language of 21 U.S.C. §337(a), “lower courts must now accept . . . the notion that §360k(a) permits private tort suits that do no more than parallel the MDA.”  Id.
  • All three subsequent Supreme Court decisions – Buckman, Riegel, and Levine – “cut back on the scope of [Lohr’s] initial decision” and “retreated from” Lohr’s rationale.  Id. at 1339-40.
  • “It’s no small mystery why the same word – ‘any’ − should bear such different meanings in two such similar clauses that lie cheek by jowl in the same statutory subsection.”  Id. at 1340.
  • “[W]e may find the state law claim preempted only if there exists a device-specific federal requirement, though this test admittedly finds no analogue when it comes to the state requirement clause interpreted in Riegel.”  Id.
  • Section 360k(a) “specifies its preemptive reach plainly and broadly: any state requirement that adds to federal requirements and that relates to the safety or effectiveness of the device is preempted. No other qualification exists.”  Id. at 1345.
  • “[I]t is not for this court to revise [§360k(a)] by beating a new path around preemption nowhere authorized in the text of the statute.”  Id. at 1347.
  • Not just pre-market approval, but “something like it,” should have preemptive effect.  Id. at 1339.

Thus, with respect to Lohr, Judge Gorsuch couldn’t “help but wonder if perhaps some of those rules warrant revisiting and reconciliation.”  Caplinger, 784 F.3d at 1340.  We think that’s a great idea – the sooner the better.

Then, in Lohr’s twentieth anniversary year, the decision’s most important doctrinal underpinning was flat out overruled.  As we’ve also discussed before, the Supreme Court abolished the presumption against preemption in express preemption cases where Congress has included language explicit preemption language such as §360k(a):

The plain text of the [preemption clause] begins and ends our analysis. . . .  And because the statute contains an express pre-emption clause, we do not invoke any presumption against pre-emption but instead focus on the plain wording of the clause, which necessarily contains the best evidence of Congress’ pre-emptive intent.

Puerto Rico v. Franklin California Tax-Free Trust, ___ U.S. ___, 136 S. Ct. 1938, 1946 (2016) (“Franklin”).  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).

That turned out the lights on Lohr.

Bringing the chronology to a close, earlier this year, the FDA itself reiterated that “safety and effectiveness” was baked into the §510(k) “substantial equivalence” review process by the SMDA.  See FDA, “Public Health Interests and First Amendment Considerations Related to Manufacturer Communications Regarding Unapproved Uses of Approved or Cleared Medical Products” (Jan. 17, 2017).  Thus, the FDA recognizes that “principles of safety and effectiveness underlie the substantial equivalence determination in every 510(k) review.”  FDA memo at 44 (footnote omitted).  Again, we discussed this development in detail when it happened, so we’ll simply summarize the FDA’s views here:

  • While “approval application (PMA) . . . and 510(k)) differ in various ways, they all . . . enable[] FDA to ensure that devices on the market are ones that have been determined by FDA to have a reasonable assurance of safety and effectiveness.”  Id. at 40.
  • “Congress . . . required FDA to evaluate whether a new device is as safe and effective as a predicate device.”  Id. at 44 n.137 (specifically discussing SMDA).
  • Under §510(k), “[c]lassification determinations must be based on an evaluation of the safety and effectiveness of the device.”  Id. at 41.
  • “Class II devices are devices for which general controls, by themselves, are insufficient to provide reasonable assurance of the safety and effectiveness of the device, and for which there is sufficient information to establish special controls necessary to provide such assurance.”  Id. at 41 n.122.
  • “During the 510(k) review, FDA considers the device’s safety and effectiveness in its substantial equivalence determination.”  Id. at 43.
  • [T]he 510(k) . . . review process reflects a determination of the level of control necessary to provide a ‘reasonable assurance of safety and effectiveness.’”  Id. at 44-45.

While the FDA’s 2017 public position on the nature of §510(k) clearance should be quite sufficient, since the SMDA was enacted in 1990 the FDA has issued a variety of other documents that contain similar statements.  For instance, in the currently posted discussion of “Regulatory Controls” on the FDA’s website, the description of “special controls” for “class II devices” makes clear that:  (1) “[s]pecial controls are regulatory requirements,” and (2) “Special controls are usually device-specific.”  The FDA’s “design control” regulation, 21 C.F.R. §820.30(a)(1), provides that, “[e]ach manufacturer of any . . . class II device . . . shall establish and maintain procedures to control the design of the device in order to ensure that specified design requirements are met.”  This regulation imposes additional requirements on design “development,” “input,” “output,” “review,” “verification,” “validation,” “transfer,” “changes,” and “history.”  Id. §§820.30(d-j).

Just the other day the FDA issued a guidance document on when a change to a §510(k) device requires submission of a new notification to the Agency.  That guidance reiterates that “whether submission of a new 510(k) is required depends on whether the change could significantly affect the safety or effectiveness of the device.”  FDA, “Deciding When to Submit a 510(k) for a Change to an Existing Device,” Guidance for Industry, at 8 (Oct. 25, 2017).  Likewise, an FDA working report from 2010 recognized:

[T]he 510(k) program has changed significantly since its inception.  The MDA established the premarket notification process as a simple check to assure proper device classification.  Through various statutory and regulatory modifications over time, it has become a multifaceted premarket review process that is expected to assure that cleared devices, subject to general and applicable special controls, provide reasonable assurance of safety and effectiveness, and to facilitate innovation in the medical device industry.

FDA, “CDRH Preliminary Internal Evaluations – Volume I, 510(k) Working Group Preliminary Report & Recommendations, at 34 (Aug. 2010) (§4.4 “The Current 510(k) Program”) (available online here) (emphasis added).  In many instances, device specific FDA guidance, regulatory manuals, and other similar documents will provide additional regulatory proof of actual preemptive requirements imposed by the Agency upon particular devices or device types.

At this point, Lohr plainly has two shadows from a jurisprudential perspective.  Essentially all of the propositions upon which its anti-preemptive rationale was based have been changed by Congress, or overruled by subsequent Supreme Court decisions.

First, The SMDA applied the same pre-market approval “reasonable assurance of safety and effectiveness” standard to §510(k) and gave the FDA the tools – a broad selection of “special controls” −  to create the kind of “device specific” controls that preemption under Lohr required.  The FDA has recognized on many occasions that safety and effectiveness is at the core of modern “substantial equivalence” determinations.

Second, Riegel held that the identical “rigorous” “reasonable assurance of safety and effectiveness” standard of FDA safety review is broadly preemptive.

Third, Franklin outright abolished the central guiding principle in Lohr − the presumption against preemption in express preemption cases is no more.

Fourth, Lohr’s gestalt approach allowing diffuse, general Congressional purpose to override preemptive statutory provisions has been rejected in Riegel and Mensing.  If the statute’s language requires preemption, then that is what Congress “intended” – unless and until Congress changes it.

Fifth, Lohr’s reliance on an agency regulation to constrict the preemptive scope of that agency’s organic statute was questioned in Riegel and Levine before being rejected outright in Mensing.

Sixth, to the extent that Lohr distinguished state statutory/regulatory enactments and state common law in interpreting “requirements” as that term was used in §360k(a), Riegel definitively rejected that distinction.

SeventhLohr’s “parallel” claim analysis was restricted in Buckman, and avoided as waived in Riegel.  Justice Gorsuch hates all the extra-textual hair splitting that has sprung up around the Riegel dictum, and as a result appears to be the kind of advocate we would want on Court for reconsidering and overruling Lohr.

So what do we need?

We need good cases – not kamikaze motions in MDLs with institutional (at least) bias against preemption.  We need cases where the FDA has, in fact, imposed device-specific special controls that specify design, warnings, clinical testing, and other relevant attributes of §510(k) medical devices.  Only in such carefully selected cases, and after the compilation of a full regulatory record, will the “careful comparison” that even Lohr recognized could lead to preemption be able carry the day for the defense.  That may change later on, once preemption becomes better established in post-SMDA §510(k) cases, but for now we’re not doing ourselves any favors making preemption motions on threadbare records or before judges predisposed to reject preemption arguments.

Lohr should be dead.  Long live preemption.

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

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

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

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

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

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

No more.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

**********

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

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

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

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

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

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

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

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

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

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

 

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

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

For the full post, go here.

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

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

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

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

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

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

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

Id. at 11-12 (footnote omitted).

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

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

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

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

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

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

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

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

 

Last week, the United States Supreme Court also heard argument in the “other” litigation tourist personal jurisdiction case pending before it – BNSF Railway Co. v. Tyrell, No. 16-405 (U.S. argued April 25, 2017) (“BNSF”) (link to transcript).  While BNSF mostly concerned statutory issues under the Federal Employees Liability Act (“FELA”), it does involve a personal jurisdiction question related to litigation tourism.  The Court considered it sufficiently related to BMS that it scheduled oral argument back-to-back with BMS (see here for last week’s post on the BMS oral argument).  Because we’re interested in personal jurisdiction as a constitutional check on the litigation tourism phenomenon, we’ve also taken a look at what went down during the BNSF argument.

Once again the United States government appeared as amicus supporting the defense.  Tr. at 1, 12-18.  It appears to us that the plaintiff in BNSF had an even tougher time before the Court than the plaintiffs in BMS – and that’s saying something.  Another perhaps notable aspect of the oral argument was that the Justices, particularly as to the defense and defense-supporting United States arguments, were a lot less engaged than in BMS.  These counsel actually argued for entire pages of transcript without being interrupted by questions.  Indeed, the defendant’s rebuttal argument in BNSF drew no questions at all, and thus the defense used only a fraction of its reserved time.  Id. at 43-44.  The entire BNSF transcript was 44 pages – 20 pages (almost 1/3) shorter than BMS.

Justice Sotomayor, the sole dissenter from the personal jurisdiction rationale in Daimler AG v. Bauman, 134 S.Ct. 746 (2014), seemed most animated when discussing an issue that was not even before the Court in BNSF – nonconsensual “consent” to general jurisdiction by virtue of mere registration to do business in a state.  Tr. at 4-6.  We’ve written on this Bauman dodge before, and were somewhat perplexed to see it arise in a United States Supreme Court argument – until we heard from Chief Justice Roberts:  “[T]he issue . . . was not addressed below and is not before us.”  Id. at 6.  Whew!   We thought we’d missed something significant.

The heart of the plaintiff’s argument was that FELA, in provisions that spoke only to venue (it’s a peculiar statute in that it allows plaintiffs to choose to bring federal claims in state court), somehow also authorized an expanded form of personal jurisdiction that permitted litigation tourism.  We gathered from the argument that the plaintiff was a North Dakota resident claiming workplace injuries in Washington State, id. at 40 – so of course, he sued the defendant in Montana, which was neither the defendant’s principal place of business nor its state of incorporation.

Since BNSF was a statutory case, the Court was interested in whether Congress could authorize litigation tourism by statute.  The defense response was that Congress could authorize nationwide service of process allowing expanded federal court jurisdiction, should it choose to create a federal cause of action, but that Due Process would render problematic any attempt to expand state-court personal jurisdiction to accommodate litigation tourists.  Tr. at 8.  The fundamental problem with the plaintiff’s statutory argument was put most succinctly by the Assistant Solicitor General arguing for the government:

[T]here’s a strong Federal interest in not having words that don’t say anything about service of process being interpreted to in fact say something about service of process[.  W]e have a first sentence that refers to venue only in Federal courts, and then a second sentence referring to State courts.  But all it does is to clarify that there’s concurrent jurisdiction in the State courts.  And we just don’t see how you can get to conferral of personal jurisdiction in the State courts.

Tr. at 13.

Nobody, not even Justice Sotomayor, the justice most sympathetic to litigation tourism, seemed comfortable with that argument. The statutory argument was criticized by:

Chief Justice Roberts:  Tr. at 23-24, 29-30.

Justice Ginsburg:  Id. at 19-20, 31, 40.

Justice Alito:  Id. at 25-26.

Justice Sotomayor never appeared inclined to support plaintiff’s statutory argument in BNSF.  Rather, she suggested that “we could just say it [FELA §56] doesn’t apply to State courts,” id. at 37 – which was precisely where the plaintiff had sued.

So, aside from the seemingly doomed argument that FELA should be interpreted to say what it didn’t say – and apparently what no federal statute has ever provided – about personal jurisdiction/service of process, what did the argument have to say about Bauman and Due Process?

The government argued that “[i]f the Court’s decisions in Goodyear and Daimler mean anything,” it “just can’t be correct” that “a company like BNSF is subject to general personal jurisdiction in 28 or more States.”  Tr. at 14.  Justice Breyer did not “really see the difference” between Bauman and BNSF.  Id. at 38-39.  Justice Kagan tried to limit the plaintiff’s non-statutory personal jurisdiction argument to railroads being “so unique that they should be subject to general jurisdiction everywhere.”  Id. at 32.  After some hemming and hawing plaintiff agreed, id. at 34, but plaintiff seemed even more interested in a fact-specific, Montana-only exercise of Bauman personal jurisdiction.  Id. at 33, 36 (arguing that the defendant was “at home” because it had Montana “lobbyists”).  Unlike the plaintiffs in BMS, the plaintiff in BNSF was never so bold as to call for overruling Bauman.

Finally, when pushed by Justice Gorsuch, plaintiff abandoned altogether the argument that Bauman be limited to “foreign corporations.”  Id. at 41-42.

We’ve been burned making Supreme Court predictions before, but we frankly can’t see a path to affirmance for the plaintiff in BNSF.  It could well be a unanimous reversal of the Montana Supreme Court, albeit with at least one concurrence offering a different rationale (similar to Bauman).