Bristol-Myers-Squibb (“BMS”) manufactures Plavix, a prescription drug used to inhibit blood clotting. In the eight amended complaints filed in the San Francisco Superior Court, 86 California residents and 592 residents of 33 other states sued BMS and McKesson Corporation, a pharmaceutical distributor headquartered in California, for injuries allegedly arising out of their use of Plavix. Outside of California, the largest number of plaintiffs resided in Texas, with 92 plaintiffs, followed by Ohio, with 71 plaintiffs.
Each amended complaint contains the same causes of action: (1) strict products liability (based on both design defect and manufacturing defect); (2) negligence; breach of implied warranty; (3) breach of express warranty; (4) deceit by concealment (Civ. Code, §§ 1709, 1710); (5) negligent misrepresentation; (6) fraud by concealment; (7) unfair competition (Bus. & Prof. Code, § 17200); (8) false or misleading advertising (Bus. & Prof. Code, § 17500); (9) injunctive relief for false or misleading advertising (Civ. Code, § 1750 et. seq.); (10) wrongful death; and (11) loss of consortium.
BMS moved to quash service of summons on the ground that the court lacked personal jurisdiction over it to adjudicate the claims of the 592 nonresident plaintiffs, who are real parties in interest in this proceeding (hereafter referred to as the “nonresident plaintiffs”). BMS noted that the plaintiffs’ allegations do not include any factual claims that the nonresident plaintiffs‘ injuries occurred in
California or that they had been treated for their injuries in California.
The San Francisco Superior Court denied BMS‘s motion to quash service of summons, concluding the company‘s sales and other activities in California were sufficiently extensive to subject it to the general jurisdiction of the state courts. BMS petitioned the Court of Appeal for the First Appellate District for a writ of mandate, naming the nonresident plaintiffs as real parties in interest.
The Court of Appeal first summarily denied the petition on the same day as the United States Supreme Court announced its decision in Daimler AG v. Bauman (2014) 571 U.S. ___ [134 S.Ct. 746], whereby the Court clarified the limits on general jurisdiction.
Thereafter, the California Supreme Court granted review and transferred the matter back to the Court of Appeal for issuance of an Order to Show Cause in light of the Daimler decision. After briefing and oral argument, the Court of Appeal again denied the writ, this time by an opinion that held that BMS‘s activities in California were insufficient to subject it to general jurisdiction in the state, but that, given the nature of the action and BMS‘s activities in California, the courts may properly exercise specific jurisdiction over BMS.
The California Supreme Court granted BMS‘s petition for review, requesting briefing on both types of personal jurisdiction, general and specific.
In mass tort cases under California law, when non-resident plaintiffs are suing non-resident defendants with claims that are parallel to resident plaintiffs, does a court have personal jurisdiction, specifically:
- Whether after Daimler AG v. Bauman, 571 U.S. ––––, 134 S.Ct. 746, 187 L.Ed.2d 624 (2014), general jurisdiction exists?
- Whether specific jurisdiction exists?
- No, general jurisdiction does not exist.
- Yes, specific jurisdiction does exist.
- General Jurisdiction
Although the company‘s ongoing activities in California are substantial, they fall far short of establishing that is it at home in this state for purposes of general jurisdiction. . . . In assessing [defendant’s] California business activities in comparison to the company‘s business operations “in their entirety, nationwide,” we find nothing to warrant a conclusion that it is at home in California. As the U.S. Supreme Court warned in Daimler AG v. Bauman, to conclude that defendant may be sued in California on any cause of action, whether or not related to its activities here, under a theory of general jurisdiction, would be to extend globally the adjudicatory reach of every state in which the company has significant business operations.
- Specific Jurisdiction
Specific personal jurisdiction is based on a “minimum contacts” analysis. This requires that the litigation “arise out of or [be] connected with the [company‘s] activities within the state.” International Shoe Co. v. Washington, 326 U.S. 310, 316 (1945). Under this analysis, jurisdiction is only precluded by an assertion that would violate “traditional notions of fair play and substantial justice.” Id. The Court also provided that the due process language is pliable enough to allow “jurisdiction for disputes unrelated to [the company’s] California transactions.” All the nonresident plaintiffs in a mass tort situated in California have to do is make the same allegations as a California resident, concurrently with the California resident.
California requires courts to evaluate the nature of a defendant‘s activities in the forum and the relationship of the claim to those activities in order to answer the ultimate question under the due process clause—whether the exercise of jurisdiction in the forum is fair. Under the substantial connection test, the intensity of forum contacts and the connection of the claim to those contacts are inversely related. Essentially, the more wide-ranging the defendant‘s forum contacts are, the more likely it can be shown that there is a connection between the forum contacts and the claim.
Both the resident and nonresident plaintiffs‘ claims are based on the same allegedly defective product and the purportedly misleading marketing and promotion of that product, which allegedly caused injuries in and outside the state. Thus, the Court held that the nonresident plaintiffs’ claims bear a substantial connection to defendant’s contacts in California. The Court found that the defendant’s nationwide marketing, promotion, and distribution of the drug created a substantial nexus between the nonresident plaintiffs’ claims and the company’s contacts in California concerning that drug.