We’ve previously blogged about Bristol-Myers Squibb v. Superior Court (“BMS”), in which the Supreme Court granted certiorari to review a decision of the California Supreme Court that adopted an unusual—and extraordinarily expansive—view of California courts’ power to exercise specific personal jurisdiction over a defendant.
We filed an amicus brief on behalf of the Chamber of Commerce of the United States of America, the California Chamber of Commerce, the American Tort Reform Association, and the Civil Justice Association of California, arguing that the California court’s holding conflicted with numerous Supreme Court decisions making clear that in order to invoke specific jurisdiction, a plaintiff’s claims must arise out of the defendant’s in-state conduct. (The views in this post are ours, and not those of our clients.)
The case was argued in April, and the Court announced its decision today. The result is an 8-1 opinion rejecting the California Supreme Court’s approach and, in our view, recognizing important limits imposed by the Fourteenth Amendment’s due process clause on the ability of courts to adjudicate cases that aggregate the claims of plaintiffs from many jurisdictions.
The immediate impact of the decision is to limit the forums where nationwide mass actions in state court can proceed to those states in which the defendant is subject to general jurisdiction (usually the state of incorporation and principal place of business). In addition, as we discuss below, the decision raises substantial questions about whether nationwide class actions can proceed in jurisdictions where a defendant is not subject to general jurisdiction.
The question presented in BMS involves specific jurisdiction, which is one of two forms of personal jurisdiction—the doctrine that permits a court to exercise its power over the “person” of a defendant. Specific jurisdiction empowers a court to adjudicate particular claims relating to a defendant’s conduct within or relating to the forum; in order to be subject to specific jurisdiction, the defendant must have established contacts with the forum, and the lawsuit must arise out of those contacts.
As the Supreme Court put it in Walden v. Fiore, its most recent decision on the scope of specific jurisdiction: “[f]or a State to exercise jurisdiction consistent with due process, the defendant’s suit-related conduct must create a substantial connection with the forum State.” That is why the BMS Court termed specific jurisdiction “case-linked”—in contrast to “all-purpose” general jurisdiction, which allows a court to “hear any claim against that defendant, even if all the incidents underlying the claim occurred in a different State.”
In BMS, 592 plaintiffs who reside outside California joined together with 86 California resident plaintiffs to sue BMS in California, asserting various product-defect claims based on their use of BMS’s blood-thinning drug Plavix.
BMS moved to dismiss the out-of-State plaintiffs’ claims for lack of personal jurisdiction, arguing that California lacked specific jurisdiction over these plaintiffs’ claims because none of the events relevant to their claim occurred in California: they did not take the drug in California, it was not marketed to them in California, and it was not designed or manufactured in California. But the California Supreme Court held that California courts could exercise specific jurisdiction over these claims. It took the position that specific jurisdiction does not require that a plaintiff’s claims “arise directly from the defendant’s forum contacts” or be causally linked to those contacts in any way. Instead, the court held, it was sufficient that the in-state and out-of-state plaintiffs’ claims were “based on the same allegedly defective product and the assertedly misleading marketing and promotion of that product” as part of a “common nationwide course of distribution.”
The Court’s Decision
The Supreme Court reversed the California Supreme Court by a vote of 8-1. Writing for the majority, Justice Alito emphasized that “specific jurisdiction is confined to adjudication of issues deriving from, or connected with, the very controversy that establishes jurisdiction.” If a state has no “legitimate interest” in particular claims, a defendant should not be forced to “submit to the coercive power” of the state with respect to those claims.
Justice Alito explained that specific jurisdiction therefore requires “a connection between the forum and the specific claims at issue.” “When there is no such connection,” he stated, “specific jurisdiction is lacking regardless of the extent of a defendant’s unconnected activities in the State.”
Applying that requirement, the majority held that California could not exercise specific jurisdiction over BMS with respect to the nonresidents’ claims. The nonresidents did not “claim to have suffered harm in” California, and “all the conduct giving rise to [their] claims occurred elsewhere.” Moreover, because specific jurisdiction cannot be based on activities “unconnected” with the claims at issue, “[t]he mere fact that other plaintiffs were prescribed, obtained, and ingested Plavix in California— and allegedly sustained the same injuries as did the nonresidents,” or that “BMS conducted research in California on matters unrelated to Plavix,” was irrelevant to specific jurisdiction.
Implications for Mass and Class Actions
The BMS decision reaffirms long-settled limits on personal jurisdiction. It makes clear that lower courts may not loosen the rules governing “case-linked” specific jurisdiction in the wake of the Court’s decision in Daimler (reaffirmed last month in BNSF Railway Co. v. Tyrrell) emphasizing the strict limits on “all-purpose” general jurisdiction.
One issue left open by the decision is how much of a connection between a plaintiff’s claims and the forum state is required to permit the assertion of specific jurisdiction. The Court did not have to decide that issue because there was no connection at all between California and the claims of the non-California plaintiffs. But the question of what connection is required will certainly arise in the future.
We proposed one answer in a separate amicus brief for the Chamber supporting the cert petition in GlaxoSmithKline, LLC v. M.M. ex rel. Meyers, another case challenging a lower court’s broad assertion of specific jurisdiction. We explain that a court should:
- Identify the defendant’s purposeful claim-related activity within the forum;
- Determine whether that activity gave rise to the plaintiff’s claim; and
- Assess whether the causal connection between the activity and the claim is sufficient to create the “substantial connection” that due process requires.
As part of the last inquiry, the court should consider both (a) whether the in-forum activity is sufficient to support the conclusion that the obligation underlying the suit was incurred there, and (b) whether permitting an assertion of specific jurisdiction based on that activity will intrude on the sovereignty of other States, because one or more States have a significantly greater connection to the underlying obligation than the forum State. The latter consideration is particularly appropriate in light of the BMS Court’s focus on the forum state’s “legitimate interest in the claims in question”—“[a]s we have put it,” the Court said, “restrictions on personal jurisdiction ‘are more than a guarantee of immunity from inconvenient or distant litigation. They are a consequence of territorial limitations on the power of the respective States.’”
Another issue likely to gain substantial attention is how personal jurisdiction applies in the class action context.(Justice Sotomayor flagged the issue in footnote 4 of her dissent.) Some courts have held that as long as the forum State may exercise specific jurisdiction over the named plaintiffs’ claims, it automatically may also adjudicate the claims of the absent class members—even if it would not be able to exercise specific jurisdiction if the absent class members’ claims were asserted in a separate case. That reasoning is significantly undermined by today’s decision, which squarely held that “[t]he mere fact that other plaintiffs” could invoke case-specific jurisdiction in California—because they obtained and ingested the drug in California—“does not allow the State to assert specific jurisdiction over the nonresidents’ claims.”
The Supreme Court has repeatedly explained—both under the Rules Enabling Act (which is the basis for Federal Rule of Civil Procedure 23’s authorization of class actions) and (by extension) as a matter of due process—that the class action device cannot alter the substantive legal standards applicable to a claim, and in particular cannot deprive a defendant of defenses that would be available against absent class members. That principle, combined with the reasoning of today’s decision, provides class action defendants with powerful arguments to challenge class actions filed in states that cannot exercise personal jurisdiction with respect to absent class members’ claims. After all, if the nonresidents’ claims in BMS could not proceed on the theory that aggregation with the California residents’ claims through joinder established personal jurisdiction, it is hard to see how the combination of such claims in a class action (another form of joinder) could be treated differently.
A final issue left open by BMS is whether the Fifth Amendment’s due process requirement might apply differently to exercises of jurisdiction by federal courts. But this issue does not arise frequently. For the Fifth Amendment to apply, Congress must provide for expansive personal jurisdiction by authorizing nationwide service of process in a particular statute—and Congress rarely does this, as the Court explained in the BNSF decision last month in rejecting the argument that the federal statute there (the Federal Employers’ Liability Act) expanded federal courts’ power to exercise personal jurisdiction.