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Bristol-Myers Squibb Co. v. Superior Court of California

United States Supreme Court

June 19, 2017

BRISTOL-MYERS SQUIBB COMPANY, PETITIONER
v.
SUPERIOR COURT OF CALIFORNIA, SAN FRANCISCO COUNTY, ET AL.

          Argued April 25, 2017

         ON WRIT OF CERTIORARI TO THE SUPREME COURT OF CALIFORNIA

         A group of plaintiffs, most of whom are not California residents, sued Bristol-Myers Squibb Company (BMS) in California state court, alleging that the pharmaceutical company's drug Plavix had damaged their health. BMS is incorporated in Delaware and headquartered in New York, and it maintains substantial operations in both New York and New Jersey. Although it engages in business activities in California and sells Plavix there, BMS did not develop, create a marketing strategy for, manufacture, label, package, or work on the regulatory approval for Plavix in the State. And the nonresident plaintiffs did not allege that they obtained Plavix from a California source, that they were injured by Plavix in California, or that they were treated for their injuries in California.

The California Superior Court denied BMS's motion to quash service of summons on the nonresidents' claims for lack of personal jurisdiction, concluding that BMS's extensive activities in the State gave the California courts general jurisdiction. Following this Court's decision in Daimler AG v. Bauman, 571 U.S.___, the State Court of Appeal found that the California courts lacked general jurisdiction. But the Court of Appeal went on to find that the California courts had specific jurisdiction over the claims brought by the nonresident plaintiffs. Affirming, the State Supreme Court applied a "sliding scale approach" to specific jurisdiction, concluding that BMS's "wide ranging" contacts with the State were enough to support a finding of specific jurisdiction over the claims brought by the nonresident plaintiffs. That attenuated connection was met, the court held, in part because the nonresidents' claims were similar in many ways to the California residents' claims and because BMS engaged in other activities in the State.

         Held: California courts lack specific jurisdiction to entertain the nonresidents' claims. Pp. 4-12.

(a) The personal jurisdiction of state courts is "subject to review for compatibility with the Fourteenth Amendment's Due Process Clause." Goodyear Dunlop Tires Operations, S. A. v. Brown, 564 U.S. 915, 918. This Court's decisions have recognized two types of personal jurisdiction: general and specific. For general jurisdiction, the "paradigm forum" is an "individual's domicile, " or, for corporations, "an equivalent place, one in which the corporation is fairly regarded as at home." Id., at 924. Specific jurisdiction, however, requires "the suit" to "aris[e] out of or relat[e] to the defendant's contacts with the forum." Daimler, supra, at___(internal quotation marks omitted).
The "primary concern" in assessing personal jurisdiction is "the burden on the defendant." World-Wide Volkswagen Corp. v. Woodson, 444 U.S. 286, 292. Assessing this burden obviously requires a court to consider the practical problems resulting from litigating in the forum, but it also encompasses the more abstract matter of submitting to the coercive power of a State that may have little legitimate interest in the claims in question. At times, "the Due Process Clause, acting as an instrument of interstate federalism, may . . . divest the State of its power to render a valid judgment." Id., at 294. Pp. 4-7.
(b) Settled principles of specific jurisdiction control this case. For a court to exercise specific jurisdiction over a claim there must be an "affiliation between the forum and the underlying controversy, principally, [an] activity or an occurrence that takes place in the forum State." Goodyear, supra, at 919 (internal quotation marks and brackets omitted). When no such connection exists, specific jurisdiction is lacking regardless of the extent of a defendant's unconnected activities in the State. The California Supreme Court's "sliding scale approach"-which resembles a loose and spurious form of general jurisdiction-is thus difficult to square with this Court's precedents. That court found specific jurisdiction without identifying any adequate link between the State and the nonresidents' claims. The mere fact that other plaintiffs were prescribed, obtained, and ingested Plavix in California does not allow the State to assert specific jurisdiction over the nonresidents' claims. Nor is it sufficient (or relevant) that BMS conducted research in California on matters unrelated to Plavix. What is needed is a connection between the forum and the specific claims at issue. Cf. Walden v. Fiore, 571 U.S.___. Pp. 7-9.
(c) The nonresident plaintiffs' reliance on Keeton v. Hustler Magazine, Inc., 465 U.S. 770, and Phillips Petroleum Co. v. Shutts, 472 U.S. 797, is misplaced. Keeton concerned jurisdiction to determine the scope of a claim involving in-state injury and injury to residents of the State, not, as here, jurisdiction to entertain claims involving no in-state injury and no injury to residents of the forum State. And Shutts, which concerned the due process rights of plaintiffs, has no bearing on the question presented here. Pp. 9-11.
(d) BMS's decision to contract with McKesson, a California company, to distribute Plavix nationally does not provide a sufficient basis for personal jurisdiction. It is not alleged that BMS engaged in relevant acts together with McKesson in California or that BMS is derivatively liable for McKesson's conduct in California. The bare fact that BMS contracted with a California distributor is not enough to establish personal jurisdiction in the State. Pp. 11-12.
(e) The Court's decision will not result in the parade of horribles that respondents conjure up. It does not prevent the California and out-of-state plaintiffs from joining together in a consolidated action in the States that have general jurisdiction over BMS. Alternatively, the nonresident plaintiffs could probably sue together in their respective home States. In addition, since this decision concerns the due process limits on the exercise of specific jurisdiction by a State, the question remains open whether the Fifth Amendment imposes the same restrictions on the exercise of personal jurisdiction by a federal court. P. 12.

Cal. 5th 783, 377 P.3d 874, reversed and remanded.

          ALITO, J., delivered the opinion of the Court, in which ROBERTS, C. J., and Kennedy, Thomas, Ginsburg, Breyer, Kagan, and Gorsuch, JJ., joined. SOTOMAYOR, J., filed a dissenting opinion.

          OPINION

          ALITO JUSTICE.

         More than 600 plaintiffs, most of whom are not California residents, filed this civil action in a California state court against Bristol-Myers Squibb Company (BMS), asserting a variety of state-law claims based on injuries allegedly caused by a BMS drug called Plavix. The California Supreme Court held that the California courts have specific jurisdiction to entertain the nonresidents' claims. We now reverse.

         I

         A

         BMS, a large pharmaceutical company, is incorporated in Delaware and headquartered in New York, and it maintains substantial operations in both New York and New Jersey. 1 Cal. 5th 783');">1 Cal. 5th 783, 790, 377 P.3d 874, 879 (2016). Over 50 percent of BMS's work force in the United States is employed in those two States. Ibid.

         BMS also engages in business activities in other jurisdictions, including California. Five of the company's research and laboratory facilities, which employ a total of around 160 employees, are located there. Ibid. BMS also employs about 250 sales representatives in California and maintains a small state-government advocacy office in Sacramento. Ibid.

         One of the pharmaceuticals that BMS manufactures and sells is Plavix, a prescription drug that thins the blood and inhibits blood clotting. BMS did not develop Plavix in California, did not create a marketing strategy for Plavix in California, and did not manufacture, label, package, or work on the regulatory approval of the product in California. Ibid. BMS instead engaged in all of these activities in either New York or New Jersey. Ibid. But BMS does sell Plavix in California. Between 2006 and 2012, it sold almost 187 million Plavix pills in the State and took in more than $900 million from those sales. 1 Cal. 5th, at 790-791, 377 P.3d, at 879. This amounts to a little over one percent of the company's nationwide sales revenue. Id., at 790, 377 P.3d, at 879.

         B

         A group of plaintiffs-consisting of 86 California residents and 592 residents from 33 other States-filed eight separate complaints in California Superior Court, alleging that Plavix had damaged their health. Id., at 789, 377 P.3d, at 878. All the complaints asserted 13 claims under California law, including products liability, negligent misrepresentation, and misleading advertising claims. Ibid. The nonresident plaintiffs did not allege that they obtained Plavix through California physicians or from any other California source; nor did they claim that they were injured by Plavix or were treated for their injuries in California.

         Asserting lack of personal jurisdiction, BMS moved to quash service of summons on the nonresidents' claims, but the California Superior Court denied this motion, finding that the California courts had general jurisdiction over BMS "[b]ecause [it] engages in extensive activities in California." App. to Pet. for Cert. 150. BMS unsuccessfully petitioned the State Court of Appeal for a writ of mandate, but after our decision on general jurisdiction in Daimler AG v. Bauman, 571 U.S.___(2014), the California Supreme Court instructed the Court of Appeal "to vacate its order denying mandate and to issue an order to show cause why relief sought in the petition should not be granted." App. 9-10.

         The Court of Appeal then changed its decision on the question of general jurisdiction. 228 Cal.App.4th 605, 175 Cal.Rptr.3d 412 (2014). Under Daimler, it held, general jurisdiction was clearly lacking, but it went on to find that the California courts had specific jurisdiction over the nonresidents' claims against BMS. 228 Cal.App.4th 605, 175 Cal.Rptr. 3d, at 425-439.

         The California Supreme Court affirmed. The court unanimously agreed with the Court of Appeal on the issue of general jurisdiction, but the court was divided on the question of specific jurisdiction. The majority applied a "sliding scale approach to specific jurisdiction." 1 Cal. 5th, at 806, 377 P.3d, at 889. Under this approach, "the more wide ranging the defendant's forum contacts, the more readily is shown a connection between the forum contacts and the claim." Ibid, (internal quotation marks omitted). Applying this test, the majority concluded that "BMS's extensive contacts with California" permitted the exercise of specific jurisdiction "based on a less direct connection between BMS's forum activities and plaintiffs' claims than might otherwise be required." Ibid. This attenuated requirement was met, the majority found, because the claims of the nonresidents were similar in several ways to the claims of the California residents (as to which specific jurisdiction was uncontested). Id., at 803-806, 377 P.3d, at 887-889. The court noted that "[b]oth the resident and nonresident plaintiffs' claims are based on the same allegedly defective product and the assertedly misleading marketing and promotion of that product." Id., at 804, 377 P.3d, at 888. And while acknowledging that "there is no claim that Plavix itself was designed and developed in [BMS's California research facilities], " the court thought it significant that other research was done in the State. Ibid.

         Three justices dissented. "The claims of . . . nonresidents injured by their use of Plavix they purchased and used in other states, " they wrote, "in no sense arise from BMS's marketing and sales of Plavix in California, " and they found that the "mere similarity" of the residents' and nonresidents' claims was not enough. Id., at 819, 377 P.3d, at 898 (opinion of Werdegar, J.). The dissent accused the majority of "expand[ing] specific jurisdiction to the point that, for a large category of defendants, it becomes indistinguishable from general jurisdiction." Id., at 816, 377 P.3d, at 896.

         We granted certiorari to decide whether the California courts' exercise of jurisdiction in this case violates the Due Process Clause of the ...


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