June 19, 2017
On June 19, 2017, the Supreme Court of the United States further clarified the scope of state courts’ power to exercise personal jurisdiction over defendants, holding that state courts do not have specific personal jurisdiction unless there is "an ‘affiliation between the forum and the underlying controversy, principally, an activity or an occurrence that takes place in the forum State.’" Bristol-Myers Squibb Co. v. Superior Court of Cal., S.F. Cty., No. 16-466, Slip op. 7 (quoting Goodyear Dunlop Tires Operations, S.A. v. Brown, 564 U.S. 915, 919 (2011)). Without a connection between the defendant’s activity in the forum state and the specific claims in the litigation, a state court lacks specific personal jurisdiction even if the defendant has expansive activities in the state that are unrelated to the litigation.
Bristol-Myers involved claims brought in California state court against Bristol-Myers Squibb, a pharmaceutical company incorporated in Delaware and headquartered in New York. Slip op. 1. The plaintiffs were 86 California residents and 592 non-California residents from 33 other states. Id. at 2. All of the plaintiffs alleged that they were injured by a prescription drug called Plavix, which was manufactured and sold nationwide by Bristol-Myers. Id. Bristol-Myers moved to quash the service of summons in part, arguing that the California court lacked personal jurisdiction over Bristol-Myers on the non-California residents’ claims. Id. Bristol-Myers argued that those claims had no meaningful connection to California because the non-residents had purchased, used, and allegedly been injured by Plavix outside of California and because Bristol-Myers developed, marketed, and packaged Plavix in New York, not California. Id.
The California Supreme Court concluded that the California courts could exercise specific personal jurisdiction over Bristol-Myers on the out-of-state residents’ claims. Slip op. 3. The court applied a "sliding scale approach to specific jurisdiction" under which "the more wide ranging the defendant’s forum contacts, the more readily is shown a connection between the forum contacts and the claim." Id. at 3 (internal citations omitted). According to the California Supreme Court, "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." Id. at 7. The court concluded that the required connection existed here because Bristol-Myers’ California activities unrelated to Plavix were wide-ranging: It had research facilities, laboratories, employees, sales representatives, and a government advocacy office located there. Id. at 1−2.
The Supreme Court of the United States firmly rejected the "sliding-scale approach," which it called "loose and spurious" with "no support" in the Supreme Court’s cases. Slip op. 7. Instead, the Supreme Court held, "for a court to exercise specific jurisdiction over a claim, there must be an "an ‘affiliation between the forum and the underlying controversy, principally, an activity or an occurrence that takes place in the forum State.’" Id. (quoting Goodyear, 564 U.S. at 919). And in terms of whether a sufficient connection exists between the defendant’s activity in the forum state and the plaintiffs’ claims, Bristol-Myers’ California activities unrelated to the litigation were not "sufficient—or even relevant." Id. at 8. The fact that other plaintiffs from California with similar claims were permitted to sue in California "does not allow the State to assert specific jurisdiction over the nonresidents’ claims" because "[w]hat is needed … is a connection between the forum and the specific claims at issue." Id. Nor was the fact that Bristol-Myers "contracted with a California distributor … enough to establish personal jurisdiction in the State," because the plaintiffs did not allege that Bristol-Myers "engaged in relevant acts together with [the distributor] in California" or that Bristol-Myers "is derivatively liable for [the distributor’s] conduct in California." Id. at 11−12.
At bottom, because the non-resident plaintiffs "d[id] not claim to have suffered harm in [California]," and "all of the conduct giving rise to the nonresidents’ claim occurred elsewhere," California courts "[could not] claim specific jurisdiction." Slip op. 9.
Bristol-Myers limits the forums that can exercise specific, or case-linked, jurisdiction over a defendant to only those places with a connection between the defendant’s actions and the plaintiff’s particular claims. Slip op. 8. If specific jurisdiction is missing, then the plaintiff must rely on the other category of personal jurisdiction that is recognized by the Supreme Court’s cases: general, all-purpose jurisdiction. Id. at 5. The scope of general jurisdiction is also limited; as the Supreme Court recently reiterated in BNSF Railway Co. v. Tyrrell, 137 S. Ct. 1549 (2017) (handled by Gibson Dunn), general jurisdiction is limited to the places where the defendant is "at home." For a corporation, "home" is limited in all but an "exceptional case" to the defendant’s place of incorporation and principal place of business; a defendant is not at home in other states even if it has very substantial business operations there. See id. at 1559.
Taken together, the Supreme Court’s opinions in BNSF and Bristol-Myers suggest that personal jurisdiction is available in very few forums: in the defendant’s place of incorporation; in the defendant’s principal place of business; or where the defendant engaged in the conduct that gave rise to the plaintiff’s claims.
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