The U.S. Supreme Court Recently Narrowed States' Exercise of Personal Jurisdiction

The Supreme Court of the United States in its recent decision in Bristol-Myers Squibb Co. v. Superior Court of Cal., No. 16-466, 582 U.S. , 2017 U.S. LEXIS 3873, 2017 WL 2621322 (June 19, 2017), further clarified the limits of due process on the exercise of specific jurisdiction by a State. In its decision, the Court made clear that a State court lacks personal jurisdiction over non-resident defendants for non-forum injuries.

The case was brought in California Superior Court by over 600 plaintiffs, most of whom did not reside in California, asserting state law claims alleging injuries from the pharmaceutical company's drug Plavix. Bristol-Myers Squibb Co.,"BMS", is incorporated in Delaware, headquartered in New York and maintains substantial operations in New York and New Jersey. While BMS sells Plavix in California and engages in other business activities in other States including California, it did not develop, create a marketing strategy for, manufacture, label, package or work on regulatory approval for Plavix in California. The nonresident plaintiffs did not allege that they obtained Plavix from California, nor that they were injured in California or sought treatment in California.

BMS moved to quash the service of the summons on the non-resident claims asserting a lack of personal jurisdiction. The U.S. Supreme Court agreed, holding that the State of California lacked specific jurisdiction to entertain the nonresidents' claims as the necessary connection between the forum State and the specific claims of each non-resident plaintiff was absent.

In its opinion, the Supreme Court affirmed that the personal jurisdiction of the State courts is subject to review for compatibility with the Due Process Clause of the Fourteenth Amendment, recognizing two types of personal jurisdiction: general and specific. The "paradigm forum" for general jurisdiction is an individual's domicile or for corporations, an equivalent place which the corporation fairly regards as home. However, for specific jurisdiction, the action must "arise out of or relate to the defendant's contacts with the forum" and the primary concern is "the burden on the defendant". For a State court to exercise specific jurisdiction, 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." Under this test, when no such connection exists, specific jurisdiction is lacking regardless of the extent of a defendant's unconnected activities in the State.

The Supreme Court in making its decision stated that the mere fact that other plaintiffs were prescribed, obtained, and ingested Plavix in California does not allow the State of California to assert specific jurisdiction over the nonresident's claims. Nor is it sufficient that BMS conducted research in California on matters unrelated to Plavix (and thus, unrelated to these claims) or that BMS contracted with a California company to distribute Plavix nationally.