Calif. Justices Skeptical Non-Residents Can Sue Bristol-Myers

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By Martina Barash

June 2 — Can non-Californian plaintiffs sue Bristol-Myers Squibb Co. over alleged injuries from the blood-thinner Plavix in a California court ( Bristol-Myers Squibb Co. v. Super. Ct. (Anderson), Cal., No. S221038, oral argument 6/2/16 )?

Justices of the California Supreme Court appeared skeptical of arguments by an attorney for the plaintiffs that the drugmaker's “nationwide marketing scheme” for Plavix or its relationship with a California-based national distributor supplied the necessary connection.

But some of the justices at the June 2 oral argument also questioned a Bristol-Myers Squibb attorney's reasons why jurisdiction over the company in this situation would be unfair.

Two types of personal jurisdiction are at issue in the case: general, or all-purpose, jurisdiction; and specific jurisdiction (43 PSLR 647, 5/18/15).

General jurisdiction applies when a defendant is incorporated or headquartered in the state. Specific jurisdiction can be asserted when the defendant's activities in the state give rise to the claims.

Bristol-Myers Squibb has its headquarters in New York and is incorporated in Delaware.

Sliding Scale

Much of the discussion focused on specific jurisdiction, governed in California not only by U.S. Supreme Court cases but also by state caselaw utilizing a “sliding scale” for the necessary level of contact with the state and the relation of the claims to the state.

The higher the level of contact, the less plaintiffs must show the degree of relatedness, plaintiffs' attorney Stuart B. Esner of Esner Chang & Boyer in Pasadena, Calif., told the court. Here, he argued, Bristol-Myers Squibb had a great deal of contact with California.

But wouldn't a nationwide business always be subject to suit in California, one of the justices wondered.

Has the relatedness inquiry “eroded to the vanishing point?” another justice asked.

Proportionality

Anand Agneshwar, arguing for Bristol-Myers Squibb, focused on a “proportionality” concern.

About 10 percent of the U.S. population is in California, but under the plaintiffs' theory, the company would be answerable in California courts for 100 percent of worldwide claims, Agneshwar, with Arnold & Porter LLP in New York, said.

But some of the justices found this puzzling. Is proportionality a due-process notion in the sense that it violates the notion of fair play? What's the additional burden of adding the out-of-state plaintiffs to the Plavix suit, which also has California plaintiffs?

All-Purpose Jurisdiction

General jurisdiction, the subject of a thorough U.S. Supreme Court decision, Daimler AG v. Bauman, 2014 BL 9151 134 S. Ct. 746 (U.S. 2014), only came up in passing.

Esner said he read Daimler, which many view as severely curtailing all-purpose jurisdiction, (44 PSLR 65, 1/18/16) as “reinforcing the vitality of specific jurisdiction.”

Agneshwar cautioned the court not to conflate the two types of jurisdiction.

One justice asked him about the sliding scale. He responded, “If state-specific contact goes down to zero, I don't think that flies after Daimler.”

To contact the reporter on this story: Martina S. Barash in Washington at mbarash@bna.com

To contact the editor responsible for this story: Steven Patrick at spatrick@bna.com