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Aug. 29 — Out-of-state plaintiffs can sue Bristol-Myers Squibb Co. in a California court over alleged injuries from the blood-thinner Plavix, the California Supreme Court ruled 4–3 Aug. 29 ( Bristol-Myers Squibb Co. v. Super. Ct. (Anderson) , Cal., No. S221038, 8/29/16 ).
The drugmaker's marketing, distribution and research activities in California provided the necessary connection to the plaintiffs' claims to support jurisdiction, the high court said in an opinion by Chief Justice Tani Cantil-Sakauye.
But the court rejected the plaintiffs' argument that Bristol-Myers was sufficiently at home in California to support jurisdiction over it on any and all claims.
The ruling comes in a suit coordinating the claims of 678 individuals allegedly harmed by Plavix, of whom 592 are residents of other states. At issue was the connection between the plaintiffs' claims and the business activities of Bristol-Myers, and whether that was sufficient for purposes of specific jurisdiction (44 PSLR 576, 6/13/16).
“We think the court did the right thing,” Hunter J. Shkolnik, an attorney for the plaintiffs, told Bloomberg BNA Aug. 29. “There's no justification for plaintiffs outside the state of California not to be able to join the in-state plaintiffs in their lawsuits against Bristol-Myers Squibb.”
“It would just be wasteful to require lawsuits to be filed all over the country,” Shkolnik said. He's with Napoli Shkolnik PLLC in New York.
Neither an attorney nor a spokesperson for Bristol-Myers responded to requests for comment.
But one prominent defense attorney said the California top court overreached in finding jurisdiction, and that the ruling goes against established U.S. Supreme Court precedent.
General, or all-purpose, jurisdiction applies when a defendant is incorporated or headquartered in the state, the U.S. Supreme Court has said. Specific jurisdiction can be asserted when the claims arise from or are related to the defendant's activities in the state.
In the wake of U.S. Supreme Court decisions limiting general jurisdiction, including Daimler AG v. Bauman, 2014 BL 9151, 134 S.Ct. 746 (U.S. 2014) (42 PSLR 52, 1/20/14), “a number of courts have refused to exert general jurisdiction over corporations,” Leslie Brueckner, an attorney with Public Justice P.C., a consumer law firm in Oakland, told Bloomberg BNA.
“What's significant about this case is it's one of the first cases where a state high court has found specific jurisdiction over a company based on its substantial, continuous business activities in the state,” she said.
Brueckner said there's “nothing exotic or farfetched” about the opinion.
But Steven Boranian, a litigator at Reed Smith LLP in San Francisco, disagreed. “I think it's an extension of the law,” he told Bloomberg BNA. Boranian represents pharmaceutical makers and medical device makers, and contributes to the “Drug and Device Law Blog.”
The California Supreme Court majority relied on California precedents using a “sliding scale” between the “intensity” of a defendant's contacts with the state and how closely those contacts are connected to the claim.
The state-law precedents also held that a claim “need not arise directly from the defendant's forum contacts in order to be sufficiently related” for purposes of specific jurisdiction, the supreme court said.
Boranian said that now, according to the court, the out-of-state plaintiffs “can sue in California even though they've had no contact with California and BMS's contacts with California don't relate directly to those claims.”
“It's a little difficult to reconcile” with the U.S. Supreme Court's Daimler v. Bauman decision, Boranian said, “because they are applying what they call a sliding scale, but as they describe it, it sounds a lot like the systematic and continuous contact test that the U.S. Supreme Court rejected in the Bauman case.”
Three justices dissented from the majority's decision. “By weakening the relatedness requirement, the majority's decision threatens to subject companies to the jurisdiction of California courts to an extent unpredictable from their business activities in California,” Justice Kathryn Werdegar wrote in the dissenting opinion.
The dissent also criticized the idea that the plaintiffs' claims were related to Bristol-Myers's research facilities in California, which weren't involved in developing Plavix. That ground for finding relatedness “is both illogical and startling in its potential breadth,” Werdegar wrote.
An Illinois appellate court decided Aug. 26 that specific jurisdiction exists over another drugmaker, GlaxoSmithKline LLC, in Paxil birth-defect suits (see related story). GSK contracted with physicians in the state to conduct clinical trials of Paxil, the court said.
The appeals court said there was a connection to the claims: The plaintiffs alleged the results of the Illinois clinical trials, and others, led to inadequate warnings, the court said.
Napoli Bern Ripka Shkolnik and Esner, Chang & Boyer represented the plaintiffs.
Lea Brilmayer, who teaches at Yale Law School; Horvitz & Levy; and Arnold & Porter represented Bristol-Myers.
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The opinion is available at http://src.bna.com/h7g.
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