The U.S. Supreme Court Rejects the Supreme Court of California “Sliding Scale Approach” to Specific Jurisdiction

Sep 29, 2017 | Topics: Class Actions, Product Liability

In its most recent term, the U.S. Supreme Court issued numerous decisions reiterating the limits of federal courts jurisdiction, which should in theory curb forum shopping.  Bristol-Myers Squibb Co. v. Superior Court, 137 S. Ct. 1773, 1775 (2017) delineates the contours of specific jurisdiction in the context of mass tort litigation against out-of-state companies.

In Bristol-Myers Squibb Co., a group of plaintiffs (86 California residents and 592 non-California residents from 33 other states), sued Bristol-Meyers Squibb (BMS) in California Superior Court, seeking damages for alleged health problems caused by Plavix (a drug manufactured by BMS).  BMS is incorporated in Delaware, headquartered in New York, but it conducts business in California.  BMS has five research and laboratory facilities in California, and it sold almost 187 million Plavix pills over a six-year period, which resulted in more than $900 million in sales.  Based on this activity, the plaintiffs filed their action in state court.  Notably, however, the non-resident plaintiffs did not allege any individual ties to California (e.g., they did not allege they were prescribed or purchased Plavix in California).

BMS sought to quash the litigation for lack of personal jurisdiction.  In a split decision, the Supreme Court of California held that the California courts had specific jurisdiction over the nonresidents’ claims.  The majority employed a “sliding-scale approach” in which the more widespread a defendant’s contacts in a forum, the easier to establish a connection between the defendant’s contacts and the claim for specific jurisdiction.  The court found specific jurisdiction existed based on BMS’s contacts in California.

However, in an 8 to 1 decision, the U.S. Supreme Court reversed the Supreme Court of California’s decision.  The Court held that the California courts violated the Due Process Clause of the Fourteenth Amendment by exercising jurisdiction.  The Court found the well-established principles regarding specific jurisdiction were dispositive—there must be some connection between the forum state and the specific claims at issue.  The Court also expressly rejected the California Supreme Court’s “sliding scale approach” once again reiterating that a defendant’s general connections with the forum state are insufficient to establish specific jurisdiction.

Applying the settled principles of specific jurisdiction, the Court found the requisite connection between California and the nonresidents’ claims against BMS was lacking. 

While this case provides clarify on the exercise of specific jurisdiction by a State, the Court in Bristol-Myers expressly left open whether the Fifth Amendment imposes the same restrictions on a federal court’s exercise of personal jurisdiction.