On June 19, 2017, the U.S. Supreme Court issued a decision clarifying the circumstances in which a lawsuit “arises out of” or “relates to” a corporation’s contacts with a particular jurisdiction, such that it can be sued there. In Bristol-Myers Squibb Co. v. Superior Court, writing for an 8-1 majority, Justice Alito held that California state courts do not have jurisdiction to hear the product liability claims of non-California residents against Bristol-Myers Squibb Co., a foreign corporation. The Court reasoned that the nonresident plaintiffs “do not claim to have suffered harm in that state” from their use of BMS’ drug Plavix, and “all the conduct giving rise to the nonresidents’ claims occurred elsewhere.” The Supreme Court found insufficient BMS’ substantial sales in California, including through its use of 250 sales representatives in that state.

In so holding, the Supreme Court reversed a 2016 decision by the California Supreme Court, which concluded that BMS was subject to the personal jurisdiction of California courts under a “sliding scale” approach. Under that approach, “the more wide ranging the defendants’ forum contacts, the more readily is shown a connection between the forum contacts and the claim.” California’s high court also found significant the similarity between the claims of nonresidents and Californians.

Not only did the U.S. Supreme Court outright reject the “sliding scale” approach, it found legally flawed the California court’s application of that approach. As Justice Alito wrote, “[t]he mere fact that other plaintiffs were prescribed, obtained, and ingested Plavix in California . . . does not allow the State to assert specific jurisdiction over the nonresidents’ claims.” The Court deemed equally inapposite that BMS conducted activities, including research, in California “on matters unrelated to Plavix.” At bottom, according to the Court, “What is needed—and what is missing here—is a connection between the forum and the specific claims at issue.”

This decision is likely to have significant implications in product liability lawsuits, particularly mass litigation commonly faced by pharmaceutical and medical device manufacturers, among others. In those cases, plaintiffs from across the country often seek to litigate consolidated claims against manufacturers in a single jurisdiction of plaintiffs’ choosing. The Bristol-Myers Squibb decision presents an additional jurisdictional hurdle to that effort.

For further analysis of the Supreme Court’s decision, see our recent Client Alert on Crowell.com.