August 29, 2016

Divided court finds jurisdiction over out-of-state pharmaceutical manufacturer

In Bristol-Myers Squibb Company v. Superior Court, the Supreme Court today holds that hundreds of non-California plaintiffs can sue a pharmaceutical manufacturer in a California court for injuries allegedly caused by one of the defendant company’s drugs, even though the company is neither incorporated nor headquartered in the state.  [Disclosure:  Horvitz & Levy is co-counsel for defendant Bristol-Myers.]  The majority opinion by Chief Justice Tani Cantil-Sakauye (joined by Justices Goodwin Liu, Mariano-Florentino Cuéllar, and Leondra Kruger) concludes that, “[a]lthough [the defendant’s] business contacts in California are insufficient to invoke general jurisdiction, which permits the exercise of jurisdiction over a defendant regardless of the subject of the litigation, . . . the company’s California activities are sufficiently related to the nonresident plaintiffs’ suits to support the invocation of specific jurisdiction, under which personal jurisdiction is limited to specific litigation related to the defendant’s state contacts.”  The court relies on the defendant company’s “extensive contacts with California, encompassing extensive marketing and distribution of Plavix [the alleged injury-causing drug], hundreds of millions of dollars of revenue from Plavix sales, a relationship with a California distributor, substantial research and development facilities, and hundreds of California employees.”

Justice Kathryn Werdegar dissents, for herself and Justices Ming Chin and Carol Corrigan.  She finds “no evidence of contacts with California that bear a substantial connection to the claims of the[ ] nonresident[ ]” plaintiffs.  The dissent claims that “the majority’s decision threatens to subject companies to the jurisdiction of California courts to an extent unpredictable from their business activities in California, extending jurisdiction over claims of liability well beyond our state’s legitimate regulatory interest.”

The court affirms the First District, Division Two, Court of Appeal.

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