“In its seminal 2014 Daimler v. Bauman decision, the U.S. Supreme Court made clear that a plaintiff may not sue a corporate defendant in a State unless his claim arises there or the State is the corporation’s principal place of business or its place of incorporation. This case shows that some states’ courts—including California’s—have not yet gotten the message.”
—Richard Samp, WLF Chief Counsel
WASHINGTON, DC—The U.S. Supreme Court today agreed to review a California Supreme Court decision that ignores constitutional limits on the authority of state courts to exercise personal jurisdiction over out-of-state corporations. The decision was a victory for Washington Legal Foundation, which filed a brief urging the Court to grant review in Bristol-Myers Squibb Co. v. Superior Court. WLF’s brief argued that the California courts in this case have refused to abide by recent precedent that cut back their jurisdiction over out-of-state defendants. WLF’s amicus brief was joined by the Allied Educational Foundation.
This case involves a group of 661 unrelated plaintiffs from across the country who filed several products-liability suits in California state court, alleging that they were injured after taking Plavix, a drug manufactured by defendant Bristol-Myers Squibb (BMS). Only 86 of the plaintiffs are California residents; the rest live in other States, and their claims have no California connection.
In 2014, the U.S. Supreme Court held in Daimler AG v. Bauman that an out-of-state corporation like BMS may not be sued unless the claim being sued on has a substantial connection with the State. Disregarding that edict, the California Supreme Court ruled that the 575 nonresident plaintiffs could sue BMS in California. It held that the nonresidents’ claims should be deemed to have a substantial connection with California because they were similar to the California plaintiffs’ claims. WLF’s brief argued that the lower court’s rationale would negate Daimler as a check on state-court jurisdiction over out-of-state corporate defendants.
Following the ruling, WLF issued the following statement by Chief Counsel Richard Samp: “Plaintiffs’ lawyers constantly seek to consolidate lawsuits from across the country as a means of increasing settlement pressures on defendants, but the Due Process Clause significantly limits the power of a State to hale nonresidents into its courts. In its seminal 2014 Daimler v. Bauman decision, the U.S. Supreme Court made clear that a plaintiff may not sue a corporate defendant in a State unless his claim arises there or the State is the corporation’s principal place of business or its place of incorporation. This case shows that some states’ courts—like California’s—have not yet gotten the message. ”
WLF is a public interest law firm and policy center that regularly litigates in support of civil justice reform, to ensure that unwarranted lawsuits do not drive up costs for all consumers.