In law school civil procedure classes, students learn what are seemingly established rules of personal jurisdiction. Corporations are subject to general jurisdiction only in two places—its state of incorporation and the state of its principal place of business. Hertz Corp. v. Friend, 559 U.S. 77, 93 (2010). A corporation is subject to a state’s specific personal jurisdiction when the injury in question occurred in that state or the defendant created or manufactured the allegedly defective product in that state. Bristol-Myers Squibb Co. v. Superior Court, 137 S. Ct. 1773, 1781-82 (2017).
But as we well know, once in practice, attorneys work to distinguish their case from these rules, to assert newfound theories of jurisdiction, or to change the rules entirely. That’s where we encounter such novel theories of jurisdiction as pendent personal jurisdiction. Plaintiffs’ attorneys can and will take every inch when it comes to winning judgments or extracting settlements on behalf of their clients (and more than lining their own pockets in the process).
Most often when we write about “Food Court” litigation, we’re faced with plaintiffs’ lawyers devising new tactics to game the system and extract large settlements from companies. Often, as was the case in the Southern District of California, plaintiffs from other states attempt to link their claims with plaintiffs from California, trying to take advantage of the typically plaintiff-friendly courts there. An increasing number of these cases are dismissed early in the proceedings under the theory that a “reasonable consumer” could not possibly have been misled by the food label. But in Andrade-Heymsfield, et al. v. Danone US, Inc., Judge Bencivengo also took the opportunity to dismiss an out-of-state plaintiff’s claims on personal jurisdiction grounds before dismissing the California plaintiffs’ claims.
In Danone, three plaintiffs sued Danone alleging that its Coconut Milk labels are deceptive as they market the product as being more nutritious than it actually claims to be. The plaintiffs, two Californians and one New Yorker, brought this putative class action on behalf of all those similarly situated in California and New York. The complaint alleged violations of the Consumer Legal Remedies Act, Unfair Competition Law, False Advertising Law, and breaches of express and implied warranties under California law. The complaint also alleged violations of New York’s Unfair and Deceptive Business Practices Law, False Advertising Law, and breaches of express warranties under New York Law. Bringing the New York claims in California was seemingly an effort to try the case in front of a possibly more plaintiff-friendly California court.
The court dismissed the complaint with prejudice under Rule 12(b)(6) for failure to state a claim, as is typical in these cases. But it first took the opportunity to find that no personal jurisdiction existed over the New York plaintiff’s claims.
Danone argued that the New York claims were barred under the Supreme Court’s holding in Bristol-Myers, because they had no connection to California. The New York plaintiff attempted to distinguish Bristol-Myers under the premise that mass actions are different from class actions. But the court found that distinction is only relevant when involving absent putative class members, not named plaintiffs. And according to the court, “Bristol-Myers should apply where, as here, non-resident class representatives assert state-law claims against non-resident defendants on behalf of multistate classes as opposed to a nationwide class.” Bristol-Myers barred the New York claims because the plaintiff’s claims had no connection to the forum state.
The New York plaintiff also asserted that, despite Bristol-Myers, the district court had general jurisdiction over Danone due to Danone’s business contacts with California. Among other connections, Danone is registered to do business in California, has registered agents in California, and operates multiple facilities there.
But the Supreme Court has made it very clear that a corporation is only at home in its state of incorporation and in the state of its principal place of business. And only in an “exceptional case” will a company be subject to general jurisdiction in another state. Registering to do business in a state, or maintaining facilities and other properties, does not meet the “so continuous and systematic as to render the foreign corporation essentially at home in the forum State” standard. “[T]he general jurisdiction inquiry does not focus solely on the magnitude of the defendant’s in-state contacts.” Daimler AG v. Bauman, 571 U.S. 117, 139 n.20 (2014). Ironically, Danone would be subject to general jurisdiction and thus a class action involving plaintiffs in multiple states in New York, Parra’s home state.
The plaintiff’s last-gasp effort to have the case heard in California was to assert pendent personal jurisdiction over Danone for the claims. Federal courts typically exercise pendent personal jurisdiction in a case where a plaintiff asserts jurisdiction over a defendant for the violation of a federal statute providing for nationwide service of process. Once the court has jurisdiction over that claim, it can then assert jurisdiction over claims that arise from the same set of facts as the original claim. But in Danone there was no federal claim “upon which Plaintiffs [could] hook their state law claims.” The district court refused to assert pendent personal jurisdiction and directed the plaintiff to re-file in an appropriate jurisdiction.
Despite recent setbacks, plaintiffs will continue to engage in “Food Court” litigation and turn over every stone in trying to bring these claims in plaintiff-friendly jurisdictions. The more options defendants have to fight these claims, though, the more likely these suits will eventually be gone for good. Of course, the plaintiffs’ bar won’t stay down for long and it will soon be time for the next fight.
Also published on Forbes.com on WLF’s contributor page.