Supreme Court Strikes Another Blow to Litigation Tourism in Bristol-Myers Squibb

Defense Counsel Journal, April 2018 | Go to article overview

Supreme Court Strikes Another Blow to Litigation Tourism in Bristol-Myers Squibb


I. Post-Daimler Background

SINCE 2014, the United States Supreme Court has continued a trend of limiting personal jurisdiction states may exercise over non-resident defendants. Generally, the defendants at issue in these rulings are large domestic companies and multi-national corporations. These defendants are commonly the victims of "litigation tourism" and sometimes are subjected to numerous, identical lawsuits filed in the same plaintiff-friendly venues regardless of the personal connections plaintiffs share with those venues. 1

Prior to the Court's landmark decision Daimler AG v. Bauman, 2 corporate and multi-national defendants had few practical defenses to personal jurisdiction in various plaintiff-friendly venues throughout the country. 3 In particular, out-of-state defendants were subjected to personal jurisdiction in forum states that were utilizing more relaxed jurisdictional standards than, apparently, the Court originally intended. In Daimler, the Court reiterated constitutional limitations on states exercising overly broad general personal jurisdiction over non-resident defendants. 4

Before Daimler, state courts had seemingly unchecked discretion to find non-resident companies created sufficient connections with the forum State to confer general personal jurisdiction. Daimler continued a recent trend kick-started by Goodyear Dunlop Tires Operations, S.A. v. Brown 5 to substantially limit these possibilities. Under Daimler, out-of-state defendants may only be subjected to general jurisdiction in the forum state if the forum state is the state of its principal place of business, the state of incorporation, or in the exceptional case where its contacts "are so constant and pervasive as to render [it] essentially at home in the forum State." 6

The principle holding in Daimler has since been recognized in almost every State around the country, with Oregon and Illinois recently joining the trend. 7 The Supreme Court even recently reinforced Daimlers standard limiting the general jurisdiction states may exercise over non-resident defendants in BNSF Railway Co. v. Tyrrell. 8 In Tyrrell, the Court found that a non-resident railroad company was not "at-home" in Montana, and therefore not subject to general jurisdiction there, even when the defendant operated over 2,000 miles of track and employed 2,000 employees in Montana. 9 These factors were insufficient to show the defendant was "essentially at home" in Montana and, further, the Court ruled the Daimler standard does not vary with the type of claim asserted or the enterprise sued. 10

As courts, and plaintiffs, reacted to Daimler the focus quickly shifted to the forum state's exercise of specific personal jurisdiction over non-resident plaintiffs. Although the primary focus of [the Supreme Court's] personal jurisdiction inquiry is the defendant's relationship to the forum State, 11 many states allowed for broad jurisdictional analyses that considered the similarities of a plaintiff's claims with similarly situated plaintiffs, in addition to a non-resident defendant's connections to the forum state, before determining whether specific jurisdiction existed over the non-resident defendant. This practice contributed to a hyper-realized form of litigation tourism recognized by some as a strategy of "jurisdiction by joinder" 12--wherein non-resident plaintiffs would join similar claims with resident plaintiffs against non-resident defendants in order to maintain their lawsuits in plaintiff-friendly venues. Thus, non-resident plaintiffs attempted to circumvent their own jurisdictional limitations by piggy-backing their claims onto similar claims filed by similar plaintiffs in more desirable venues.

In its landmark decision Bristol-Myers Squibb Company v. Superior Court of California, San Francisco County et al., ("BMS") the Supreme Court rejected this approach as nothing more than a "loose and spurious form of general jurisdiction. …

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