Products Liability: General and Specific Jurisdiction

Posted in Products Liability on July 6, 2015

Bristol-Myers Squibb Company v. Superior Court, (First District, July 30, 2014) 228 Cal.App.4th 605, 175 Cal.Rptr.3d 412, 14 Cal. Daily Op. Serv. 8653, 2014 Daily Journal D.A.R. 10,059

Hundreds of users of the prescription drug Plavix, including both Californians as well as residents of other states, filed products liability actions in California against BMS, the drug’s manufacturer. The plaintiffs alleged that BMS falsely represented the drug as providing greater cardiovascular benefits, while being safer and easier on a person’s stomach than aspirin, but that those claims were untrue, and that ingesting the drug involved a risk of suffering a heart attack, stroke, internal bleeding, blood disorder or death, far outweighing any potential benefit.

The manufacturer moved to quash service of the summons of the complaints by the non-California residents, contending that the trial court could not assert general jurisdiction over the defendant unless it was “at home” in California under the holding in Goodyear Dunlop Tires Operations, S.A. v. Brown (2011) ––– U.S. ––––, 131 S.Ct. 2846, 180 L.Ed.2d 796. The manufacturer argued that its California contacts did not rise to that level since it was neither headquartered nor incorporated here. The defendant also argued that out of state plaintiffs could not invoke specific jurisdiction here because such jurisdiction is limited to cases where the controversy is related to or arises out of the defendant’s contacts with the forum.

The trial court denied the motion based on its conclusion that California has general jurisdiction over BMS, but did not address the issue of specific jurisdiction. The court of appeal summarily denied a petition for a writ of mandate, but following the U.S. Supreme Court’s decision in Daimler AG v. Bauman (2014) ––– U.S. ––––, 134 S.Ct. 746, 187 L.Ed.2d 624, which limited the application of general jurisdiction, the California Supreme Court granted a petition for review and transferred the matter back to the court of appeal for further consideration. The court of appeal denied the petition, finding that although the trial court did not have general jurisdiction over the defendant, the motion to quash was properly denied based upon the doctrine of specific jurisdiction:

[W]e conclude that BMS has engaged in substantial, continuous economic activity in California, including the sale of more than a billion dollars of Plavix to Californians. That activity is substantially connected to the RPI’s claims, which are based on the same alleged wrongs as those alleged by the California resident plaintiffs. Further, BMS does not establish it would be unreasonable to assert jurisdiction over it. Therefore, we conclude that it is consistent with due process to require BMS to defend the RPI’s claims before the trial court in coordination with the claims of the California resident plaintiffs.…

BMS’s extensive, longstanding business activities in California, including in particular its sale of 196 million Plavix pills between 1998 and 2006 and nearly $1 billion worth of Plavix in California between 2006 and 2012, five offices and facilities, hundreds of California-based employees and sales representatives, and long-time maintaining of an in-State agent for service of process bear no resemblance to the “random, fortuitous, and attenuated” interests held to be insufficient in World–Wide  Volkswagen and Walden. They provide evidence of far more than the minimum contacts necessary under International Shoe to support the exercise of specific jurisdiction.…
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Further, plaintiffs allege BMS’s Plavix sales in California have led to injuries to California residents that are the same as those suffered by the RPI. At least 84, and perhaps as many as 251, California residents have sued BMS and McKesson in San Francisco because of perceived deficiencies in those pills which have caused such injuries in this state. If BMS is liable to any of the California plaintiffs because of proof which will be common for all plaintiffs, then those elements of each of the RPI’s claims may also be established.

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Also, although the RPI injuries did not occur in the course of BMS’s direct delivery of Plavix to the California market, plaintiffs allege, and the record suggests, that BMS sold product to both resident plaintiffs and the RPI as part of the distribution of Plavix in many states. In other words, the injuries are alleged to have occurred in the course of a common effort, another fact that weighs in favor of finding a “substantial connection” between BMS’s contacts with California and the RPI’s claims.