Hunton Retail Law Resource

On June 19, 2017, the United States Supreme Court announced important constitutional limitations on state courts’ ability to exercise specific jurisdiction over nonresidents’ claims against out-of-state defendants. The Court’s nearly unanimous decision in Bristol-Myers v. Superior Court, 582 U.S. (2017) has potentially far-reaching implications for companies facing claims brought by nonresident and resident plaintiffs in states in which those companies are neither incorporated nor maintain their principal place of business. In holding that mere joinder of nonresident plaintiffs’ claims with those of resident plaintiffs does not permit a state court to exercise specific jurisdiction over an out-of-state defendant, the Court’s decision is the latest in a trend of important personal jurisdiction decisions rendered by the high court in recent years which provide companies with significant constitutional protections in terms of where plaintiffs may force companies to litigate.

In Bristol-Myers, 678 plaintiffs filed suit in California state court, alleging various personal injury and fraud claims involving a drug manufactured by the defendant. Of the 678 plaintiffs, 86 were California residents and the remaining 592 plaintiffs were residents of 33 other states. Bristol-Myers Squibb (“BMS”) objected to the exercise of personal jurisdiction over it with respect to the nonresident plaintiffs’ claims. The United States Supreme Court held that California’s exercise of jurisdiction violated BMS’s due process rights. Writing for the Court, Justice Alito criticized the California Supreme Court’s “sliding-scale” approach to specific jurisdiction, calling it “a loose and spurious form of general jurisdiction.” According to the Court, the fact that California residents had brought similar—if not identical—claims together with the nonresidents’ claims cannot be dispositive over whether the court had jurisdiction with respect to the specific nonresident claims at issue. Because the nonresidents’ claims had no connection to the general conduct in which BMS engaged in the state of California, the state court could not constitutionally use those connections to justify its exercise of specific jurisdiction over BMS.

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