Bristol-Myers Squibb Co. v. Superior Court of California, San Francisco County

MUST A DEFENDANT’S SUFFICIENT CONTACTS BE CAUSALLY RELATED TO A PLAINTIFF’S INJURIES FOR A STATE TO EXERCISE JURISDICTION?

BMS claims that California erred in applying its “sliding scale” approach to personal jurisdiction, which allows wider ranging contacts in the forum to compensate for the lack of any causal connection between the contacts and the injured parties’ claims. BMS’s main argument rests on the delineation between “general or all-purpose jurisdiction, and specific or case-linked jurisdiction.” BMS argues that while general jurisdiction focuses on the strength of a defendant’s affiliations with the forum (be it an individual’s domicile or a corporation’s state of incorporation or principal place of business) relative to a defendant’s activities as a whole, specific jurisdiction exists only when the defendant’s contacts with the forum meet the seminal case of International Shoe Co. v. Washintgon’s “minimum”—if they caused the plaintiff’s alleged injuries. BMS analogizes its case to Goodyear v. Dunlop Tires Operations, S.A. v. Brown, where the bus accident that gave rise to the litigation occurred in France, leading the Court to find that the contacts posed an insufficient link for North Carolina to obtain jurisdiction.

The California Superior Court (“the Superior Court”) counters by pointing to the variation in standards used by the Court to evaluate personal jurisdiction, which it says stem from the language “in a suit arising out of, or relating to the defendant’s contact with the forum.” The Superior Court argues that the Court inserted the broad phrase “relating to,” indicating a connection between two things, to be differentiated from the phrase “arise out of” thus avoiding the creation of a bright line rule. The Superior Court posits that when a defendant purposefully directs its activities at the forum, the state may hale the defendant and adjudicate any claims “connected with that controversy” so long as its exercise of jurisdiction is fair and reasonable. In other words, the Superior Court claims that a state’s power to adjudicate the claims and controversies arising out of a defendant’s purposeful activities in its jurisdiction include the ancillary authority to assess all claims “connected with” those activities whether in-state or not.

BMS criticizes the Superior Court’s view that the Court intended to establish two different classes of sufficient connections between a defendant’s forum contacts and a plaintiff ’s claim by interpreting “arise out of” to mean cause and “relate to” to mean something else. BMS claims the Superior Court errs in thinking that just because the Court used two different words, each one must mean something different. . BMS points out that courts “frequently say two (or more) things when one will do”. To illustrate, BMS then provides a list of seemingly redundant phrases commonly used in the legal profession: “cease and desist,” “arbitrary and capricious,” or “good faith and fair dealing.” Ultimately, BMS argues that a State has little legitimate interest in adjudicating a dispute that has no causal connection with conduct that took place in its territory. BMS claims if the plaintiff did not receive, use, or suffer injuries from a product in the forum, it is quite unlikely that the selection of that forum stems from convenience, but rather arises from a strategic attempt to pick a forum perceived as plaintiff-friendly.

The Superior Court argues that a causality component is a fiction of corporate defendants and that this case is primarily governed by Keeton v. Hustler Magazine, Inc., where the Court refused to find that the defendant’s forum contacts had to cause the plaintiffs out-of-state injuries. In Keeton, the Superior Court notes, the Court unanimously agreed that New Hampshire possessed specific jurisdiction over a non-resident plaintiff’s defamation claim against a non-resident publisher, for injuries occurring from the defamation in each of the fifty states. The Superior Court views the state court as the best forum to adjudicate the same claim that would be litigated elsewhere by the same plaintiff against the same defendant, because the forum is already adjudicating a closely related claim. The Superior Court adds that BMS’s cry of unfairness rings hollow because no defendant would be burdened to appear anywhere it was not already appearing for the forum claims, and nowhere that “it has not already purposefully created an obligation to defend itself.”

IF CAUSALITY IS A REQUIREMENT, DOES SPECIFIC JURISDICTION FURTHER REQUIRE PROXIMATE CAUSE TO ESTABLISH SUFFICIENT CONTACTS?

BMS’s proposed standard would require both that a defendant’s forum contacts bear a direct relation to the litigation and that the possibility of suit on a plaintiff’s claims in said forum be reasonably foreseeable to the defendant. BMS claims that the proximate cause requirement comes from the Court’s decision in Burger King Corp. v. Rudzewicz, explaining that “where individuals purposefully derive benefit from their interstate activities, it may well be unfair to allow them to escape having to account in other States for consequences that arise proximately from such activities.” Additionally, BMS points to Kulko v. Superior Court of California where the Court did not find specific jurisdiction because the defendant’s forum contacts were merely a but-for cause of the litigation.

The Superior Court attacks BMS’s focus on the “for consequences that arise proximately from those activities” language from Burger King as a “dicta hunt.” While the Superior Court concedes that the “proximate” language explains one of several reasons for a forum to exercise specific jurisdiction, it points out that the very next sentence in the Burger King opinion states that “in a state where the defendant engages in economic activity . . . it will usually not be unfair to subject him to the burdens of litigating in another forum for disputes arising or relating to such activity.”

BMS also argues that defining “arise out of or relate to” in terms of proximate cause promotes the principles that underlie specific jurisdiction—federalism, predictability, and fairness. BMS analogizes to a lawyer who hypothetically commits malpractice in Virginia and is subsequently sued in Massachusetts on a claim where the plaintiff relies solely on the attorney’s law school alma mater being in Cambridge to meet specific jurisdiction forum requirements. BMS’s concern is that under a but-for-only approach, almost all claims would satisfy the “arise out of or relate to” standard despite a defendant’s contacts with the forum having only the most attenuated connection with the plaintiff ’s claims.

The Superior Court combats BMS’s concerns of mere “attenuated” connections by citing Walden v. Fiore, in which the Court held that for a state to exercise personal jurisdiction consistent with due process, the defendant’s “suit-related conduct must create a substantial connection with the forum State.” The Superior Court further argues that BMS’s billion-dollar marketing and sales effort in California is clearly “suit-related” and surely established such a “substantial connection” with California. And returning to Keeton, California submits that forcing the defendant to answer for such suit-related conduct not only comports with the principles of reasonableness and fairness, but also advances judicial economy by promoting efficient adjudication of claims, and all without any burden on the corporate defendant, who here has conceded the reasonableness of the jurisdiction.