On Monday, the U.S. Supreme Court handed down a major decision on the scope of personal jurisdiction for businesses, providing clarity on where a corporation can expect to be haled into court and potentially limiting forum-shopping.

The decision can offer legal departments welcome predictability and limits when it comes to where companies should be expected to go on the defensive, according to attorneys, including a prominent in-house lawyer from GlaxoSmithKline.

The case, Bristol-Myers Squibb v. Superior Court of California, involves a group of more than 600 plaintiffs, most of whom are not from California, who sued in California state court, claiming that the pharmaceutical giant's blood-thinning drug Plavix damaged their health. For a case such as this one, two types of personal jurisdiction are typically considered: general and specific. General jurisdiction for a corporation has been interpreted to mean where it is “at home.” Specific jurisdiction, on the other hand, relates to a defendant's contacts with a particular forum and requires a connection between the forum and the claims at issue in litigation.

While general jurisdiction was initially considered in this case, it was eventually determined to be lacking when it came to New York-headquartered Bristol-Myers Squibb. Ultimately, the California Supreme Court held that while BMS did not develop, manufacture or create a marketing strategy for Plavix in California, that state's courts had specific jurisdiction over claims from nonresidents, with the majority using a “sliding scale approach” to specific jurisdiction.

In reversing the lower court's decision, Alito added: “What is needed—and what is missing here—is a connection between the forum and the specific claims at issue.”

“This is a very important clarification from the Supreme Court and provides guidance and certainty for litigants about which courts are appropriate for each case, “ Jonathan Wasserman, vice president and associate general counsel at BMS, said in an email to Corporate Counsel.

The practice of forum-shopping will likely be curbed because of this decision, said Andy Boczkowski, assistant general counsel at GSK, which filed an amicus brief in the case in support of BMS. He said that currently corporate defendants may face hundreds of claims involving plaintiffs from all over the United States that will be brought in one state, even though many of the claims may have nothing to do with the state.

“What we think this decision will mean is that if a claim doesn't have any connection to a forum, it can't be brought there,” Boczkowski said. “[It's] not about barring plaintiffs from bringing their claims before a judge or a jury, it's about making sure they file them in the right jurisdictions where it's proper and fair for a company to defend them.”

The decision may also provide relief from another problem for GSK. The pharma giant is sometimes forced to defend cases when out-of-state witnesses are unavailable to testify in person at trial, according to Boczkowski. For instance, he said, in a suit claiming a drug company failed to warn of side effects of a particular medication, the most crucial witness is often the treating physician, but GSK can't force in-person testimony and state courts cannot compel out-of state witnesses to show up at a trial.

The way it happens in practice, Boczkowski said, is the doctor's deposition is taken, but it's not a given he or she will show up at trial. “It can hurt defendants because if that physician won't travel to the forum where the lawsuit is, there's nobody to put in front of the jury,” he explained.

Going forward, Boczkowski said in-house lawyers should focus on whether a case can and should be removed to federal court. “If these claims are not able to be amalgamated the way they have been … when a complaint gets filed, they should be on the lookout to see if they can remove the case to proper federal court,” he said. “Before the BMS decision, plaintiffs had this tool to bring litigation into state court. Now that the Supreme Court has undone this type of forum-shopping, defendants may be able to get more of these cases into the federal court.”

The high court's decision also likely means companies will not be dragged as readily into any court plaintiffs choose, said Timothy Droske, of counsel at Dorsey & Whitney. “For corporate defendants and in-house counsel, I think it provides another tool early on in litigation to try to limit and more narrowly focus an action and to make sure it's brought in a court to which they are subject to jurisdiction,” he said.

Strategically, Droske said, for in-house counsel, it's all the more important to “really have personal jurisdiction on the checklist … right at the start of the case” because personal jurisdiction may be waived if not raised at the outset.

Alito wrote in the majority opinion that the decision “will not result in the parade of horribles that respondents conjure up” because it does prevent in-state and out-of-state plaintiffs from “joining together in a consolidated action in the states that have general jurisdiction over BMS.”

In her dissenting opinion, however, Justice Sonia Sotomayor noted that the consequences of the ruling may be substantial. “The majority's rule will make it difficult to aggregate the claims of plaintiffs across the country whose claims may be worth little alone,” she wrote. “It will make it impossible to bring a nationwide mass action in state court against defendants who are 'at home' in different states. And it will result in piecemeal litigation and the bifurcation of claims.”

Leslie Brueckner, a senior attorney at national public interest law firm Public Justice, agreed with Sotomayor. As is pointed out in the dissent, Brueckner said, BMS purposely availed itself of California, it maintains facilities in the state and it raked in nearly $1 billion from Plavix sales in California during the period relevant to the lawsuit.

“[The] decision basically cut back on specific jurisdiction, made it much more difficult for a plaintiff to get specific jurisdiction over a corporate defendant. So the other question is: What about general jurisdiction?” Brueckner said. “What that means if I'm a corporation is I'm going to make damn sure that the place I'm incorporated or have my principal place of business is in a corporate-friendly jurisdiction.”

This story has been updated to include comment from Bristol-Myers Squibb.