SCOTUS Narrows Forum-Shopping in Big Pharma Action
In a win for the corporate defense bar, the U.S. Supreme Court on Monday tightened jurisdictional rules that determine where companies can be sued.
June 19, 2017 at 05:01 PM
10 minute read
For the third time this spring, business advocates on Monday succeeded in persuading the U.S. Supreme Court to limit forum-shopping by tightening jurisdictional rules that determine where corporate defendants can be sued.
In Bristol-Myers Squibb v. Superior Court of California, the court sided with the pharmaceutical company in its battle against a class action brought in California by injured users of Plavix, a blood-thinning drug, even though many of the plaintiffs had little or no connection to the state.
Justice Samuel Alito, writing for the majority, said “the nonresidents were not prescribed Plavix in California, did not purchase Plavix in California, did not ingest Plavix in California, and were not injured by Plavix in California. The mere fact that other plaintiffs were prescribed, obtained, and ingested Plavix in California—and allegedly sustained the same injuries as did the nonresidents—does not allow the state to assert specific jurisdiction over the nonresidents' claims.”
Alito continued, “What is needed—and what is missing here—is a connection between the forum and the specific claims at issue.”
â–ºREAD MORE: Anticipation Builds for Huge SCOTUS Ruling on Forum-Shopping
Justice Sonia Sotomayor was the lone dissenter, asserting that the ruling “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.”
The 8-1 ruling in the closely-watched California case came on the heels of TC Heartland v. Kraft Foods Group Brands, a May 22 decision that limited patent infringement lawsuits primarily to the state of the defendant's incorporation, and BNSF Railway v. Tyrrell, a May 30 ruling that said the Fourteenth Amendment bars states from conducting trials when the corporation “is not 'at home' in the state and the episode-in-suit occurred elsewhere.”
The U.S. Chamber of Commerce and other business groups pushed these and other cases toward the Supreme Court this term, seeking clarification of murky jurisdiction precedents that have encouraged states to go their own way.
“Because the pervasive confusion in the lower courts is traceable to language in this court's own decisions, only this court can provide clarity,” states a brief in the Bristol-Myers case filed by the Product Liability Advisory Council. Alan Untereiner of Robbins, Russell, Englert, Orseck, Untereiner & Sauber was counsel of record on the brief.
“We've been fighting for decades for venue reform, but it looks like the Supreme Court is finally stepping in and doing something about it,” said Shook, Hardy & Bacon partner Victor Schwartz, a longtime tort reformer, before the decision came down.
In the Bristol-Myers case, the California Supreme Court ruled that both in-state and out-of-state plaintiffs could sue the pharmaceutical company in California. The company had sought to exclude non-California plaintiffs from the litigation, but a majority of justices ruled that California courts had “specific jurisdiction” because Bristol-Myers conducted significant research, sales and marketing within the state. “We conclude the company's California activities are sufficiently related to the nonresident plaintiffs' suits.”
The decision was a win for Bristol-Myers Squibb's lawyer Neal Katyal of Hogan Lovells, who argued for the drug company. Rachel Kovner, assistant to the solicitor general also argued on the side of the company. Thomas Goldstein of Goldstein & Russell argued against Bristol-Myers Squibb.
Copyright National Law Journal. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.
For the third time this spring, business advocates on Monday succeeded in persuading the U.S. Supreme Court to limit forum-shopping by tightening jurisdictional rules that determine where corporate defendants can be sued.
In
Justice Samuel Alito, writing for the majority, said “the nonresidents were not prescribed Plavix in California, did not purchase Plavix in California, did not ingest Plavix in California, and were not injured by Plavix in California. The mere fact that other plaintiffs were prescribed, obtained, and ingested Plavix in California—and allegedly sustained the same injuries as did the nonresidents—does not allow the state to assert specific jurisdiction over the nonresidents' claims.”
Alito continued, “What is needed—and what is missing here—is a connection between the forum and the specific claims at issue.”
â–ºREAD MORE: Anticipation Builds for Huge SCOTUS Ruling on Forum-Shopping
Justice
The 8-1 ruling in the closely-watched California case came on the heels of TC Heartland v. Kraft Foods Group Brands, a May 22 decision that limited patent infringement lawsuits primarily to the state of the defendant's incorporation, and
The U.S. Chamber of Commerce and other business groups pushed these and other cases toward the Supreme Court this term, seeking clarification of murky jurisdiction precedents that have encouraged states to go their own way.
“Because the pervasive confusion in the lower courts is traceable to language in this court's own decisions, only this court can provide clarity,” states a brief in the Bristol-Myers case filed by the Product Liability Advisory Council. Alan Untereiner of
“We've been fighting for decades for venue reform, but it looks like the Supreme Court is finally stepping in and doing something about it,” said
In the Bristol-Myers case, the California Supreme Court ruled that both in-state and out-of-state plaintiffs could sue the pharmaceutical company in California. The company had sought to exclude non-California plaintiffs from the litigation, but a majority of justices ruled that California courts had “specific jurisdiction” because Bristol-Myers conducted significant research, sales and marketing within the state. “We conclude the company's California activities are sufficiently related to the nonresident plaintiffs' suits.”
The decision was a win for
Copyright National Law Journal. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.
This content has been archived. It is available through our partners, LexisNexis® and Bloomberg Law.
To view this content, please continue to their sites.
Not a Lexis Subscriber?
Subscribe Now
Not a Bloomberg Law Subscriber?
Subscribe Now
NOT FOR REPRINT
© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.
You Might Like
View AllAttorneys Ordered to Apologize to South Philadelphia Residents Following 'Scream Test' Experiment
5 minute readWhich 1-Judge Division Districts Have Adopted Anti-Forum Shopping Guidance?
Bitnomial Exchange Preemptively Sues SEC Over Alleged Enforcement Conflict With CFTC
4 minute readFederal Judge Rejects Lyft's 'Competitive Harm' Claims in Attempt to Seal Safety Procedures, Storage Information
4 minute readTrending Stories
Who Got The Work
Dechert partners Andrew J. Levander, Angela M. Liu and Neil A. Steiner have stepped in to defend Arbor Realty Trust and certain executives in a pending securities class action. The complaint, filed July 31 in New York Eastern District Court by Levi & Korsinsky, contends that the defendants concealed a 'toxic' mobile home portfolio, vastly overstated collateral in regards to the company's loans and failed to disclose an investigation of the company by the FBI. The case, assigned to U.S. District Judge Pamela K. Chen, is 1:24-cv-05347, Martin v. Arbor Realty Trust, Inc. et al.
Who Got The Work
Arthur G. Jakoby, Ryan Feeney and Maxim M.L. Nowak from Herrick Feinstein have stepped in to defend Charles Dilluvio and Seacor Capital in a pending securities lawsuit. The complaint, filed Sept. 30 in New York Southern District Court by the Securities and Exchange Commission, accuses the defendants of using consulting agreements, attorney opinion letters and other mechanisms to skirt regulations limiting stock sales by affiliate companies and allowing the defendants to unlawfully profit from sales of Enzolytics stock. The case, assigned to U.S. District Judge Andrew L. Carter Jr., is 1:24-cv-07362, Securities and Exchange Commission v. Zhabilov et al.
Who Got The Work
Clark Hill members Vincent Roskovensky and Kevin B. Watson have entered appearances for Architectural Steel and Associated Products in a pending environmental lawsuit. The complaint, filed Aug. 27 in Pennsylvania Eastern District Court by Brodsky & Smith on behalf of Hung Trinh, accuses the defendant of discharging polluted stormwater from its steel facility without a permit in violation of the Clean Water Act. The case, assigned to U.S. District Judge Gerald J. Pappert, is 2:24-cv-04490, Trinh v. Architectural Steel And Associated Products, Inc.
Who Got The Work
Michael R. Yellin of Cole Schotz has entered an appearance for S2 d/b/a the Shoe Surgeon, Dominic Chambrone a/k/a Dominic Ciambrone and other defendants in a pending trademark infringement lawsuit. The case, filed July 15 in New York Southern District Court by DLA Piper on behalf of Nike, seeks to enjoin Ciambrone and the other defendants in their attempts to build an 'entire multifaceted' retail empire through their unauthorized use of Nike’s trademark rights. The case, assigned to U.S. District Judge Naomi Reice Buchwald, is 1:24-cv-05307, Nike Inc. v. S2, Inc. et al.
Who Got The Work
Sullivan & Cromwell partner Adam S. Paris has entered an appearance for Orthofix Medical in a pending securities class action arising from a proposed acquisition of SeaSpine by Orthofix. The suit, filed Sept. 6 in California Southern District Court, by Girard Sharp and the Hall Firm, contends that the offering materials and related oral communications contained untrue statements of material fact. According to the complaint, the defendants made a series of misrepresentations about Orthofix’s disclosure controls and internal controls over financial reporting and ethical compliance. The case, assigned to U.S. District Judge Linda Lopez, is 3:24-cv-01593, O'Hara v. Orthofix Medical Inc. et al.
Featured Firms
Law Offices of Gary Martin Hays & Associates, P.C.
(470) 294-1674
Law Offices of Mark E. Salomone
(857) 444-6468
Smith & Hassler
(713) 739-1250