The U.S. Supreme Court has agreed to hear an appeal by Bristol-Myers Squibb against a 2016 ruling by the California Supreme Court in a suit involving the blood-thinning drug Plavix.
In last year’s 4-3 decision, the California justices found that out-of-state plaintiffs could sue the drug company for injuries even though the company is not based in the state and the drugs were not purchased or ingested in the state.
The California court ruled that despite those facts, the state courts could preside over the lawsuit since Bristol-Myers Squibb had conducted a national advertising campaign and sold roughly $1 billion worth of the drug in the Golden State.
The court based its conclusion on Bristol-Myers’s California sales representatives, distributor, and R&D facilities unrelated to the drug at issue in the case, according to Brian Matsui, a partner in the Appellate and Supreme Court Practice Group of international law firm Morrison & Foerster.
The court held that the plaintiffs’ claims could “arise out of or relate to” Bristol-Myers’s activities in California, even if plaintiffs’ injuries were not caused by those in-state activities.
Far-Reaching Consequences
The consequences of the Bristol-Myers Squibb case could be far-reaching, according Matsui.
“In the event the Supreme Court adopts California’s sliding scale approach to personal jurisdiction, plaintiffs likely will argue that manufacturers should be subject to specific jurisdiction in every state where they sold their products, regardless of whether the specific claims directly relate to the defendant’s contacts in the forum state,” Matsui said.
“The California court’s broad application of the ‘relate to’ standard also threatens to undo the Supreme Court’s strict division between general and specific jurisdiction by seemingly creating a nebulous intermediate category of personal jurisdiction,” he added.
Bristol-Myers Squibb attorneys and pharmaceutical trade groups argue that such a ruling could prompt plaintiffs to file suits against companies in jurisdictions deemed more favorable to a positive outcome.
A U.S. Supreme Court decision is expected by the end of June 2017.
