California Supreme Court Allows Plavix Suits to be Heard
The California Supreme Court has ruled 4-3 that its state courts have jurisdiction over eight Bristol-Myers Squibb (BMS) product liability lawsuits involving the company’s blood thinner Plavix even though the plaintiffs are not residents of the state. “Although BMS’s business contacts in California are insufficient to invoke general jurisdiction, which permits the exercise of jurisdiction over a defendant regardless of the subject of the litigation, we conclude the company’s California activities are sufficiently related to the nonresident plaintiffs‘ suits to support the invocation of specific jurisdiction, under which personal jurisdiction is limited to specific litigation related to the defendant’s state contacts,” the justices ruled.
The plaintiffs allege that the company and drug distributor McKesson promoted the drug to consumers and physicians by falsely representing it as providing greater cardiovascular benefits, while being safer and easier on the stomach than aspirin. They argue that defendants knew those claims were untrue because ingesting Plavix allegedly involves the risk of suffering a heart attack, stroke, internal bleeding, blood disorder or death, which outweighs any potential benefit.
BMS sought to have the cases dismissed on the grounds that the court lacked jurisdiction to adjudicate the claims of the 592 nonresident plaintiffs because the company was headquartered in New York City and it maintains substantial operations in New Jersey, including major research and development campuses.
In supporting plaintiffs’ motion to have the cases heard in California, the justices relied on BMS declaration that disclosed that the company maintains substantial operations in California, including five offices that are primarily research and laboratory facilities employing approximately 164 people. BMS additionally employs about 250 sales representatives in the state. The court also noted that plaintiffs submitted materials showing that BMS sold almost 187 million Plavix pills to distributors and wholesalers in California in 2006-2012, with sales revenue of almost $918 million.
The court concluded that because of these California relationships, state “courts may, consistent with the requirements of due process, exercise specific personal jurisdiction over nonresident plaintiffs’ claims in this action, which arise from the same course of conduct that gave rise to California plaintiffs’ claims: BMS’s development and nationwide marketing and distribution of Plavix. BMS cannot establish unfairness: Balancing the burdens imposed by this mass tort action, and given its complexity and potential impact on the judicial systems of numerous other jurisdictions, we conclude that the joint litigation of the nonresident plaintiffs’ claims with the claims of the California plaintiffs is not an unreasonable exercise of specific jurisdiction over defendant BMS.”
ReedSmith attorney James Beck says the ruling is almost certain to be appealed to the U.S. Supreme Court because it creates a form of “specific” jurisdiction in mass tort cases that is every bit as “grasping” and “exorbitant” as that rejected by the high court as a due process violation in Daimler AG v. Bauman. In that case, “general jurisdiction means jurisdiction over any and all disputes, and such a broad prerogative should be reserved to states where the defendant is ‘at home,’ which is basically what the Supreme Court held,” an earlier ReedSmith analysis says.