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Monday, June 19, 2017

SCOTUS Symposium: Narrowing specific jurisdiction

The post-2010 revival of personal jurisdiction in SCOTUS (after a two-decade absence) has been defined in part by narrowing general jurisdiction, including last month in BNSF. In Bristol-Meyers Squibb v. Superior Court, an 8-1 Court (per Justice Alito) turned the screws on specific jurisdiction. The Court held that there was no jurisdiction in California over claims by non-residents for non-forum injuries, even when caused by the same nationwide conduct. Justice Sotomayor again dissented alone, as she has been in the general-jurisdiction cases, continuing to play the Justice Brennan role of finding personal jurisdiction in almost every case. She criticized the decision as the "first step toward a similar contraction of specific jurisdiction." 

For the majority, there was no purposeful availment as to the non-California plaintiffs because they were not prescribed, did not purchase, did not ingest, and did not experience injury from Plavix in California; that other plaintiffs were injured in California was beside the point. There must be a connection between the forum and each specific claim, with "claim" meaning one plaintiff, one defendant, and one right. Keeton v. Hustler did not help, because defamation hatmed the people of the state even as to an outsider plaintiff and because the issue there was whether one plaintiff could pursue a full claim against one defendant. The majority closed by rejecting the "parade of horribles" that plaintiffs raised, insisting that there were lots of other forums plaintiffs could go: New York and Delaware (where BSM is essentially at home and subject to general jurisdiction), "probably" in other states with lots of injured plaintiffs (there were dozens of plaintiffs from Texas who all could sue there), and maybe federal court (an open question, but probably not at the moment, because there is no statutory authorization for such jurisdiction).

Justice Sotomayor viewed the case as easy under the three-part Shoe analysis: 1) BSM purposefully availed given its massive sales and marketing in California; 2) the non-resident claims "related to" the forum because they have a "connection with" California, in that all plaintiffs in all states were injured by "the same essential acts" or "materially identical acts" to BSM's marketing and sales in California; 3) it was not unreasonable to make BSM defend the non-resident claims in California, since it already was defending the resident claims. Sotomayor also threw in an aside that she would measure jurisdiction first and foremost by fair play and substantial justice, elevating the third prong of the analysis to the first prong. She also pointed out, correctly, that the majority hasd no response to the "relate to" prong; it cited only Walden v. Fiore, a case that dealt with lack of minimum contacts, not whether those contacts gave rise or related to the claim. She also was correct as to Keeton--there is no meaningful distinction between a defendant haled into court by one non-resident plaintiff over nationwide conduct and haled into court by many non-resident plaintiffs over nationwide conduct. Sotomayor closed with her concerns about what this does to mass-tort litigation and the insufficiency of the alternative forums the majority suggests remain.

Some last thoughts:

1) I wrote after BNSF that BSM was the important personal-jurisdiction case for the Term. If general jurisdiction has narrowed, the solution is to broaden specific jurisdiction by broadening when a claim arises out of or relates to the contacts. But the majority did not go there, nor did it offer a good answer or guidance as to what arise out of/relate to means. Instead, it let the first prong--purposeful availment--do all the work by holding that BSM did not purposefully avail as to the non-resident defendants. But that is the problem. There should be no doubt that BSM purposefully availed, given its massive sales and advertising in the state (constituting both stream-of-commerce and seek-to-serve) and the fact that it is a nationwide corporation doing nationwide business; the question should have been whether those contacts gave rise to the non-res claims. But the majority did not frame the case in those terms. As in Nicastro (especially Justice Breyer's concurring opinion), the Justices seem unwilling to let the other two prongs of the analysis do any work.

2) What is Justice Ginsburg thinking? She wrote a sharp dissent in Nicastro. Otherwise, she wrote the three opinions narrowing general jurisdiction and joined the majority in the decisions narrowing specific jurisdiction. Sotomayor cited Ginsburg's Nicastro dissent in FN 3 in rejecting BSM's proferred narrow interpretation of relate to.

Update: A third point: The effect of this is to give large corporate defendants forum advantages over plaintiffs. A large group of plaintiffs wanting to pursue a corporate defendant must go to the defendant's home turn. Or they must go to federal court (maybe), which has shown itself to be more defendant-friendly in recent years. For many plaintiffs, neither is an enticing option.

Posted by Howard Wasserman on June 19, 2017 at 12:39 PM in 2016-17 End of Term, Civil Procedure, Howard Wasserman | Permalink

Comments

On your third point, about defendant control, I suppose the outcome puts defendants in much the same position they are with respect to arbitration and forum-selection clauses. Defendants can enforce them, if they believe it will help suppress claims; or when the strategy is peace, they can simply avoid enforcing them or waive those rights. (Much as Wells Fargo did with its arbitration agreement, or as BMS itself did with the special master in NY, who was already coordinating many aspect of the nationwide litigation (inside and outside of California.)

Another question is what this means for MDLs. Aside from filing in a home court, I suppose another way to avoid personal jurisdiction concerns is to apply to the Judicial Panel on Multidistrict Litigation to transfer the cases into multidistrict litigation. Since the 1970s, courts have said MDLs are "unburdened" by questions of personal jurisdiction because an MDL judge retains all of the powers of the court where the claims where the were originally filed. They one could move to certify a class, much like in the NFL or VW litigation.

Of course, MDL litigation is always a crap shoot, so I don't know how many attorneys would go this route--as opposed to filing smaller cases in state or federal court on behalf of in-state residents. The JPML has virtually unfettered discretion over where the cases go. And the MDL judge has similarly wide discretion over who is on a steering committee, runs the case, and gets lucrative common benefit fees.

But, in either case, it's a dramatic reminder that plaintiffs are hardly "masters of their complaint" in mass and class actions.

Posted by: Adam Zimmerman | Jun 19, 2017 4:26:39 PM

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