Bristol-Myers Squibb Co. v. Superior Court of Cal., San Francisco Cty.

Background

More than 600 people sued Bristol-Myers Squibb (BMS) in California state court, including 86 California residents and 592 people from 33 other States, claiming injuries from the prescription drug Plavix. BMS is incorporated in Delaware, headquartered in New York, and operates in New York, New Jersey, and California, including five research facilities (about 160 employees). BMS sold almost 187 million Plavix pills in California from 2006 to 2012, earning over $900 million (about one percent of national sales). The nonresident plaintiffs did not allege they were prescribed, purchased, ingested, or treated for Plavix in California.

Reasoning

The central question was whether California courts could hear the nonresidents' claims. The Court explained that a state can hear a claim only if there is a connection between the forum and the specific claim. It rejected the California Supreme Court’s “sliding scale” that allowed jurisdiction based on extensive but unrelated contacts. Because the nonresidents had no conduct or injury tied to California, and BMS’s unrelated research and sales there did not create the needed link, the Court reversed and held California lacked authority to hear the nonresidents’ claims. The Court also said contracting with a California distributor (McKesson) was insufficient to create that connection.

Real world impact

The ruling makes it harder to bring a single, consolidated state-court suit in California on behalf of people injured in many other States. Plaintiffs may have to sue where they were injured or where the company is “at home” (the opinion notes New York or Delaware) or pursue many separate suits, reducing consolidation and increasing litigation costs. The decision did not decide the merits of the claims; it reversed the California Supreme Court and remanded for further proceedings and left open whether the same limits apply to federal courts.

Dissents or concurrances

Justice Sotomayor dissented, warning the decision will hinder nationwide mass actions and make it difficult for small-value claims to be consolidated. She emphasized BMS’s nationwide advertising and distribution and argued fairness and efficiency support hearing joined claims in California.