By Taylor Concannon on January 17, 2018
In 2017, the U.S. Supreme Court in cases such as BNSF Railway Co. v. Tyrrell, 137 S.Ct 1549 (2017), and Bristol-Myers Squibb Co. v. Superior Court of California, 137 S. Ct. 1773 (2017) continued the trend that began in Goodyear and Daimler and reaffirmed its limits on personal jurisdiction for corporate defendants.
Lower courts have followed suit, emphasizing that constitutional limits on state courts exercising jurisdiction over out-of-state defendants must be respected. For businesses that find themselves sued outside of their home state or in states considered to be more plaintiff-friendly, these limitations are critical and underscore the importance of preserving jurisdictional challenges, especially when facing plaintiffs from states across the nation. Challenges to personal jurisdiction may generally be preserved through a motion to dismiss or in the answer. Proceed with caution, however, because in jurisdictions such as Illinois, an affirmative defense in an answer is not sufficient to preserve a personal jurisdiction defense.
Notable U.S. Supreme Court Decisions
BNSF Railway Co. v. Tyrrell
In BNSF, despite the fact that BNSF was neither incorporated in Montana nor had its principal place of business in the state, two employees that were injured out of state attempted to bring suit against BNSF in Montana on the basis that the railroad was “doing business” in the state by maintaining approximately five percent of its work force and six percent of its total track mileage in the state. The U.S. Supreme Court reaffirmed its prior holding in Daimler and made clear that if a defendant is neither incorporated in a state nor has its principal place of business there, general jurisdiction will not be appropriate except in “exceptional cases” where the defendant has contacts “so substantial and of such a nature” that the defendant is “at home” in the state. See our full coverage on this issue here.
Bristol-Myers Squibb Co. v. Superior Court of California
In Bristol-Myers Squibb, the U.S. Supreme Court turned its attention to specific personal jurisdiction, holding that under the Fourteenth Amendment due-process clause, each plaintiff in a multi-plaintiff case must establish personal jurisdiction over a defendant for his or her individual claim. Here, a group of plaintiffs—most from outside of California—sued a pharmaceutical company in California state court alleging that the company’s medication had harmed them. Bristol-Myers Squibb (“BMS”) is not incorporated in California and California is not its principal place of business, even though it engages in significant business in California. None of the marketing strategy or regulatory compliance work for the drug at issue was done in California and BMS had not developed, manufactured, labeled, or shipped the drug from California. Most importantly, the out of state plaintiffs had not purchased the drug from California sources nor alleged that they were injured in California. Consequently, the U.S. Supreme Court held that the state court lacked specific jurisdiction over the out of state individuals whose injuries had no connection with the forum state. See our full coverage on this issue here.
Notable Lower & State Court Decisions
Illinois and Missouri courts had several key decisions on personal jurisdiction issues this year.
Eastern District of Missouri
Siegfried v. Boehringer Ingelheim Pharm., Inc. & Jordan v. Bayer Corp.
In two very similar cases, Siegfried v. Boehringer Ingelheim Pharm., Inc., 2017 WL 2778107 (E.D. Mo. Jun. 27, 2017) and Jordan v. Bayer Corp., 2017 WL 3006993 (E.D. Mo. Jul. 14, 2017) ninety-four plaintiffs, only a handful of which were residents of Missouri, filed complaints alleging injuries allegedly sustained from drugs and devices manufactured by the defendants. Plaintiffs alleged that the courts had specific jurisdiction over all defendants because the same conduct that gave rise to the cause of action as a whole and defendants’ contacts with Missouri constituted part of the same series of transactions for all plaintiffs. Critically, however, none of the non-Missouri plaintiffs acquired the drugs or devices in Missouri or allege to have suffered injuries in Missouri. Relying on Bristol-Myers Squibb, both courts concluded that they lacked personal jurisdiction over the nonresident plaintiffs and granted defendants’ motion to dismiss.
State ex rel. Norfolk Southern Ry. v. Dolan
In State ex rel. Norfolk Southern Ry. v. Dolan, the Missouri Supreme Court, relying on Daimler, held that Missouri had neither general nor specific personal jurisdiction over Norfolk Southern. Plaintiff alleged that he had sustained injuries while working for Norfolk Southern in Indiana. His claim had no connection to Missouri other than that the railroad operated trains in Missouri and was registered to do business there. Plaintiff first attempted to argue that Missouri had specific jurisdiction over his claims because his injuries arose from the railroad’s operation of its business in Indiana and it engaged in the same type of conduct in Missouri. The court, recognizing that this would subject a national corporation to litigation anywhere in the country, rejected the argument. Plaintiff argued in the alternative that Missouri had general jurisdiction over Norfolk Southern because the railway had continuous and systematic contacts with Missouri by virtue of its 400 miles of track in the state. The court also rejected this argument as inconsistent with Daimler because Norfolk Southern was not incorporated in Missouri and did not have its principal place of business in the state. Moreover, with only two percent of its track in and two percent of its revenue coming from Missouri, Norfolk Southern could not be said to be “at home” in the jurisdiction. The court also rejected plaintiff’s argument that the railway had consented to jurisdiction by registering to do business in the state. See our full coverage on this case here.
Estate of Fox v. Johnson & Johnson
In October, the Missouri Court of Appeals in Estate of Fox v. Johnson & Johnson, 2017 WL 4629383 (Mo. Ct. App. Oct. 17, 2017) applied Bristol-Myers Squibb to vacate a $72 million judgment against Johnson & Johnson based on the fact that Missouri lacked personal jurisdiction over the out-of-state plaintiff whose injury did not arise from Johnson & Johnson’s activities in Missouri. See our full coverage on this case here.
M.M. ex rel. Meyers v. GlaxoSmithKline LLC
In M.M. ex rel. Meyers v. GlaxoSmithKline LLC, 2016 IL App (1st) 151909, an appellate court in Illinois confirmed the right of state courts to regulate the conduct of pharmaceutical manufacturers who perform clinical trials in the state. The Illinois court rejected GlaxoSmithKline’s (“GSK”) argument that specific jurisdiction in Illinois was improper because GSK conducted clinical trials on the drug at issue in over 40 other states as well. It held that whether a manufacturer’s in-state contacts are meaningful for purposes of specific personal jurisdiction “depends entirely on their relation to the Plaintiffs’ causes of action, and not at all on the percentage-based comparison between how much related conduct occurred outside of Illinois.” Consequently, the court found that personal jurisdiction was proper over GSK with respect to the out-of-state plaintiffs’ claims. The U.S. Supreme Court denied GSK’s petition for a writ of certiorari. GlaxoSmithKline LLC v. M.M. ex rel. Meyers, 138 S. Ct. 64 (Mem) (2017).
Aspen American Ins. Co. v. Interstate Warehousing, Inc.
Addressing general jurisdiction in Illinois in the wake of Daimler, a unanimous Illinois Supreme Court in Aspen American Ins. Co. v. Interstate Warehousing, Inc., 2017 WL 4173349, (Ill. Sept. 21, 2017) held that the presence of a facility in the state and registration to do business in the state were insufficient to permit the exercise of general jurisdiction over a foreign corporation.
Post-BNSF and Bristol-Myers Squibb, limitations on personal jurisdiction are becoming clearer, reigning in plaintiffs’ ability to forum shop and providing added predictability for corporations engaging in business on a national scale.