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April 12, 2018Download PDF

"Consumer Class Actions in Defendants' Backyards: The Home-Field Advantage of Bristol-Myers Squibb"

In Bristol-Myers Squibb Co. v. Superior Court of California, San Francisco County, decided in June 2017, the United States Supreme Court reversed the California Supreme Court’s decision to allow the state to exercise specific personal jurisdiction over BMS in a mass tort insofar as it involved non-California-residents’ claims (the claims of California residents were deemed subject to the court’s specific jurisdiction). As Justice Sotomayor noted in her dissent, this decision highly limited the ability of plaintiffs to consolidate their tort actions against a corporate defendant. As such, the Court effectively limited the reach of personal jurisdiction over a defendant in any state court in which the plaintiff’s injury did not “arise out of or relate to” the defendant’s contacts with that state.

Though not decided in the context of a class action, the BMS decision has had lasting repercussions for consumers and other aggrieved individuals seeking to band together to bring class claims against corporate defendants. The reasoning is along the following: say Plaintiff A is a resident of Illinois, Plaintiff B is a resident of Indiana, and Defendant is a California corporation with its principal place of business in San Francisco. Pursuant to previously existing Supreme Court precedent, the only forum where a plaintiff could assert general jurisdiction over Defendant would be California. Defendant would also be subject to specific personal jurisdiction in Illinois with respect to Plaintiff A’s claims, and in Indiana with respect to Plaintiff B’s claims. However, there would be no jurisdiction over Defendant in Illinois for Plaintiff B’s claims, nor in Indiana for Plaintiff A’s claims. This is deemed to be true even if the claims arise, say, from a defective product that was marketed and sold in the exact same way in both states.

The relevance to class actions should be obvious. Given that consumer class actions almost always involve goods or services that are targeted to the country, or even the world, at large, plaintiffs in class action lawsuits will either: (1) reside in multiple states, if there are multiple plaintiffs; or (2) seek to represent injured residents from other states with materially similar laws, if there is only one plaintiff. After BMS, however, the only place where a plaintiff can successfully pursue a multi-state class action against a defendant is where the court has general jurisdiction, i.e., the defendant’s backyard.

Though this outcome may be logical given the legal reasoning in BMS, its practical implications are plainly detrimental to class action plaintiffs. Assuming a defendant is incorporated and located in a state where the law is unfavorable for class plaintiffs (which, setting aside other business concerns, would be plainly advisable for such defendants in a legal sense), that defendant is essentially immunized from large-scale civil liability. Plaintiffs, should they wish to pursue their consumer claims in their home fora, where the legislature has specifically crafted laws designed to protect its residents, must do so on a state-by-state basis – for a case that has nationwide implications, the only way for Plaintiffs to pursue claims in their own backyards is to file 50 different lawsuits, creating an incredible burden on the court system and the litigants themselves.

BMS, in the context of consumer class actions, is protecting against an illusory concern – that defendants will be “haled into court” in a forum with which they have no connection and have not “purposefully availed” themselves. But a defendant that sells the same product in the same way across the United States has directed its activity toward every state, and would indeed unquestionably be subject to the court’s jurisdiction for that uniform course of conduct in a particular forum if only that forum-resident plaintiff had sued, rather than multiple plaintiffs from multiple states.

We live in an ever more interconnected world. The judiciary is further burdened than it has ever been before. Yet the impact of BMS, at least for class actions, is drawing essentially arbitrary distinctions across state lines, requiring the filing of more actions rather than fewer, counteracting the very purpose of the class action vehicle itself. The only other option is to try to hold a misbehaving defendant responsible on its own, self-selected home field. If this happens to be a state that is unsympathetic to class actions or consumers generally, good luck.