Bristol-Myers Squibb Co. v. Superior Court of S.F. Cnty.

1 Cal.5th 783

377 P.3d 874

206 Cal.Rptr.3d 636

BRISTOL-MYERS SQUIBB COMPANY, Petitioner

v. The SUPERIOR COURT of San Francisco County, Respondent;Bracy Anderson et al., Real Parties in Interest.

S221038

Supreme Court of California

Filed August 29, 2016

Lea Brilmayer; Horvitz & Levy, Jon B Eisenberg ; Arnold & Porter, Jerome B. Falk, Jr., Sean M. SeLegue, Sharon D. Mayo, Jeremy McLaughlin, San Francisco, Steven G. Reade, Daniel S. Pariser, Anna K. Thompson, Maurice A. Letter and Anand Agneshwar for Petitioner.

Mayer Brown and Donald M. Falk, Palo Alto, for Chamber of Commerce of the United States of America, California Chamber of Commerce and Pharmaceutical Research and Manufacturers of America as Amici Curiae on behalf of Petitioner.

Goodwin Proctor, Richard A. Oetheimer, Sarah K. Frederick, David J. Zimmer, San Francisco, and Claire C. Jacobson for Generic Pharmaceutical Association as Amicus Curiae on behalf of Petitioner.

Pepper Hamilton, Nicholas M. Kouletsis, Christopher W. Wasson and Eric S. Wolfish for American Tort Reform Association, National Association of Manufacturers, National Federation of Independent Business and Juvenile Products Manufacturers Association as Amici Curiae on behalf of Petitioner.

Utrecht & Lenvin and Paul F. Utrecht, San Francisco, for Washington Legal Foundation as Amicus Curiae on behalf of Petitioner.

No appearance for Respondent.

Napoli Bern Ripka Shkolnik, Kelly McMeekin, Novato, Hunter J. Shkolnik, John Lytle, Ladera Ranch, Jessica Y. Lee, Shayna E. Sacks, Priya Gandhi; Audet & Partners, William M. Audet, Joshua C. Ezrin, Mark E. Burton, San Francisco; Esner, Chang & Boyer and Stuart B. Esner, Los Angeles, for Real Parties in Interest.

J. Burton LeBlanc ; Andrus Anderson, Lori E. Andrus, San Francisco, Jenny Lee Anderson ; Law Offices of Collyn A. Peddie and Collyn A. Peddie for American Association for Justice as Amicus Curiae on behalf of Real Parties in Interest.

The Arkin Law Firm, Sharon J. Arkin ; Robbins Geller Rudman & Dowd and Kevin K. Green for Consumer Attorneys of California as Amicus Curiae on behalf of Real Parties in Interest.

Cantil–Sakauye, C.J. Bristol–Myers Squibb Company (BMS), a pharmaceutical manufacturer, conducts significant business and research activities in California but is neither incorporated nor headquartered here. In March 2012, eight separate amended complaints were filed in San Francisco Superior Court by or on behalf of 678 individuals, consisting of 86 California residents and 592 nonresidents, all of whom allegedly were prescribed and ingested Plavix, a drug created and marketed by BMS, and as a result suffered adverse consequences. BMS contests the propriety of a California court's exercising personal jurisdiction over it for purposes of adjudicating the nonresident plaintiffs' claims.

Under the particular circumstances present here, we conclude personal jurisdiction is authorized by Code of Civil Procedure section 410.10, which extends jurisdiction to the maximum extent permissible under the United States Constitution. 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. (See Vons Companies, Inc. v. Seabest Foods, Inc. (1996) 14 Cal.4th 434, 446, 58 Cal.Rptr.2d 899, 926 P.2d 1085 (Vons ).)

Accordingly, we affirm the judgment of the Court of Appeal, which held that BMS was subject to the personal jurisdiction of the California courts on the basis of specific jurisdiction.

I. Factual and Procedural Background

BMS manufactures Plavix, a prescription drug used to inhibit blood clotting. In the eight amended complaints filed in the superior court, 86 California residents and 592 residents of 33 other states sued BMS and McKesson Corporation, a pharmaceutical distributor headquartered in California, for injuries allegedly arising out of their use of Plavix.¹ The state in which the largest number of plaintiffs reside is Texas, with 92 plaintiffs, followed by the 86 California plaintiffs, followed by Ohio, with 71 plaintiffs.

Each amended complaint contains the same 13 causes of action: strict products liability (based on both design defect and manufacturing defect); negligence; breach of implied warranty; breach of express warranty; deceit by concealment (Civ. Code, §§ 1709, 1710 ); negligent misrepresentation; fraud by concealment; unfair competition (Bus. & Prof. Code, § 17200 ); false or misleading advertising (Bus. & Prof. Code, § 17500 ); injunctive relief for false or misleading advertising (Civ. Code, § 1750 et. seq. ); wrongful death; and loss of consortium.

The plaintiffs allege that defendants engaged in “negligent and wrongful conduct in connection with the design, development, manufacture, testing, packaging, promoting, marketing, distribution, labeling, and/or sale of Plavix.” According to the complaints, defendants allegedly promoted the drug to consumers and physicians by falsely representing it “as providing greater cardiovascular benefits, while being safer and easier on a person's stomach than aspirin,” but 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] far outweighs any potential benefit.”

Plaintiffs allege different injuries, and sometimes combinations of injuries, which they claim were caused from the ingestion of Plavix. These injuries include bleeding, bleeding ulcers, gastrointestinal bleeding, cerebral bleeding, rectal bleeding, heart attack, stroke, hemorrhagic stroke, subdural hematoma, thrombotic thrombocytopenic purpura, and death. The complaints allege that 18 of the 678 individuals whose injuries underlay these actions died as the result of ingesting Plavix.

The actions were assigned as a coordinated matter to a judge of the San Francisco Superior Court.

BMS moved to quash service of summons on the ground that the court lacked personal jurisdiction over it to adjudicate the claims of the 592 nonresident plaintiffs, who are real parties in interest in this proceeding (hereafter referred to as “the nonresident plaintiffs”).

BMS noted that the complaints' allegations do not include any factual claims that the nonresident plaintiffs' injuries occurred in California or that they had been treated for their injuries in California.

In declarations supporting the motion, BMS officers stated that the company is incorporated in Delaware, is headquartered in New York City, and maintains substantial operations in New Jersey, including major research and development campuses. BMS has approximately 6,475 employees in the New York and New Jersey area, comprising 51 percent of its United States workforce.

BMS further asserted that its research and development of Plavix did not take place in California, nor was any work related to its labeling, packaging, regulatory approval, or its advertising or marketing strategy performed by any of its employees in this state. BMS has never manufactured Plavix in California. These activities were instead performed or directed from the company's New York headquarters and New Jersey operating facilities. According to data provided by the company, in a 12–month period ending in July 2012, BMS's sales revenue from Plavix sales in California constituted 1.1 percent of the company's total nationwide sales revenue of all of its products.

But the declarations submitted by BMS also 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 approximately 250 sales representatives in the state. BMS also has a small office in Sacramento to represent and advocate for the company in state government affairs.

In opposition to the motion to quash, 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. Furthermore, plaintiffs noted that BMS maintains a registered agent for service of process in California.

The superior court denied BMS's motion to quash service of summons, concluding the company's sales and other activities in California were sufficiently extensive to subject it to the general jurisdiction of the state courts.

BMS petitioned the Court of Appeal for a writ of mandate, naming the nonresident plaintiffs as real parties in interest. The Court of Appeal first summarily denied the petition on the same day as the United States Supreme Court announced its decision in Daimler AG v. Bauman (2014) 571 U.S. ––––, 134 S.Ct. 746, 187 L.Ed.2d 624 (Daimler ), which clarified limits on general jurisdiction. We granted review and transferred the matter back to the Court of Appeal for issuance of an order to show cause in light of Daimler. After briefing and oral argument, the Court of Appeal again denied the writ, this time by an opinion holding that BMS's activities in California were insufficient to subject it to general jurisdiction in the state, but that, given the nature of the action and BMS's activities in California, our courts may properly exercise specific jurisdiction over BMS in this matter.

We granted BMS's petition for review, requesting briefing on both types of personal jurisdiction, general and specific.

II. Discussion

Under Code of Civil Procedure section 410.10, California courts “may exercise jurisdiction on any basis not inconsistent with the Constitution of this state or of the United States.” “The Due Process Clause of the Fourteenth Amendment constrains a State's authority to...