Amicus Curiae Brief — Bristol-Myers Squibb Co. v. Superior Court of Cal., 137 S. Ct. 827 (2017) (No. 16-466)

upreme Court, U.

FILED

o .

yy NOV 10 2016

BRIEFS No. 16-466 OFFICE OF THE CLERK

IN THE

Supreme Court of the Anited States

BRISTOL-MYERS SQUIBB COMPANY,

Petitioner,

v.

SUPERIOR COURT OF CALIFORNIA

FOR THE COUNTY OF SAN FRANCISCO, et al.

Respondents.

On Petition for a Writ of Certiorari to the

California Supreme Court

BRIEF OF WASHINGTON LEGAL FOUNDATION

AND ALLIED EDUCATIONAL FOUNDATION

AS AMICI CURIAE IN SUPPORT OF PETITIONER

Richard A. Samp

(Counsel of Record)

Mark S. Chenoweth

Washington Legal Foundation

2009 Massachusetts Ave., NW

Washington, DC 20036

202-588-0302

rsamp@wilf.org

Date: November 10, 2016

WILSON-EPES PRINTING CO., INC. — (202) 789-0096 -— WASHINGTON, D. C. 20002

QUESTION PRESENTED

The Due Process Clause permits a state court to

exercise specific jurisdiction over a defendant only

when the plaintiffs claims “arise out of or relate to” the

defendant's forum activities. Burger King Corp. v.

Rudzewicz, 471 U.S. 462, 472 (1985) (citation omitted).

The question presented is:

Whether a plaintiffs claims arise out of or relate

to a defendant’s forum activities when there is no

causal link between the defendant’s forum contacts and

the plaintiffs claims—that is, where the plaintiffs

claims would be exactly the same even if the defendant

had no forum contacts.

TABLE OF CONTENTS

Page

Tiled OF AAT TEREEEMED 66 ois et cdocauwse ues Vv

INTERESTS OF AMICI CURIAE .............. 1

STATEMENT OF THE CASE ................. 2

SUMMARY OF ARGUMENT .................. 7

REASONS FOR GRANTING THE PETITION ... 10

I. THE DECISION BELOW CONFLICTS WITH

THIS COURT'S SPECIFIC-JURISDICTION

ES 5 ook 00% &¥3 ae Oe 10

A. The Court’s Case Law Establishes

that Respondents’ Claims Do Not

Arise out of or Relate to BMS’s

Contacts with California .......... 12

B. The California Supreme Court's

Expansive Definition of Specific

Jurisdiction Ignores Daimler’s

Admonition to Keep Rules

Governing Jurisdiction Simple in

Order to Promote Greater

FR 6 i-bs5G beeen eees es 19

1v

Page

Il. THE PETITION IS AN EXCELLENT VEHICLE

FOR RESOLVING THE CONFLICT AMONG THE

Tee ee ee ca beteece 22

EE ee 26

Vv

TABLE OF AUTHORITIES

Page(s)

Cases:

BNSF Railway Co. v. Tyrrell,

No. 16-405 (U.S., pet. docketed, Sept. 28, 2016) .. 1

Burger King Corp. v. Rudzewicz,

471 U.S. 462 (1985) .................... 16, 21

Calder v. Jones,

465 U.S. 783 (1984) ....................... 14

Daimler AG v. Bauman,

ee passim

Glater v. Eli Lilly & Co.,

744 F.2d 213 (1st Cir. 1984).............. 23, 24

Goodyear Dunlop Tires Operations, S.A. v. Brown,

MEY OEE nv avn ccncccenccncecc, 1,12

Helicopteros Nacionales de Columbia, S.A. v. Hall,

i Ws OD ccc kc ccccccecee 14, 15

Hertz Corp. v. Fried,

DE RE eo 0 nr DE 19

International Shoe Co. v. Washington,

326 U.S. 310 (1945) ....................... 11

Keeton v. Hustler Magazine, Inc.,

QOS UB. TIO (MBBO .. ww cece eace 17

Page(s)

J. McIntyre Machinery, Ltd. v. Nicastro,

gg RR a 7,10

Novo Nordisk A/S v. Lukas-Werner,

cert. denied, 134 S. Ct. 423 (2013) ............. 1

Shaffer v. Heitner,

CI, a so cue cele eedseucan 11

Vons Companies v. Seabest Foods, Inc.,

ee es EE ss oc nccvcnceucvsecdanee 24

Walden v. Fiore,

Bee ee GR BOOED nk cw ccc ccccscces 8, 15, 16

World-Wide Volkswagen Corp. v. Woodson,

444 U.S. 286 (1980) .................. 7, 11, 25

Statutes and Constitutional Provisions:

U.S. Const., amend. XIV

(Due Process Clause) ................. 7, 10, 16

Class Action Fairness Act (CAFA) .............. 3

28 U.S.C. §1332(d)(11)(B)(i) ... 2 3

INTERESTS OF AW):

Washington Lega! Foun» ) non-

profit public-interest law firm ono enter with

supporters in all 50 states.” WLF devotes « substantial

portion of its resources to defending free enterprise,

individual rights, a limited and accountable

government, and the rule of law.

To that end, WLF has appeared frequently in

this and other federal courts in cases involving

personal jurisdiction issues, to support defendants

seeking to avoid being subject to a court’s coercive

powers when assertion of jurisdiction does not comply

with traditional notions of fair play and substantial

justice. See, e.g., BNSF Railway Co. v. Tyrrell, No 16-

405 (U.S., petition docketed, Sept. 28, 2016); Goodyear

Dunlop Tires Operations, S.A. v. Brown, 131 S. Ct.

2846 (2011); Novo Nordisk A/S v. Lukas-Werner, cert.

denied, 1348. Ct. 423 (2013). WLF also filed a brief in

support of Petitioner when this case was before the

California Supreme Court.

The Allied Educational Foundation (AEF) is a

nonprofit charitable and educational foundation based

in Tenafly, New Jersey. Founded in 1964, AEF is

dedicated to promoting education in diverse areas of

study, such as law and public policy, and has appeared

‘ Pursuant to Supreme Court Rule 37.6, amici curiae state

that no counsel for a party authored this brief in whole or in part;

and that no person or entity, other than amici and their counsel,

made a monetary contribution intended to fund the preparation or

submission of this brief. More than 10 days prior to the due date,

counsel for amici provided counsel for Respondents with notice of

their intent to file. All parties have consented to the filing; letters

of consent have been lodged with the Court.

2

as amicus curiae in this Court on a number of

occasions.

In its seminal decision in Daimler AG uv.

Bauman, 134 8S. Ct. 746 (2014), the Court made clear

that the courts of a State lack personal jurisdiction

over a corporate defendant unless its activities within

the State give rise to the claims being asserted or

unless the corporation is “at home” within the forum

State. Daimler further clarified that a corporation,

even one that conducts substantial business in all 50

States, should be deemed “at home” in no more than

one or two of the States. Amici are concerned that the

rationale of the California Supreme Court, unless

overturned by this Court, would essentially negate

Daimler as an effective check on state court jurisdiction

over out-of-state corporate defendants. Amici are

further concerned that the decision below deprives

businesses of adequate means to structure their

conduct with some minimum assurance as to where

that conduct will and will not render them liable to

suit.

STATEMENT OF THE CASE

Like many corporations that sell products

nationwide, Petitioner Bristol-Myers Squibb Co.

(“BMS”) sells a large number of products in California.

For example, BMS’s Plavix sales in California between

2006 and 2012 totaled nearly $1 billion. This case

addresses whether those substantial sales are

sufficient to justify California’s exercise of jurisdiction

over claims filed by nonresidents who allege that their

purchase and use of Plavix—and their alleged injury

from such use—all occurred outside California.

3

A State’s exercise of personal jurisdiction over a

corporation based on business activity within the State

that is not directly related to events giving rise to the

litigation is often referred to as an exercise of “general

jurisdiction.” Daimler made clear that a State may not

exercise general jurisdiction over a corporation when,

as here, the corporation is neither incorporated in nor

has its principal place of business within the State,

even when the corporation has substantial sales within

the State. This case addresses whether nonresidents

may nonetheless invoke the California courts’ personal

jurisdiction over such a corporation by citing those very

same substantial sales as the basis for “specific

jurisdiction.”

These products liability actions involve

allegations that consumers from across the nation

suffered injuries after taking Plavix, a drug approved

by the Food and Drug Administration (FDA) for use in

preventing dangerous blood clots. A total of 661

plaintiffs—86 California residents and 575

nonresidents—joined together to file eight separate

complaints against BMS in March 2012 in San

Francisco Superior Court.” The 575 nonresident

plaintiffs claim no contacts with BMS’s California

activities or with California generally. Moreover,

although BMS derives substantial revenue from

* The decision by plaintiffs’ lawyers to file eight separate

complaints (each with fewer than 100 plaintiffs) was not

coincidental. Had any of the complaints included 100 or more

plaintiffs, BMS’s right to remove that complaint to federal court

under the Class Action Fairness Act (CAFA) would have been

beyond question. See 28 U.S.C. § 1332(d)(11)(B)G@) (authorizing

removal of a “mass action” in which the monetary claims of “100 or

more persons are proposed to be tried jointly.”).

4

California sales, those sales represent but a small

fraction of BMS’s overall sales, and California is not

the State in which BMS is incorporated (Delaware), not

the State in which it maintains its principal place of

business (New York), and not even one of the States in

which Plavix is manufactured.

The California Supreme Court nonetheless held

that California could maintain personal jurisdiction

over BMS with respect to the claims not only of the 86

California residents (an issue that BMS does not

contest) but also with respect to the 575 nonresident

plaintiffs (the “Respondents’”).

When the case first came before the California

Court of Appeal, it summarily denied BMS’s writ

petition (seeking review of the superior court's

conclusion that it could exercise general jurisdiction

over BMS based on the company’s substantial business

activity in California). Following the 2014 Daimler

decision, the California Supreme Court directed the

appeals court to address the merits of BMS’s petition.

It did so, and concluded that although Daimler

precluded assertion of general jurisdiction over BMS

with respect to the claims of the nonresident

defendants, California courts could still assert specific

jurisdiction over BMS. Pet. App. 9la-146a.

A sharply divided California Supreme Court

affirmed. Pet. App. la-90a. The four-justice majority

recognized that the Due Process Clause bars California

courts from exercising specific jurisdiction over BMS

unless Respondents can demonstrate that their claims

“arise out of or are related to [BMS’s] forum-related

activities.” Pet. App. 20a-2la. While it did not assert

5

that the claims of Respondents “arise out of’ any of

BMS’s California-based activities, the majority

concluded that BMS’s activities were sufficiently

“related to” those claims to warrant the exercise of

personal jurisdiction. /d. at 25a-35a.

The majority held that, in order to satisfy the

“related to” requirement, “the defendant’s activities in

the forum state need not be either the proximate cause

or the ‘but for’ cause of the plaintiffs injuries.” Id. at

22a. Instead, in accord with prior California Supreme

Court case law, the majority held that it is sufficient to

demonstrate “a substantial nexus or connection

between the defendcant’s forum activities and the

plaintiffs claims.” Jd. at 21a. It elaborated:

Under the substantial connection test, the

intensity of forum contacts and the connection of

the claim to those contacts are inversely related.

The more wide ranging the defendant’s forum

contacts, the more readily is shown a connection

between the forum contacts and the claim.

Thus, a claim need not arise directly from the

defendant's forum contacts in order to be

sufficiently related to the contact to warrant the

exercise of specific jurisdiction. Indeed, only

when the operative facts of the controversy are

not related to the defendant’s contact with the

state can it be said that the cause of action does

not arise from that contact.

Id. at 22a (citations omitted).

The majority acknowledged that Respondents

were not injured by Plavix in California, were not

6

treated in California, were not prescribed Plavix by

California doctors, and did not have their prescriptions

filled by California pharmacists. It further

acknowledged that BMS neither developed nor

manufactured Plavix in California, and that the

distribution chain for the Plavix supplied to

Respondents did not pass through California. The

majority based its “substantial connection” finding on

evidence that BMS: (1) extensively marketed Plavix to

California residents as part of a nationwide marketing

program; (2) contracted with McKesson Corp. (a

California corporation) to distribute Plavix and hired

several hundred salespersons within the State; and (3)

maintains facilities in California that conduct research

and development of other BMS products (but not

Plavix). Id. at 32a.

Justice Werdegar, joined by Justices Chin and

Corrigan, dissented. Pet. App. 46a-87a. He concluded,

“(T]he record contains no evidence connecting the Plavix

taken by any of the nonresident plaintiffs to California.”

Id. at 47a (emphasis in original). He argued that the

majority's conclusion that California could exercise

jurisdiction over BMS in connection with Respondents’

claims was based on a specific-jurisdiction standard

that conflicts with the standard adopted by this Court

and numerous other appellate courts. Jd. at 5la-77a.

He warned that the decision interferes with rational

business planning by undermining the ability of

businesses to predict the types of litigation to which

they expose themselves when they decide to undertake

activities within a State. Jd. at 79a-80a.

7

SUMMARY OF ARGUMENT

The petition raises an issue of exceptional

importance. As this Court has repeatedly reminded,

the Fourteenth Amendment's Due Process Clause

imposes strict limits on the authority of a state court to

exercise personal jurisdiction over out-of-state

defendants. See, e.g., J. McIntyre Machinery, Lid. v.

Nicastro, 564 U.S. 873, 881 (2011) (plurality) (“[T] hose

who live or operate primarily outside a State have a

due process right not to be subjected to judgment in its

courts as a general matter.”). Those limitations serve

both to protect litigants from inconvenient or distant

litigation and to recognize limits on the sovereignty of

each State with respect to affairs arising in other

States. World-Wide Volkswagen v. Woodson, 444 U.S.

286, 293 (1980). The decision below threatens to

obliterate those limitations by subjecting out-of-state

defendants to the jurisdiction of California courts based

on activities lacking any connection to California.

As Petitioner has demonstrated, review is

warranted to resolve the direct and long-standing

conflict—between the California Supreme Court and

numerous federal appeals courts as well as other state

supreme courts—regarding the scope of specific

jurisdiction. In adhering to its “substantial nexus or

connection” test, the court below explicitly disclaimed

any requirement that the defendant’s activities in the

forum State be the “proximate” cause, or even the “but

for” cause, of the plaintiffs’ injuries. Pet. App. 22a.

That holding directly conflicts with the numerous

appellate decisions, cited in the petition, that have

concluded that a plaintiffs claims do not “arise out of

or relate to” the defendant’s forum activities unless

8

those forum activities are at least a “but for’ cause of

the alleged injuries.

Amici will not repeat those citations here. It

suffices to say that WLF fully agrees with BMS’s

contention that review is warranted to resolve the

conflict between the California Supreme Court and

numerous other appellate courts regarding when the

plaintiffs claims can be said to “arise out of or relate

to” the defendant's forum activities. Amici write

separately to focus on two other points.

First, review is also warranted to resolve the

substantial conflict between the decision below and

this Court’s personal-jurisdiction decisions. The

Court’s decisions have never suggested that specific

jurisdiction is appropriate when, as here, the only

relationship between the plaintiffs’ claims and the

defendant's forum activities is a similarity of subject

matter, and when none of those forum activities played

any role in bringing about the plaintiffs’ alleged

injuries. As the Court stated categorically in a recent

specific-jurisdiction case, for a court to exercise

personal jurisdiction consistent with due process, “the

defendant’s suit-related conduct must create a

substantial connection with the forum State.” Walden

uv. Fiore, 1348. Ct. 1115, 1121 (2014) (emphasis added).

Respondents have not pointed to any “suit-related

conduct” by BMS that is connected to California.

Indeed, if the conduct to which Respondents

point—principally, BMS’s substantial general business

activity within California—suffices to create specific

jurisdiction with respect to their claims, then the due-

process limitations imposed by Daimler on the scope of

general jurisdiction will be rendered a dead letter.

9

Second, review is warranted because the petition

provides an exceptionally good vehicle for resolving the

personal-jurisdiction issue over which the lower courts

are so sharply conflicted. The facts of this case are

largely uncontested. The only dispute involves what

due-process test should be applied to the undisputed

facts. The California Supreme Court has expressly

disavowed adoption of a proximate-cause or “but for”

cause standard, in sharp contrast to the many appeals

courts that have held that specific jurisdiction is

unwarranted unless one or both of those standards are

satisfied. And that conflict is outcome-determinative;

amici do not understand Respondents to be arguing

that BMS’s California-based activities are even a “but

for” cause of their injuries.

The important role played by California in the

national economy also makes this an ideal vehicle for

resolving the conflict among lower-court decisions.

Given the size of the California market, any company

that aspires to conduct business on a nationwide basis

has no choice but to conduct business in California.

Yet, California courts have become a particularly

attractive destination for forum-shopping plaintiffs’

lawyers in search of courts thought to exhibit a pro-

plaintiff bias. Granting review in this case will resolve

the conflict in the context of a jurisdiction that plays an

increasing and outsized role in resolving disputes

between consumers and product manufacturers.

While the conflict among the lower courts

regarding when a plaintiffs claims “arise out of or

relate to” the defendant’s forum activities has festered

for decades, it has come more sharply into focus

following the 2014 Daimler decision. Before Daimler,

10

many lower courts asserted general jurisdiction over

out-of-state companies based on a finding that the

company engaged in a substantial, continuous, and

systematic course of business within the forum State.

As the court below recognized, Daimler held that such

assertions of general jurisdiction are “unacceptably

grasping’ and are inconsistent with due process

principles. Pet. App. 15a (citing Daimler, 134 S. Ct. at

761). As a result, lower courts have been forced to

grapple with increasing frequency with claims that a

defendant's substantial forum contacts are nonetheless

sufficient to justify assertion of jurisdiction over an out-

of-state defendant based on a _ specific-jurisdiction

theory. Review is warranted to provide the lower

courts with desperately needed guidance regarding

how te resolve such claims.

REASONS FOR GRANTING THE PETITION

I. THE DECISION BELOW CONFLICTS WITH THIS

COURT’S SPECIFIC-JURISDICTION DECISIONS

As this Court has long recognized, the Due

Process Clause of the Fourteenth Amendment limits

the authority of state courts to exercise personal

jurisdiction over nonresident defendants that do not

voluntarily consent to jurisdiction. See, e.g.,

J. McIntyre Machinery, 564 U.S. at 881 (plurality)

(“[T] hose who live or operate primarily outside a State

have a due process right not to be subjected to

judgment in its courts as a general matter.”). A state

court may exercise personal jurisdiction over a

nonresident defendant only if there exist “minimum

contacts” among the defendant, the litigation, and the

11

forum state. Jntl Shoe Co. v. Washington, 326 U.S.

310, 316 (1945). The “minimum contacts” requirement

serves two important functions: it protects the

defendant from being required to defend a lawsuit in

an inconvenient forum and it “acts to ensure that the

States through their courts, do not reach out beyond

the limits imposed on them by their status as coequal

sovereigns in a federal system.” World-Wide

Volkswagen, 444 U.S. at 292.

The Court has consistently held that a state

court may not exercise personal jurisdiction over an

out-of-state defendant simply because the defendant

has engaged in continuous and systematic activities

within the State. Rather, personal jurisdiction also

requires a showing that the defendant’s activities are

sufficiently connected to the claim. See, e.g., Daimler,

134 S. Ct. at 757 (“a corporation’s ‘continuous activity

of some sort within a state is not enough to support the

demand that the corporation be amenable to suits

unrelated to that activity”) (quoting Intl Shoe, 326

U.S. at 318); Shaffer, 433 U.S. at 204 (“the central

concern of the inquiry into personal] jurisdiction” is “the

relationship among the defendant, the forum, and the

litigation”) (emphasis added). As Daimler explained,

personal jurisdiction may not be exercised over

nonresident defendants based on claims “having

nothing to do with anything that occurred or had its

principal impact in” the forum state. Daimler, 1348S.

Ct. at 762.

A defendant is generally required to answer any

and all claims asserted in its “home” jurisdiction, even

if the claim bears no relationship to the jurisdiction.

12

The Court refers to an assertion of personal jurisdiction

where the defendant is “at home” as an exercise of

“general jurisdiction.” Goodyear, 564 U.S. at 919.

Daimler made plain, however, that an assertion of

general jurisdiction over a corporation can be sustained

in only two places: the State in which a corporation

maintains its principal place of business and the State

of incorporation. 134 S. Ct. at 760. In Daimler, the

Court rejected the plaintiffs’ request that it approve

“the exercise of general jurisdiction in every State in

which a corporation engages in a _ substantial,

continuous, and systematic course of business,”

characterizing the plaintiffs’ proposed formulation as

“too grasping.” Jd. at 761.

It is undisputed that BMS is not subject to

general jurisdiction in California. It is not

incorporated in California, nor does it maintain its

principal place of business in the State. Thus, for the

California courts to properly exercise personal

jurisdiction over BMS with respect to each of the tort

claims asserted by Respondents, it must do so on the

basis of “specific jurisdiction”—that is, a showing that

each claim “arises out of or relates to the defendant's

contacts with the forum.” Id. at 754.

A. The Court’s Case Law Establishes

that Respondents’ Claims Do Not

Arise out of or Relate to BMS’s

Contacts with California

In concluding that Respondents’ claims “arise

out of or relate to” BMS’s contacts with California, the

California Supreme Court principally relied on

13

evidence that BMS markets Plavix on a nationwide

basis and that its California marketing efforts are

similar to the allegedly misleading Plavix marketing

efforts undertaken by BMS in each of Respondents’

home States. Pet. App. 28a. The court concluded that

Respondents’ claims:

[A]re based on the same allegedly defective

product and the assertedly misleading

marketing and promotion of that product [as

asserted by other, California-based plaintiffs],

which allegedly caused injuries in and outside

the state. Thus, the nonresident plaintiffs’

claims bear a substantial connection with BMS’s

contacts in California.

Ibid.

In other words, as far as the California Supreme

Court is concerned, the requisite minimum contacts

among BMS, the forum, and the litigation can be

established even when, as here, “the nonresident

plaintiffs’ claims would be exactly the same if BMS had

no contact whatever with California.” Jd. at 29a. The

court rejected BMS’s argument that the existence of a

nationwide Plavix marketing campaign was

insufficient “to establish relatedness for purposes of

minimum contacts,” stating that that argument

“rest[ed] on the invalid assumption that BMS’s forum

contacts must bear some substantive legal relevance to

the nonresident plaintiffs’ claims.” Jd. at 30a.

Yet, the assumption that the court deemed

“invalid”—that the defendant's forum contacts must

14

“bear some legal relevance” to the plaintiffs’ claims in

order to satisfy the “arise out of or relate to”

requirement—is an assumption that has underpinned

every one of this Court’s specific-jurisdiction decisions.

Thus, for example, in determining whether

California courts could exercise specific jurisdiction

over Florida residents in connection with a libel claim

asserted by a California resident, the Court focused its

inquiry solely on forum contacts that were legally

relevant to the libel claim. Calder v. Jones, 465 U.S.

783 (1984). The defendants were the writer and editor

of an article that was widely circulated by the National

Enquirer in California. Although the defendants were

responsible for numerous other articles that were

circulated in California, the only forum contacts upon

which the Court relied were those related to the article

that allegedly defamed the plaintiff: “petitioners are

primary participants in an alleged wrongdoing

intentionally directed at a California resident, and

jurisdiction over them is proper on that basis.” Jd. at

790. But under the California Supreme Court’s

expansive understanding of specific jurisdiction, the

defendants’ authorship of articles directed at other

California residents would have been sufficient by

itself to satisfy minimum-contact requirements.

Similarly, in MHelicopteros Nacionales de

Columbia, S.A. v. Hall, 466 U.S. 408 (1984), the Court

determined that the defendant's numerous contacts

with the forum State (Texas) were insufficient to

permit Texas to exercise personal jurisdiction because

those contacts did not arise out of or relate to the

plaintiffs’ claims (which involved injuries arising from

15

a helicopter crash in Peru). Yet the decision almost

surely would have come out the other way under the

specific-jurisdiction standard adopted by the California

Supreme Court.

Although the ill-fated helicopter services were

not provided in Texas, the defendant engaged in

numerous helicopter-related activities within the State,

including: (1) purchase of its helicopters and spare

parts within Texas; (2) sending its pilots to Texas for

flight training; (3) regularly sending employees to

Texas to consult with the helicopter manufacturer;

(4) sending its chief executive officer to Houston to

negotiate the helicopter service contract with the

plaintiffs’ employer; and (5) accepting checks written

by the Texas-based employer and drawn on a Texas

bank. None of those Texas-based activities had any

“legal relevance” to the plaintiffs’ claims that the

defendant operated its helicopter in a negligent

manner. But because the California Supreme Court

does not deem “legal relevance” a prerequisite for

establishing specific jurisdiction under iis “significant

nexus or connection” test, those numerous forum

contacts (all of which related to the defendant’s

helicopter operations) seemingly would have been more

than sufficient for the California Supreme Court to

uphold personal jurisdiction.

Most recently, the Court held that a Nevada

court lacked specific jurisdiction over claims against a

DEA agent arising from his seizure of cash at the

Atlanta airport from a Nevada resident about to board

a flight home to Nevada. Walden v. Fiore, 134 S. Ct.

1115 (2014). The Court conceded that the injury

16

caused by the defendant’s allegedly tortious conduct

occurred in Nevada by virtue of the plaintiffs Nevada

residency and that the defendant was well aware of the

plaintiffs residency. Jd. at 1125. But the Court

concluded that that evidence was insufficient to

establish that the plaintiffs claims “arose out of or

were related to” relevant forum contacts. It explained

that “[flor a State to exercise jurisdiction consistent

with due process,” it is the defendant’s “suit-related

conduct” that must create a “substantial connection”

with the forum State, id. at 1121, and the

happenstance of the plaintiffs residency was unrelated

to the defendant’s allegedly tortious conduct in Atlanta.

In other words, it made no difference whether the DEA

agent might have had numerous other connections

with Nevada that were not “suit related.” In the

absence of evidence that the defendant’s conduct

toward the plaintiff and his claim had some connection

with Nevada, the Due Process Clause prohibited a

Nevada court from exercising personal jurisdiction.

The decision below, which based a finding of specific

jurisdiction on BMS forum contacts that were not “suit

related,” cannot be reconciled with Walden.

As Justice Werdegar explained in dissent:

Of the post-International Shoe decisions in

which the high court actually found a factual

basis for speciiic jurisdiction, each featured a

direct link between forum activities and the

litigation. (See Burger King Corp. v. Rudzewicz,

(1985) 471 U.S. 462, 479-80 [specific jurisdiction

in Florida courts proper where franchise dispute

“grew directly out of” contract formed between

17

Florida franchisor and Michigan franchisee,

whose breach caused “caused foreseeable

injuries to the corporation in Florida.”])

Pet. App. 53a-54a.

In rejecting BMS’s argument that California

courts lack personal jurisdiction to adjudicate claims

against BMS brought by “nonresident plaintiffs [who]

have no connection to and did not suffer any Plavix-

related injuries in the state,” the California Supreme

Court relied on this Court’s decision in Keeton v.

Hustler Magazine, Inc., 465 U.S. 770 (1984). Pet. App.

33a-34a. It asserted, “As the high court explicitly

declared in Keeton, a ‘plaintiffs residence in the forum

State is not a separate requirement, and lack of

residence will not defeat jurisdiction established on the

basis of the defendant’s contacts.” Jd. at 34a (quoting

Keeton, 465 U.S. at 780). The court badly misconstrued

Keeton. Although the plaintiff in that case did not

reside in the forum State (New Hampshire), she

suffered injuries there. The defendant’s allegedly

libelous publication was widely circulated in New

Hampshire, causing injury to the plaintiffs reputation

within the State. Indeed, Keeton’s heavy reliance on

the defendant’s litigation-related contacts with New

Hampshire in upholding the exercise of personal

jurisdiction by the New Hampshire court directly

undercuts the California Supreme Court’s position.

Keeton quite clearly does not support the claim that

exercise of specific jurisdiction is proper even though

Respondents “did not suffer any Plavix-related injuries

in the State.” Jd. at 33a-34a.

18

Particularly troubling is the California Supreme

Court’s reliance on the fact that “BMS maintains

research and laboratory facilities in California, and it

presumably enjoys the protection of our laws related to

those activities.” Pet. App. 29a. Even though the court

conceded that none of those facilities has ever

conducted any research regarding Plavix, it concluded

that the existence of those facilities “provides an

additional connection between the nonresident

plaintiffs’ claims and the company’s activities in

California.” Jbid. The Court justified that “substantial

nexus and connection” finding on the fact that the

complaint includes claims that other BMS research

facilities located in other States were responsible for

the allegedly negligent development and design of

Plavix. That justification—which is based on nothing

more than a similarity of function between the

California-based facilities and the non-California BMS

facilities responsible for BMS’s allegedly tortious

conduct—well illustrates the essentially limitless

nature of California’s assertion of personal jurisdiction

over nonresident companies that conduct business

within the State. Review is warranted to resolve the

conflict between the decision below and this Court’s

specific jurisdiction case law.

19

B. The California Supreme Court’s

Expansive Definition of Specific

Jurisdiction Ignores Daimler’s

Admonition to Keep Rules Governing

Jurisdiction Simple in Order to

Promote Greater Predictability

The Court explained in Daimler that it adopted

its rule governing general jurisdiction over

corporations in part because of its simplicity.

Ascertaining a corporation’s principal place of business

and its place of incorporation—the attributes that

Daimler held are determinative in assessing where a

corporation is “at home’—is a _ relatively

straightforward exercise:

Those affiliations have the virtue of being

unique—that is, each ordinarily indicates only

one place—as well as easily ascertainable. Cf.

Hertz Corp. v. Fried, 559 U.S. 77, 94 (2010)

(“Simple jurisdictional rules . .. promote greater

predictability.”). These bases afford plaintiffs at

least one clear and certain forum in which a

corporate defendant may be sued on any and all

claims.

Daimler, 134 8S. Ct. at 760.

By upholding personal jurisdiction under its

expansive definition of specific jurisdiction, the

California Supreme Court has adopted a jurisdictional

rule that is anything but simple. Among other things,

the court’s “substantial nexus or connection test”

establishes a sliding scale, under which a showing that

20

the defendant has numerous forum’ contacts

(regardless whether they are litigation-related) reduces

the required showing of connection between those

contacts and the plaintiffs’ claim. Pet. App. 22a. But

the unspecified degree of reduction is left to be resolved

by California courts on a case-by-case basis. /d. at 35.

As a result, out-of-state corporations are left

with little guidance regarding what activity in

California will render them subject to the jurisdiction

of California courts for claims arising outside the State.

That result is inconsistent with Daimler’s goal of

predictability and warrants review by this Court.

The court below did not dispute the highly

attenuated nature of the relationship between

California and the Respondents’ claims. It nonetheless

concluded that California courts could exercise specific

jurisdiction over Respondents’ claims based on a

smorgasbord of BMS forum contacts. At no point did it

specify which of those contacts, by themselves, would

be sufficient to establish personal jurisdiction. Indeed,

although the court noted that some Plavix-based

products-liability claims have been filed by California

residents against BMS based on theories similar to

those raised by Respondents, the court never specified

whether the existence of such claims was crucial to its

personal-jurisdiction finding.

A rule so amorphous provides corporations with

no guidance whatsoever. The California Supreme

Court insists that the Respondents’ claims “arise out of

or are connected with” BMS’s contacts, but nonresident

defendants are left to wonder precisely what that

21

connection consists of. One plausible interpretation:

manufacturers that market their products on a

nationwide basis are subject to suit in each of the 50

States with respect to any claim arising out of the sale

of their products. BMS is hardly unique among

manufacturers in distributing its products pursuant to

a nationwide distribution and marketing plan. But if

that is the California Supreme Court’s rule, little is left

of Daimler; the court will simply have substituted a

new name (specific jurisdiction) for the exorbitant

understanding of general jurisdiction rejected by

Daimler as too grasping.

As Daimler explained in rejecting the Ninth

Circuit's expansive understanding of personal

jurisdiction over nonresident defendants based on

claims arising outside the forum, “Such exorbitant

exercises of all-purpose jurisdiction would scarcely

permit out-of-state defendants ‘to structure their

primary conduct with some minimum assurance as to

where that conduct will and will not render them liable

to suit.” Daimler, 1348. Ct. at 761-62 (quoting Burger

King Corp. v. Rudzewicz 471 U.S. 462, 472 (1985)).

The court below dismissed those concerns,

asserting that BMS “embraced th[e] risk” of being sued

in California by nonresident plaintiffs when it decided

to include California within its nationwide Plavix sales

efforts. Pet. App. 33a. But it is unrealistic to expect

large manufacturers to exclude California from their

marketing efforts. More importantly, the court’s

rationale is inconsistent with Daimler’s condemnation

of “exorbitant exercises of all-purpose jurisdiction” by

California courts based merely on evidence that the

22

defendant engaged in continuous and systematic

business activity within the State. Review is

warranted to provide companies with clearer guidance

regarding what greater extent of forum contacts,

beyond simply conducting business on a continuous

and systematic basis, is sufficient to expose them to the

specific jurisdiction of forum courts.

IL. THE PETITION IS AN EXCELLENT VEHICLE FOR

RESOLVING THE CONFLICT AMONG THE LOWER

COURTS

Review is also warranted because the petition

provides an exceptionally good vehicle for resolving the

personal-jurisdiction issue over which the lower courts

are so sharply conflicted. Indeed, the California

Supreme Court expressly recognized that the case

turns solely on issues of law. It stated:

(T]here appears to be no material factual

conflicts nor any dispute over any factual

findings in the superior court. We, therefore,

consider the possible exercise of each type of

jurisdiction as a matter of law and on the

undisputed facts.

Pet. App. 8a-9a. Accordingly, there is no danger that

a disputed factual record could muddle efforts by the

Court to announce a clear rule governing due-process

limits on a state court’s exercise of specific jurisdiction.

It is undisputed that BMS properly raised its

due-process objection to personal jurisdiction at all

stages of the litigation. The superior court, the appeals

23

court, and the California Supreme Court each

addressed the merits of that objection.

Moreover, the split between the California

Supreme Court and other appellate courts that have

adopted a more restrictive view of specific jurisdiction

is outcome-determinative. The courts below did not

assert that any of BMS’s California activity was the

proximate cause, or even a _ but-for cause, of

Respondents injuries. Indeed, the California Supreme

Court expressly held that “the defendant’s activities in

the forum state need not be either the proximate cause

or the ‘but for’ cause of the plaintiffs injuries” to

warrant an exercise of specific jurisdiction. Pet. App.

22a. Accordingly, there can be no dispute that were

this case to come before one of the many federal

appeals courts and state supreme courts that impose

either a proximate cause or a “but for” cause

requirement, Respondents’ claims would have been

dismissed for lack of personal jurisdiction.

Indeed, the California Supreme Court implicitly

recognized the conflict between its decision and the

appellate decisions relied on by BMS. BMS’s

California brief cited Glater v. Eli Lilly & Co., 744 F.2d

213 (1st Cir. 1984), as an example of a case in which an

appellate court determined that products-liability

claims filed by nonresident plaintiffs against a

nonresident drug company should not be deemed to

“arise out of or relate to” the defendant’s forum

activities because the plaintiffs had not established a

causal relationship between the forum activities and

the plaintiffs’ injuries. The court did not challenge

BMS’s characterization of the First Circuit’s holding.

24

Instead, its principal response was that Glater was

issued before Vons Companies v. Seabest Foods, Inc.,

14 Cal. 4th 434 (1996), the decision in which the

California Supreme Court first announced its

“substantial nexus or connection” test, and thus that

the First Circuit did not “ha[ve] the benefit of our

reasoning in Vons” when it ruled. Pet. App. 32a. By

expressing a hope that the First Circuit would have

ruled differently had it had access to Vons, the

California court tacitly conceded that its “substantial

nexus or connection” standard directly conflicts with

the First Circuit’s proximate-cause standard.

Review is particularly warranted in light of the

important role played by California in the national

economy. The State’s population now exceeds 39

million, and a significant portion of all consumer goods

sold in the United States are sold there. As Justice

Werdegar noted, any company that sells its products on

a nationwide basis will face considerable competitive

pressure to market its products in California. Pet.

App. 84a. Yet, the California Supreme Court has now

warned all such companies in essence that if they

market their goods in California, they can be haled into

California courts to answer claims arising from product

sales in any of the 50 States. Because California’s

immense size means that the decision below is likely to

have a significant impact on commerce nationwide, the

Court should grant review to determine whether this

new litigation burden is constitutionally permissible.

Review is also warranted because the decision

below threatens to place California courts in the role of

adjudicating disputes that arose in other States and

25

thereby threatens to interfere with the interests of

those other States in adjudicating disputes arising

within their borders. As the Court explained in World-

Wide Volkswagen, the “minimum contacts” limitation

on personal jurisdiction also “acts to ensure that the

States, through their courts, do not reach out beyond

the limits imposed on them by their status as coequal

sovereigns in a federal system. ... [W]Je have never

accepted the proposition that state lines are irrelevant

for jurisdictional purposes, nor could we, and remain

faithful to the principles of interstate federalism

embodied in the Constitution.” World-Wide

Volkswagen, 444 U.S. at 292-93. By granting review,

the Court can ensure that California does not encroach

on the sovereign rights of other States.

Finally, further delay is unwarranted in

resolving conflicting lower-court decisions regarding

when a plaintiffs claims “arise out of or relate to” the

defendant’s forum activities. Daimler imposed strict

due-process limits on state-court exercise of general

jurisdiction, thereby causing plaintiffs’ attorneys to

shift gears and cite specific jurisdiction as the basis of

their overbroad jurisdictional claims. Indeed, Daimler

has been cited more than 1,000 times in federal and

state-appellate court decisions issued in the past two

years—usually in connection with specific-jurisdiction

claims. Given the large number of cases coming before

the lower courts on a regular basis which call for a

decision on specific-jurisdiction issues, early resolution

of the conflict identified by the petition would provide

valuable guidance to those courts.

26

CONCLUSION

The Court should grant the Petition.

November 10, 2016

Respectfully submitted,

Richard A. Samp

(Counsel of Record)

Mark S. Chenoweth

Washington Legal Found.

2009 Mass. Ave., NW

Washington, DC 20036

202-588-0302

rsamp@wlf.org