US Supreme Court hands wins to business interests

A general view of the U.S. Supreme Court building in Washington U.S

A general view of the U.S. Supreme Court building in Washington U.S

The justices, in an 8-1 ruling, backed Bristol-Myers Squibb in a case against the state of California.

The out-of-state people argued it made sense for their cases to go forward in California because the courts there were already considering identical claims by state residents.

The justices, voting 8-1, said the California Supreme Court was wrong to let nearly 600 non-Californians join 86 state residents in claiming Bristol-Myers misrepresented the risk of heart attacks and strokes.

The plaintiffs had claimed the drug manufacturer misrepresented the risks of strokes and heart attacks due to Plavix. The majority decision said nonstate plaintiffs had failed to establish a strong connection between their alleged injury and Bristol-Myers actions in California. (BMS) [corporate website]. BMS manufactures and sells Plavix, a prescription drug that prevents blood clots by thinning the blood.

Only Justice Sonia Sotomayor voted to affirm the California courts' rulings. The mere fact that other plaintiffs were prescribed, obtained, and ingested Plavix in California-and allegedly sustained the same injuries as did the non-residents-does not allow the State to assert specific jurisdiction over the nonresidents' claims.

The nonresidents weren't prescribed Plavix in the state, didn't buy or take the drug there, and weren't injured by the drug there, Alito said. The briefing and argument suggested that several of the justices regarded this as an effort to circumvent the limits Daimler AG imposed on state-court jurisdiction.

Also last month, the U.S. Supreme Court narrowed the number of places patent-infringement suits could be brought, holding unanimously that a corporation is deemed to reside only in the state in which it is incorporated.

In 19 business-related cases that the U.S. Chamber of Commerce participated in by filing briefs backing companies, the lobbying group was on the winning side in 13 of them, with two yet to be decided.

BMS is incorporated in DE and headquartered in NY, with more than 50 percent of its workforce employed in NY and New Jersey. The California Supreme Court ruled that, because the nonresident claims were similar to those of California residents, those activities were sufficient.

Justice Alito's opinion explains that the approach of the California court "is hard to square with our precedents", in large part because it "resembles a loose and spurious form of general jurisdiction". "It will make it impossible to bring a nationwide mass action in state court against defendants who are "at home" in different States". Class actions can still be brought in states with general jurisdiction over Bristol-Myers Squibb-either NY or DE, as conceded by the company.

There "is nothing unfair about subjecting a massive corporation to suit in a state for a nationwide course of conduct that injures" state residents and nonresidents alike, Sotomayor wrote.

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