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Supreme Court Product Liability Ruling
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SCOTUS Ruling Instantly Touches Off Mistrial in Missouri Talc Case
Jun 19, 2017 | The National Law Journal
By Amanda Bronstad
In a dramatic end to a pivotal trial over Johnson & Johnson's baby powder, a Missouri judge has granted a mistrial in light of the U.S. Supreme Court's ruling on Monday in Bristol-Myers Squibb v. Superior Court of California. -
On State Court Jurisdiction, SCOTUS Holds the Line
Jun 19, 2017 | CATO Institute
By Walter Olson
While it’s apt to get lost in news coverage of this morning’s bigger rulings, a moment should be set aside to applaud today’s solid 8-1 Supreme Court decision in Bristol-Myers Squibb, together with the related 8-0 outcome from May 30 in the case of BNSF v. Tyrrell. -
Supreme Court limits jurisdictional reach of state courts in Plavix class action
Jun 19, 2017 | ABA Journal
By Debra Cassens Weiss
The U.S. Supreme Court ruled Monday that California courts did not have specific jurisdiction to hear the claims of nonresidents in a Plavix class action when those plaintiffs didn’t buy or ingest the drug in the state. -
Mistrial declared in talcum powder suit after U.S. Supreme Court limits where companies can be sued
Jun 19, 2017 | The Saint Louis Post Dispatch
A St. Louis judge declared a mistrial Monday in a talcum powder trial underway in St. Louis Circuit Court after the U.S. Supreme Court imposed limits on where injury lawsuits may be filed. -
Companies Get New Suit Limits as Supreme Court Backs Bristol-Myers
Jun 19, 2017 | Bloomberg Politics
By Greg Stohr
The U.S. Supreme Court gave companies a new tool to defeat some legal claims, siding with Bristol-Myers Squibb Co. in a bid to limit a consumer lawsuit in California over its Plavix blood thinner. -
Bristol-Myers v. Sup. Ct.: Supreme Court Restricts Specific Jurisdiction and Limits Forum Shopping
Jun 20, 2017 | JD Supra
By Irina Dashevsky, Matthew Goodin, and Russell Perdew
In Bristol-Myers Squibb Co. v. Sup. Ct. of Calif., 2017 WL 2621322 (2017), the U.S. Supreme Court continued its push against forum shopping by holding that California state courts do not have specific personal jurisdiction over defendants for nonresident plaintiffs’ claims that arose outside of California. -
Supreme Court Further Curbs Plaintiffs' Venue Shopping With Bristol-Myers Ruling
Jun 19, 2017 | FOX Business
By Jess Braven
The Supreme Court on Monday dealt a blow to consumer plaintiffs by limiting where lawsuits against companies with business in multiple states can be heard. -
Supreme Court Place Location Limits on Personal Injury Suits
Jun 20, 2017 | Legal Scoops
A new Supreme Court ruling has placed limits on where companies can be sued in personal injury lawsuits. -
U.S. Supreme Court again limits where companies can be sued
Jun 20, 2017 | Reuters
By Andrew Chung
The Supreme Court on Monday slapped limits on where injury lawsuits may be filed for the second time in three weeks, again siding with businesses that want to prevent plaintiffs from "shopping" for friendly courts for their cases. -
Supreme Court’s Decision In Bristol-Myers Squibb v. Superior Court Rejects Expansive View Of Specific Jurisdiction
Jun 19, 2017 | Lexology
By Mayer Brown LLP
We’ve previously blogged about Bristol-Myers Squibb v. Superior Court (“BMS”), in which the Supreme Court granted certiorari to review a decision of the California Supreme Court that adopted an unusual—and extraordinarily expansive—view of California courts’ power to exercise specific personal jurisdiction over a defendant. -
High Court Sides With Drugmaker on Plavix Claims
Jun 19, 2017 | Courthouse News Service
By Dan Mccue
The Supreme Court on Monday held that hundreds of out-of-state residents can’t sue Bristol-Myers Squibb Co. in California state court over harmful reactions they had to the blood thinner Plavix. -
The U.S. Supreme Court Has Been Incredibly Pro-Business This Term
Jun 19, 2017 | Fortune
The U.S. Supreme Court has sided with business interests in a series of cases in its current term, which began in October and is due to end next week. -
U.S. Supreme Court ruling threatens massive talc litigation against J&J
Jun 20, 2017 | Reuters
By Nate Raymond
Johnson & Johnson is seizing upon a U.S. Supreme Court ruling from Monday limiting where injury lawsuits can be filed to fight off claims it failed to warn women that talcum powder could cause ovarian cancer.
Traditional Media
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SCOTUS Ruling Instantly Touches Off Mistrial in Missouri Talc Case
Jun 19, 2017 | The National Law Journal
By Amanda Bronstad
In a dramatic end to a pivotal trial over Johnson & Johnson's baby powder, a Missouri judge has granted a mistrial in light of the U.S. Supreme Court's ruling on Monday in Bristol-Myers Squibb v. Superior Court of California.
Rex Burlison, a judge on the 22nd Circuit Court in St. Louis, granted a motion brought by Johnson & Johnson on Monday that cited the Bristol-Myers ruling, which tightened the jurisdictional rules over where corporate defendants can be sued, particularly in mass torts involving dozens of plaintiffs in a single case.
In its motion, Johnson & Johnson had sought the mistrial in a case called Swann v. Johnson & Johnson, which involves the claims of more than 60 women, many of whom were not from Missouri. The family members of three of those women, all deceased, were the plaintiffs in this month's trial. Only one was from Missouri.
"Under the reasoning of Bristol-Myers, the mere fact that nonresident plaintiffs have joined their claims with those of a handful of Missouri residents does not suffice to give rise to personal jurisdiction over the Johnson & Johnson defendants with respect to their claims."
Johnson & Johnson spokeswoman Carol Goodrich said in a statement: "We're pleased our request for a mistrial was granted.
The mistrial decision could have dramatic implications for the rest of the Missouri trials, the next of which was slated for August. The bulk of the 1,700 women who have alleged they got ovarian cancer from prolonged use of talcum powder have ended up bringing their claims in suits in Missouri.
But lead plaintiffs attorney Ted Meadows immediately refuted the idea that Bristol-Myers sounded the end of the Missouri talcum powder trials.
"After reviewing this morning's Supreme Court ruling, and based on evidence and statements now in the record, we believe this litigation can go forward in Missouri courts," wrote Meadows, principal at Beasley, Allen, Crow, Methvin, Portis & Miles in Montgomery, Alabama, in an email. "We plan to conduct additional discovery and depositions to confirm this position, and look forward to that opportunity."
But he also acknowledged that the cases might end up somewhere else.
"We're prepared to file these cases in courts across the nation should that be necessary," he added.
Johnson & Johnson has so far lost jury verdicts in Missouri totaling roughly $300 million. Last month, a Missouri jury awarded $110 million in an individual case. Johnson & Johnson won one verdict earlier this year.
For this month's trial, which began with opening statements on June 9, Johnson & Johnson had brought in a trial team that included Debra Pole of Sidley Austin and James T. Smith at Blank Rome.
Johnson & Johnson had unsuccessfully asked Burlison to halt the trial. It also had unsuccessfully asked the U.S. Court of Appeals for the Eighth Circuit to toss the Missouri plaintiff, the husband of a woman who died from ovarian cancer in 2010, on the ground that he had engaged in "blatant forum shopping" by dismissing his claims in order to join them into the Swann case.
Johnson & Johnson also cited Bristol-Myers in its appeal of a $72 million verdict now before the Missouri Court of Appeals, arguing that most of the women with talcum powder claims have improperly sued in Missouri.
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On State Court Jurisdiction, SCOTUS Holds the Line
Jun 19, 2017 | CATO Institute
By Walter Olson
While it’s apt to get lost in news coverage of this morning’s bigger rulings, a moment should be set aside to applaud today’s solid 8-1 Supreme Court decision in Bristol-Myers Squibb, together with the related 8-0 outcome from May 30 in the case of BNSF v. Tyrrell. Both cases arose from state courts’ attempts to grab jurisdiction over out-of-state corporations for purposes of hearing lawsuits arising from out-of-state conduct affecting out-of-state complainants. And in both instances—with only Justice Sonia Sotomayor still balking—the Justices made clear that some states’ wish to act as nationwide regulators does not allow them to stretch the constitutional limits on their jurisdiction that far.
For background on the cases, see our April post. We wondered then whether the consensus of Justices displayed in the benchmark 2014 Daimler case would endure rather than be splintered, and the answer was yes, it did and has. Justice Sotomayor, sticking to a once popular position, is still convinced that if states want to do a certain amount of long-arm collaring of cases involving interstate businesses that arose elsewhere and might fit conveniently into their docket, well, that’s fair enough for government work. That led her to file a lone separate partial concurrence in BNSF, as against a majority opinion written by Justice Ruth Ginsburg (who has authored much of the Court’s modern jurisprudence in this area) and an outright dissent in today’s decision in Squibb, authored by Justice Samuel Alito. To no one’s surprise, new Justice Neil Gorsuch joined the majority in both cases.
Many commenters will inevitably group these cases with last month’s 8-0 decision in the patent venue case of TC Heartland v. Kraft Foods, which I described as “a landmark win for defendants in patent litigation—and, on a practical level, for fairer ground rules in procedure.” To be sure, the underlying legal materials were completely different; TC Heartland involved the interpretation of wording in a federal statute. What united the three cases with Daimler is that the contemporary Court is keenly aware of the danger that the tactical use of forum-shopping will eclipse the merits in many categories of high-stakes litigation, turning potentially losing cases into winners through the chance to file them in a more friendly court.
That insight might prove significant at a time when forum-shopping has come to play a prominent role in high-profile ideological litigation—with conservatives running to file suit in the Fifth Circuit, liberals in the Ninth.
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Supreme Court limits jurisdictional reach of state courts in Plavix class action
Jun 19, 2017 | ABA Journal
By Debra Cassens Weiss
The U.S. Supreme Court ruled Monday that California courts did not have specific jurisdiction to hear the claims of nonresidents in a Plavix class action when those plaintiffs didn’t buy or ingest the drug in the state.
The Supreme Court ruled (PDF) 8-1 in a class action suit that claimed the blood-thinning drug caused bleeding and strokes.Justice Samuel Anthony Alito Jr. wrote the majority opinion finding that California courts did not have jurisdiction over the nonresidents’ claims against Bristol-Myers Squibb, which is incorporated in Delaware and headquartered in New York.
The company sells and markets Plavix in California, and does research there. The California Supreme Court ruled that, because the nonresident claims were similar to those of California residents, those activities were sufficient.
The U.S. Supreme Court reversed. Allowing the nonresidents’ claims would violate the due process clause, the court held. The state supreme court erred, Alito said, by allowing the suit without identifying an adequate link between the state and 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 decision concerned specific jurisdiction, which is one of two ways that plaintiffs can establish a defendant has sufficient contact with a state so that courts can exercise personal jurisdiction in a case.
Specific jurisdiction is based on the defendant’s contacts with the state giving rise to the cause of action, while general jurisdiction is based on whether the defendant is “at home” in the state. (University of California at Irvine law dean Erwin Chemerinsky explains the differences in this ABA Journal article previewing the Bristol-Myers Squibb case.)
Alito said there was no personal jurisdiction over the nonresidents’ claims because they didn’t suffer any harm in the state.
The ruling, he said, “will not result in the parade of horribles that respondents conjure up.” Class actions can still be brought in states with general jurisdiction over Bristol-Myers Squibb—either New York or Delaware, as conceded by the company.
Justice Sonia Sotomayor dissented. “I fear the consequences of the court’s decision today will be substantial,” she wrote. “The majority’s rule will make it difficult to aggregate the claims of plaintiffs across the country whose claims may be worth little alone. It will make it impossible to bring a nationwide mass action in state court against defendants who are ‘at home’ in different states. And it will result in piecemeal litigation and the bifurcation of claims.”
Neal Katyal of Hogan Lovells argued the case for Bristol-Myers Squibb. In a statement, he said his client is hopeful the decision will provide litigants more certainty regarding where lawsuits can be heard. “At its core,” he said, “this decision was about basic principles of federalism and fairness in our legal system.”
The case is Bristol-Myers Squibb Co. v. Superior Court of California.
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Mistrial declared in talcum powder suit after U.S. Supreme Court limits where companies can be sued
Jun 19, 2017 | The Saint Louis Post Dispatch
ST. LOUIS • A St. Louis judge declared a mistrial Monday in a talcum powder trial underway in St. Louis Circuit Court after the U.S. Supreme Court imposed limits on where injury lawsuits may be filed.
It was the second time in three weeks that the court had sided with businesses that want to prevent plaintiffs from “venue shopping” for friendly courts for their cases.
In an 8-1 ruling, the justices overturned a lower court’s decision that had allowed hundreds of out-of-state patients who took Bristol-Myers Squibb’s blood-thinning medication Plavix to sue the company in California.
State courts cannot hear claims against companies that are not based in the state when the alleged injuries did not occur there, the justices ruled.
The Supreme Court on May 30 reached a similar conclusion in a separate case involving out-of-state injury claims against Texas-based BNSF Railway Co.
The mistrial in St. Louis was declared in a trial that started June 5 in front of St. Louis Circuit Judge Rex Burlison. A Webster Groves man and two out-of-state plaintiffs sued Johnson & Johnson and its supplier Imerys Talc America over a claim that talcum powder in its products caused ovarian cancer.
In Burlison’s courtroom Monday, Jim Onder, whose firm has represented plaintiffs in each of the six trials that have been held in St. Louis, and other plaintiffs’ lawyers argued that the latest talcum powder trial should continue because Johnson & Johnson and Imerys use a company with a plant in Union in Franklin County to package and label talc products. That company is Pharma Tech Industries. The plaintiffs’ lawyers also said they believed the court had jurisdiction because one of the three plaintiffs for this trial is a Webster Groves man whose wife died of ovarian cancer in 2011.
Lawyers for Johnson & Johnson and Imerys argued that Pharma Tech was simply one of the company’s contractors, playing no role in establishing a court’s jurisdiction over out-of-state plaintiffs.
“We’re pleased our request for a mistrial was granted,” a Johnson & Johnson spokeswoman said.
Onder said the U.S. Supreme Court decision is “horrible to judicial economy,” because it means cases cannot be consolidated and tried in one place, slowing the system down.
He said he still believes Burlison’s ruling gives plaintiffs a chance to try to prove that actions by Pharma Tech hurt his clients. That would allow claims for some 1,100 other plaintiffs to still be heard in St. Louis.
The judge said he did not believe it was fair for Johnson & Johnson to have to defend what are new claims over Pharma Tech’s involvement in the plaintiffs’ attempts to establish jurisdiction.
Onder said Pharma Tech probably would be added as a defendant in future lawsuits. A Pharma Tech representative could not immediately be reached Monday.
In light of Burlison’s ruling, talcum powder plaintiffs in St. Louis will try to prove that they used and were injured by Johnson & Johnson products actually processed in Missouri, according to former St. Louis University Dean Mike Wolff.
Missouri’s “joinder rule” says that two or more plaintiffs who live either in- or out-of-state can join the same lawsuit if their claims arise out of the “same transaction or occurrence or series of transactions or occurrences,” Wolff said. The Supreme Court’s decision challenges the rule and requires a stronger connection between a plaintiff and the state where they sue.
“What the talcum powder plaintiffs are trying to do is say that there’s a Missouri connection,” Wolff said. “In the Bristol-Myers Squibb case, the plaintiffs could not show any connection between the injured plaintiffs outside the state of California and any activity in the state.”
The Supreme Court ruling Monday could wipe out five previous verdicts from trials in St. Louis against Johnson & Johnson. Four of five trials over the past 16 months ended in plaintiff’s verdictsexceeding $300 million. The four verdicts against the company have been appealed, and the appeals court had said it would await the Bristol-Myers Squibb decision before ruling.
Companies typically can be sued in a state where they are headquartered or incorporated, as well as where they have important ties. Businesses want to limit the ability of plaintiffs to shop for courts in states with laws conducive to injury lawsuits.
Plaintiffs contend that corporations are seeking to squeeze their access to compensation for injuries by denying them their day in state courts.
The underlying lawsuits filed in 2012 against Bristol-Myers and California-based drug distributor McKesson Corp. involved 86 California residents and 575 non-Californians, alleging Plavix increased their risk of stroke, heart attack and internal bleeding.
Bristol-Myers argued it should not face claims in California by plaintiffs who do not live in the state. The company is incorporated in Delaware and headquartered in New York.
The California Supreme Court ruled in August 2016 that it could preside over the case because Bristol-Myers conducted a national marketing campaign and sold nearly $1 billion of the drug in the state.
Writing for the Supreme Court majority on Monday, Justice Samuel Alito said the California court was wrong to rule that it could hear the case “without identifying any adequate link between the state and the nonresidents’ claim.”
In a dissenting opinion, Justice Sonia Sotomayor predicted that the Supreme Court’s ruling will make it harder to consolidate lawsuits against corporations in state courts and lead to unfairness for individual injury plaintiffs.
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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Companies Get New Suit Limits as Supreme Court Backs Bristol-Myers
Jun 19, 2017 | Bloomberg Politics
By Greg Stohr
The U.S. Supreme Court gave companies a new tool to defeat some legal claims, siding with Bristol-Myers Squibb Co. in a bid to limit a consumer lawsuit in California over its Plavix blood thinner.
The justices, voting 8-1, said the California Supreme Court was wrong to let almost 600 non-Californians join 86 state residents in claiming Bristol-Myers misrepresented the risk of heart attacks and strokes.
The case tested the constitutional power of state courts to adjudicate suits by non-residents when the alleged wrongdoing occurred elsewhere.
The majority said the out-of-state plaintiffs hadn’t shown enough of a connection between their alleged injuries and the company’s activities in 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.
Writing for the court, Justice Samuel Alito said the plaintiffs could sue Bristol-Myers together in other states, including New York, where the company has its headquarters, and Delaware, where it is incorporated.
The ruling "will not result in the parade of horribles that respondents conjure up," Alito wrote, referring to the plaintiffs.
In dissent, Justice Sonia Sotomayor said the ruling "may make it impossible to bring certain mass actions at all."
The case is Bristol-Myers Squibb v. Superior Court, 16-466.
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Bristol-Myers v. Sup. Ct.: Supreme Court Restricts Specific Jurisdiction and Limits Forum Shopping
Jun 20, 2017 | JD Supra
By Irina Dashevsky, Matthew Goodin, and Russell Perdew
In Bristol-Myers Squibb Co. v. Sup. Ct. of Calif., 2017 WL 2621322 (2017), the U.S. Supreme Court continued its push against forum shopping by holding that California state courts do not have specific personal jurisdiction over defendants for nonresident plaintiffs’ claims that arose outside of California. This is the Court’s third ruling on personal jurisdiction in three years, which began in 2014 by restricting general personal jurisdiction in the Daimlerdecision and continued in the Tyrrell opinion released earlier this term. Daimler AG v. Bauman, 134 S.Ct. 746 (2014); BNSF Railway Co. v. Tyrrell, 2017 WL 2322834 (2017). In all three opinions, Justice Sotomayor was the lone dissenting vote.
These decisions bring predictability to companies that operate nationwide by limiting the states where they can be sued. A company will generally only be subject to suit in states where: (1) the company is incorporated or headquartered; or, (2) the company engaged in conduct from which the claim arose. The Court did hold open the possibility that that claims under certain federal statutes with nationwide service-of-process provisions (e.g., RICO) could allow for broader personal jurisdiction. That issue will need to be resolved in the future.
Nonresident Plaintiffs sue in California state court even though their injuries occurred elsewhere.
A group of 86 California residents and 592 nonresidents sued Bristol-Myers Squibb Company (BMS) in California state court for injuries allegedly caused by the drug Plavix. BMS is a Delaware corporation headquartered in New York, and it developed and manufactured Plavix outside of California. Although BMS sold Plavix into California, the nonresidents did not purchase or use Plavix in California. Thus, BMS moved to dismiss the nonresidents’ claims for lack of personal jurisdiction, arguing that its California contacts had nothing to do with the nonresidents’ Plavix-related injuries.
California Supreme Court: specific personal jurisdiction exists under a “sliding-scale” approach.
The California Supreme Court held specific jurisdiction existed over BMS for the nonresidents’ claims. Bristol-Myers v. Sup. Ct., 377 P.3d 874 (2016). The court first concluded that no general jurisdiction existed because California (where BMS was neither incorporated nor headquartered) was not BMS’s “home state” under Daimler. Although BMS had a significant presence in California (five offices; 400+ employees), and sold substantial amounts of Plavix there (over $900 million), the court found that was insufficient under Daimler to support general jurisdiction because that presence and sales were a relatively small percentage of BMS’s nationwide operations. Id. at 883–84.
The California Supreme Court found specific jurisdiction based on a three-part test under which: (1) a defendant must have “purposefully directed” its activities at the forum state; (2) the claims arise from or relate to the forum-directed activities; and (3) jurisdiction is otherwise reasonable. Bristol-Myers, 377 P.3d at 885. BMS acknowledged that it purposefully directed activity towards California and did not dispute jurisdiction under the reasonableness prong. Instead, BMS argued the nonresidents’ claims did not relate to its California activities as Plavix was neither developed nor manufactured there, and the nonresidents did not purchase Plavix or see Plavix advertising in California. The California Supreme Court disagreed, adopting a “sliding-scale” approach to finding relatedness. Id. at 889 (“the more wide ranging the defendant’s forum contacts, the more readily is shown a connection between the forum contacts and the claim.”) Given BMS’s significant California contacts, the court held that those contacts were related to the nonresident’s claims even though BMS’s California activities “bear [no] substantive legal relevance to the nonresident plaintiffs’ claims ….” Id. at 888.
U.S. Supreme Court: No specific jurisdiction where there is no connection between forum-related contacts and claims.
The U.S. Supreme Court rejected the California Supreme Court’s sliding-scale approach, holding the connection required between BMS’s California contacts and plaintiffs’ claims was the same regardless of how significant BMS’s California contacts were. Bristol-Myers, 2017 WL 2621322, at *8. The Court found no such connection because the nonresidents’ claims did not arise from any of BMS’s California contacts. Id. (“What is needed—and what is missing here—is a connection between the forum and the specific claims at issue.”).
The Court also found the minimal burden on BMS (which was defending dozens of other Plavix claims in California) was irrelevant, noting that constitutional limits on personal jurisdiction are not just about inconvenience but reflect “territorial limitations” on states’ powers. Id. at *7. In short, BMS could not be sued in California for Plavix-related injuries by nonresidents simply because BMS could be sued there by residents. Id. at *8 (“The mere fact that other plaintiffs were prescribed, obtained, and ingested Plavix in California—and allegedly sustained the same injuries as did the nonresidents—does not allow the State to assert specific jurisdiction over the nonresidents’ claims.”).
Impact: Forum Shopping Has Been Significantly Restricted.
The combination of Bristol-Myers and Tyrrell from this term, and Daimlerfrom 2014, present significant obstacles to a plaintiff’s ability to sue in states where neither plaintiff nor defendant is located. Daimler, and later Tyrrell, limited general jurisdiction to states where defendants are incorporated or headquartered. The California Supreme Court’s sliding-scale approach could have diluted those decisions, but the U.S. Supreme Court in Bristol-Myersrejected that approach and reaffirmed that specific jurisdiction requires a specific connection between the defendant’s forum-related contacts and the plaintiff’s claimed injury. This will impact the law in California, as well as Texas and the Federal Circuit, which had adopted similarly broad approaches to specific jurisdiction. See TV Azteca v. Ruiz, 490 S.W.3d 29, 52-53 (Tex. 2016); Avocent Huntsville Corp. v. Aten Int’l Co., 552 F.3d 1324, 1336-35 (Fed. Cir. 2008).
Bristol-Myers did not answer every question about personal jurisdiction. The Court explicitly left open the question of whether a broader jurisdictional approach would be permitted in cases under federal statutes that contain nationwide service-of-process provisions, such as racketeering claims under RICO or antitrust claims under the Clayton Act. That question involves nuanced issues of how jurisdictional contacts are analyzed, as well as whether venue and service are proper, and must wait for another day to be resolved.
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Supreme Court Further Curbs Plaintiffs' Venue Shopping With Bristol-Myers Ruling
Jun 19, 2017 | FOX Business
By Jess Braven
WASHINGTON – The Supreme Court on Monday dealt a blow to consumer plaintiffs by limiting where lawsuits against companies with business in multiple states can be heard.
The ruling was one of a series this term limiting so-called forum shopping, where plaintiffs' attorneys file suit in a state or federal court they believe will be sympathetic to their claims.
An attorney for the plaintiffs couldn't immediately be reached.
"We are hopeful that this decision will provide litigants more certainty regarding where lawsuits can be heard," Bristol said in a statement. "At its core, this decision was about basic principles of federalism and fairness in our legal system."
The Plavix suit involved nearly 700 plaintiffs, including 86 Californians, alleging product liability and other claims under California state law. There was no dispute over the Californians' ability to sue in their own state courts, but Bristol, which is incorporated in Delaware and conducted its Plavix business from New York and New Jersey, argued the nonresidents were a different story.
The California Supreme Court allowed the suit to proceed in state court, observing the plaintiffs had similar claims, that the drug was marketed nationwide and that Bristol had sold more than 180 million Plavix pills in the state, generating more than $900 million in sales.
Justice Samuel Alito, writing for the high court, said that wasn't enough.
Companies have long complained that plaintiffs in certain cases seek out venues where they believe they are most likely to receive favorable rulings, even when the cases involved may have only a tenuous connection to the area.
Monday's ruling could provide a boost to companies by limiting the opportunities for such forum-shopping, as the tactic is known. It could limit plaintiffs' ability to stray far from a jurisdiction where the company does business or where the plaintiffs have a relatively direct interaction with the company or its product.
Consumers groups, however,have warned that cutting back too sharply on plaintiffs' ability to sue could give big companies more ways to avoid responsibility for harm they cause.
At issue was the definition of jurisdiction, which refers to a court's legal authority over a claim or party. Courts have "general jurisdiction" over certain parties, such as companies based in their state, which allows them to hear any claim. They also may have "specific jurisdiction" to hear particular claims, such as those arising over an incident within their state.
In 2014, the Supreme Court narrowed the scope of general jurisdiction against corporate defendants, but the California court found specific jurisdiction based on Bristol's unrelated operations in its state.
Justice Alito called that "a loose and spurious form of general jurisdiction" that fell outside the high court's precedent.
"The nonresidents were not prescribed Plavix in California, did not purchase Plavix in California, did not ingest Plavix in California, and were not injured by Plavix in California," he wrote. "The mere fact that other plaintiffs were prescribed, obtained, and ingested Plavix in California -- and allegedly sustained the same injuries as did the nonresidents -- does not allow the state to assert specific jurisdiction over the nonresidents' claims."
Only Justice Sonia Sotomayor dissented.
"There is nothing unfair about subjecting a massive corporation to suit in a state for a nationwide course of conduct that injures both forum residents and nonresidents alike," she wrote.
In May, the court ruled that Montana state courts couldn't hear employee-injury claims against the BNSF Railway unit of the Omaha, Neb.-based Berkshire Hathaway Inc., because the plaintiffs were neither residents of the state nor injured there, and the company itself, with headquarters in Fort Worth, Texas, was based out of state. The Montana Supreme Court had found jurisdiction because the railway runs through the state and employs thousands of people there.
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.
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Supreme Court Place Location Limits on Personal Injury Suits
Jun 20, 2017 | Legal Scoops
A new Supreme Court ruling has placed limits on where companies can be sued in personal injury lawsuits.
The highest court ruled in a case involving Texas-based BNSF Railway Co. that the company could not be sued in Montana for an injury that took place in a different state. The ruling may impact personal injury law by limiting where lawsuits can be filed.
In an 8-1 ruling, the justices determined that states cannot hear claims for injuries sustained out-of-state or outside of the state where the company is based.
The Supreme Court threw out a lower court’s decision, which allowed for claims to be filed against BNSF anywhere in the state’s network.
The two plaintiffs in the case sued the company for separate and unrelated injuries under the Federal Employers’ Liability Act, which allows railroad employees to sue employers for compensation if they are injured on the job.
One plaintiff’s injuries occurred in Washington state, while the other plaintiff’s injuries occurred in Minnesota, South Dakota and Iowa.
Robert Nelson alleges that a slip-and-fall accident injured his knee while working in Washington in 2011. Kelli Tyrrel alleges that her husband developed late-stage kidney cancer because of exposure to carcinogenic chemicals while working on the job in 2014. Mr. Tyrrel was allegedly exposed to chemicals while working in Minnesota, South Dakota and Iowa.
Both plaintiffs filed their suits in Montana, a state where the company conducts most of its business. But the Supreme Court ruled that doing business in the state was not grounds to sue for personal injuries that occurred in a different state.
BNSF has more than 2,000 employees in Montana and operates more than 2,000 miles of railway in the state.
Typically, plaintiffs can file suit against a company where they are incorporated, based or do a significant amount of business. The latest ruling may change this and is favorable for corporations who are opposed to plaintiffs “shopping around” for states with more favorable personal injury laws.
The only justice to dissent from the ruling says the decision is a “jurisdictional windfall and would force plaintiffs to sue corporations in “jurisdictions with which they have no contacts or connection.”
The biggest issue, some legal experts say, is that corporations often choose to incorporate in certain states because they have laws that limit financial exposure when sued. Plaintiffs may now be forced to file suit in states that are inhospitable to claimants.
The Supreme Court agreed to hear the case in January. BNSF argued that courts in Montana had no jurisdiction over the cases, in which the Supreme Court agreed in its latest ruling.
When first petitioning the court, the company argued that the Montana court was violating the high court’s precedent that limits jurisdiction.
Because BNSF is not incorporated in Montana and does not maintain a principal place of business there, the company is not subject to general personal jurisdiction in the state, the court said. The reasoning, according to the court, was because the plaintiffs had “no relationship to anything that occurred or had its principal impact in Montana.”
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U.S. Supreme Court again limits where companies can be sued
Jun 20, 2017 | Reuters
By Andrew Chung
The Supreme Court on Monday slapped limits on where injury lawsuits may be filed for the second time in three weeks, again siding with businesses that want to prevent plaintiffs from "shopping" for friendly courts for their cases.
In an 8-1 ruling, the justices overturned a lower court's decision that had allowed hundreds of out-of-state patients who took Bristol-Myers Squibb Co's (BMY.N) blood-thinning medication Plavix to sue the company in California.
State courts cannot hear claims against companies that are not based in the state when the alleged injuries did not occur there, the justices ruled.
The ruling had an immediate impact, with a state court in St. Louis citing it in declaring a mistrial in a lawsuit filed by out-of-state plaintiffs against New Jersey-based Johnson & Johnson (JNJ.N) over its talc-related products, plaintiffs lawyer Ted Meadows said on Monday.
Previous talc cases in the same court have produced jury awards of over $300 million against J&J. Meadows said he was disappointed, but thought there were still ways to establish jurisdiction in St. Louis.
The Supreme Court on May 30 reached a similar conclusion in a separate case involving out-of-state injury claims against Texas-based BNSF Railway Co [BNISF.UL].
Companies typically can be sued in a state where they are headquartered or incorporated, as well as where they have important ties. Businesses want to limit the ability of plaintiffs to shop for courts in states with laws conducive to such injury lawsuits.
Plaintiffs contend that corporations are seeking to squeeze their access to compensation for injuries by denying them their day in state courts.
The underlying lawsuits filed in 2012 against Bristol-Myers and California-based drug distributor McKesson Corp (MCK.N) involved 86 California residents and 575 non-Californians, alleging Plavix increased their risk of stroke, heart attack and internal bleeding.
Bristol-Myers argued it should not face claims in California by plaintiffs who do not live in the state. The company is incorporated in Delaware and headquartered in New York.ALSO IN BUSINESS NEWSWall St. falls as oil tumbles, tech rebound peters outBoeing gets boost from United and lifts demand forecast
The California Supreme Court ruled in August 2016 that it could preside over the case because Bristol-Myers conducted a national marketing campaign and sold nearly $1 billion of the drug in the state.
Writing for the U.S. Supreme Court majority on Monday, Justice Samuel Alito said the California court was wrong to rule that it could hear the case "without identifying any adequate link between the state and the nonresidents' claim."
In a dissenting opinion, Justice Sonia Sotomayor predicted that the Supreme Court's ruling will make it harder to consolidate lawsuits against corporations in state courts and lead to unfairness for individual injury plaintiffs.
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Jun 19, 2017 | Lexology
By Mayer Brown LLP
We’ve previously blogged about Bristol-Myers Squibb v. Superior Court (“BMS”), in which the Supreme Court granted certiorari to review a decision of the California Supreme Court that adopted an unusual—and extraordinarily expansive—view of California courts’ power to exercise specific personal jurisdiction over a defendant.
We filed an amicus brief on behalf of the Chamber of Commerce of the United States of America, the California Chamber of Commerce, the American Tort Reform Association, and the Civil Justice Association of California, arguing that the California court’s holding conflicted with numerous Supreme Court decisions making clear that in order to invoke specific jurisdiction, a plaintiff’s claims must arise out of the defendant’s in-state conduct. (The views in this post are ours, and not those of our clients.)
The case was argued in April, and the Court announced its decision today. The result is an 8-1 opinionrejecting the California Supreme Court’s approach and, in our view, recognizing important limits imposed by the Fourteenth Amendment’s due process clause on the ability of courts to adjudicate cases that aggregate the claims of plaintiffs from many jurisdictions.
The immediate impact of the decision is to limit the forums where nationwide mass actions in state court can proceed to those states in which the defendant is subject to general jurisdiction (usually the state of incorporation and principal place of business). In addition, as we discuss below, the decision raises substantial questions about whether nationwide class actions can proceed in jurisdictions where a defendant is not subject to general jurisdiction.
Background
The question presented in BMS involves specific jurisdiction, which is one of two forms of personal jurisdiction—the doctrine that permits a court to exercise its power over the “person” of a defendant. Specific jurisdiction empowers a court to adjudicate particular claims relating to a defendant’s conduct within or relating to the forum; in order to be subject to specific jurisdiction, the defendant must have established contacts with the forum, and the lawsuit must arise out of those contacts.
As the Supreme Court put it in Walden v. Fiore, its most recent decision on the scope of specific jurisdiction: “[f]or a State to exercise jurisdiction consistent with due process, the defendant’s suit-related conduct must create a substantial connection with the forum State.” That is why the BMS Court termed specific jurisdiction “case-linked”—in contrast to “all-purpose” general jurisdiction, which allows a court to “hear any claim against that defendant, even if all the incidents underlying the claim occurred in a different State.”
In BMS, 592 plaintiffs who reside outside California joined together with 86 California resident plaintiffs to sue BMS in California, asserting various product-defect claims based on their use of BMS’s blood-thinning drug Plavix.
BMS moved to dismiss the out-of-State plaintiffs’ claims for lack of personal jurisdiction, arguing that California lacked specific jurisdiction over these plaintiffs’ claims because none of the events relevant to their claim occurred in California: they did not take the drug in California, it was not marketed to them in California, and it was not designed or manufactured in California. But the California Supreme Court heldthat California courts could exercise specific jurisdiction over these claims. It took the position that specific jurisdiction does not require that a plaintiff’s claims “arise directly from the defendant’s forum contacts” or be causally linked to those contacts in any way. Instead, the court held, it was sufficient that the in-state and out-of-state plaintiffs’ claims were “based on the same allegedly defective product and the assertedly misleading marketing and promotion of that product” as part of a “common nationwide course of distribution.”
The Court’s Decision
The Supreme Court reversed the California Supreme Court by a vote of 8-1. Writing for the majority, Justice Alito emphasized that “specific jurisdiction is confined to adjudication of issues deriving from, or connected with, the very controversy that establishes jurisdiction.” If a state has no “legitimate interest” in particular claims, a defendant should not be forced to “submit[] to the coercive power” of the state with respect to those claims.
Justice Alito explained that specific jurisdiction therefore requires “a connection between the forum and the specific claims at issue.” “When there is no such connection,” he stated, “specific jurisdiction is lacking regardless of the extent of a defendant’s unconnected activities in the State.”
Applying that requirement, the majority held that California could not exercise specific jurisdiction over BMS with respect to the nonresidents’ claims. The nonresidents did not “claim to have suffered harm in” California, and “all the conduct giving rise to [their] claims occurred elsewhere.” Moreover, because specific jurisdiction cannot be based on activities “unconnected” with the claims at issue, “[t]he mere fact that other plaintiffs were prescribed, obtained, and ingested Plavix in California— and allegedly sustained the same injuries as did the nonresidents,” or that “BMS conducted research in California on matters unrelated to Plavix,” was irrelevant to specific jurisdiction.
Implications for Mass and Class Actions
The BMS decision reaffirms long-settled limits on personal jurisdiction. It makes clear that lower courts may not loosen the rules governing “case-linked” specific jurisdiction in the wake of the Court’s decision in Daimler (reaffirmed last month in BNSF Railway Co. v. Tyrrell) emphasizing the strict limits on “all-purpose” general jurisdiction.
One issue left open by the decision is how much of a connection between a plaintiff’s claims and the forum state is required to permit the assertion of specific jurisdiction. The Court did not have to decide that issue because there was no connection at all between California and the claims of the non-California plaintiffs. But the question of what connection is required will certainly arise in the future.
We proposed one answer in a separate amicus brief for the Chamber supporting the cert petition in GlaxoSmithKline, LLC v. M.M. ex rel. Meyers, another case challenging a lower court’s broad assertion of specific jurisdiction. We explain that a court should:Identify the defendant’s purposeful claim-related activity within the forum;Determine whether that activity gave rise to the plaintiff’s claim; andAssess whether the causal connection between the activity and the claim is sufficient to create the “substantial connection” that due process requires.
As part of the last inquiry, the court should consider both (a) whether the in-forum activity is sufficient to support the conclusion that the obligation underlying the suit was incurred there, and (b) whether permitting an assertion of specific jurisdiction based on that activity will intrude on the sovereignty of other States, because one or more States have a significantly greater connection to the underlying obligation than the forum State. The latter consideration is particularly appropriate in light of the BMSCourt’s focus on the forum state’s “legitimate interest in the claims in question”—“[a]s we have put it,” the Court said, “restrictions on personal jurisdiction ‘are more than a guarantee of immunity from inconvenient or distant litigation. They are a consequence of territorial limitations on the power of the respective States.’”Another issue likely to gain substantial attention is how personal jurisdiction applies in the class action context.(Justice Sotomayor flagged the issue in footnote 4 of her dissent.) Some courts have held that as long as the forum State may exercise specific jurisdiction over the named plaintiffs’ claims, it automatically may also adjudicate the claims of the absent class members—even if it would not be able to exercise specific jurisdiction if the absent class members’ claims were asserted in a separate case. That reasoning is significantly undermined by today’s decision, which squarely held that “[t]he mere fact that other plaintiffs” could invoke case-specific jurisdiction in California—because they obtained and ingested the drug in California—“does not allow the State to assert specific jurisdiction over the nonresidents’ claims.”
The Supreme Court has repeatedly explained—both under the Rules Enabling Act (which is the basis for Federal Rule of Civil Procedure 23’s authorization of class actions) and (by extension) as a matter of due process—that the class action device cannot alter the substantive legal standards applicable to a claim, and in particular cannot deprive a defendant of defenses that would be available against absent class members. That principle, combined with the reasoning of today’s decision, provides class action defendants with powerful arguments to challenge class actions filed in states that cannot exercise personal jurisdiction with respect to absent class members’ claims. After all, if the nonresidents’ claims in BMS could not proceed on the theory that aggregation with the California residents’ claims through joinder established personal jurisdiction, it is hard to see how the combination of such claims in a class action (another form of joinder) could be treated differently.
A final issue left open by BMS is whether the Fifth Amendment’s due process requirement might apply differently to exercises of jurisdiction by federal courts. But this issue does not arise frequently. For the Fifth Amendment to apply, Congress must provide for expansive personal jurisdiction by authorizing nationwide service of process in a particular statute—and Congress rarely does this, as the Court explained in the BNSF decision last month in rejecting the argument that the federal statute there (the Federal Employers’ Liability Act) expanded federal courts’ power to exercise personal jurisdiction.
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High Court Sides With Drugmaker on Plavix Claims
Jun 19, 2017 | Courthouse News Service
By Dan Mccue
WASHINGTON (AP) — The Supreme Court on Monday held that hundreds of out-of-state residents can’t sue Bristol-Myers Squibb Co. in California state court over harmful reactions they had to the blood thinner Plavix.
In an 8-1 ruling, the justices said there wasn’t a strong enough connection between the claims against the pharmaceutical company and its ties to the state for the cases to move forward.
At issue were the claims of 592 residents of 33 states who joined 86 California residents in suing the New Jersey-based company.
A divided California Supreme Court had ruled that California courts have specific jurisdiction to entertain the nonresidents’ claims.
Bristol-Myers Squibb is headquartered in New York City and has substantial operations in New Jersey, where it has established major research and development campuses.
But the drugmaker does have five offices in California, and employs 164 researchers and 250 sales reps there.
California distributors and wholesalers meanwhile bought 187 million Plavix pills from 2006 to 2012, generating almost $918 million in revenue, according to the mass tort action.
After the California Supreme Court ruled in the plaintiffs’ favor, Bristol-Myers Squibb petitionedfor a writ of certiorari.”
Writing for the majority on Monday, Justice Samuel Alito Jr. said “[i]n order for a court to exercise specific jurisdiction over a claim, there must be an ‘affiliation between the forum and the underlying controversy, principally, [an] activity or an occurrence that takes place in the forum State’ … When there is no such connection, specific jurisdiction is lacking regardless of the extent of a defendant’s unconnected activities in the State.”
“For this reason, the California Supreme Court’s ‘sliding scale approach’ is difficult to square with our precedents,” Alito continued. “Under the California approach, the strength of the requisite connection between the forum and the specific claims at issue is relaxed if the defendant has extensive forum contacts that are unrelated to those claims. Our cases provide no support for this approach, which resembles a loose and spurious form of general jurisdiction.”
According to Alito, the California Supreme Court “found that specific jurisdiction was present without identifying any adequate link between the State and the nonresidents’ claims.
“As noted, the nonresidents were not prescribed Plavix in California, did not purchase Plavix in California, did not ingest Plavix in California, and were not injured by Plavix in California. The mere fact that other plaintiffs were prescribed, obtained, and ingested Plavix in California — and allegedly sustained the same injuries as did the nonresidents — does not allow the State to assert specific jurisdiction over the nonresidents’ claims.”
But in a dissent, Justice Sonya Sotomayor said she fears the consequences of her colleague’s decision.
“The majority’s rule will make it difficult to aggregate the claims of plaintiffs across the country whose claims may be worth little alone,” she said. “It will make it impossible to bring a nationwide mass action in state court against defendants who are ‘at home’ in different States. And it will result in piecemeal litigation and the bifurcation of claims.
“None of this is necessary,” Sotomayor wrote.
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The U.S. Supreme Court Has Been Incredibly Pro-Business This Term
Jun 19, 2017 | Fortune
The U.S. Supreme Court has sided with business interests in a series of cases in its current term, which began in October and is due to end next week.
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. Here is a look at some of those rulings.Bank of America v. Miami, and Wells Fargo v. Miami
A major dispute on whether banks can be sued by cities over the decline in tax revenue caused by alleged predatory lending and resulting foreclosures. The court, on a 8-0 vote, issued a mixed ruling on May 1, saying Miami could sue Bank of America (BAC, -1.42%) and Wells Fargo & Co (WFC, -1.27%) but making it clear that the bar is high for cities to prevail.Microsoft v. Baker
The court ruled 8-0 on June 12 in favor of Microsoft (MSFT, -1.17%) in its effort to fend off a class-action lawsuit brought by Xbox 360 owners who said the popular videogame console gouges discs because of a design defect.Bristol-Myers Squibb v. Superior Court
The court on June 19 sided with corporate objections to plaintiffs "shopping" for friendly courts and slapped limits on where injury lawsuits may be filed, backing Bristol-Myers Squibb (BMY, +0.88%) 8-1 in a case involving suits over its blood-thinning medication Plavix.BNSF v. Tyrrell
In a similar case to the Bristol-Myers dispute, the court on May 30 handed a win to BNSF Railway, a subsidiary of Berkshire Hathaway (BRK.A, -0.35%), on a 8-1 vote. BNSF was seeking to prevent plaintiffs from filing suit in courts perceived to be more friendly to their claims.Midland Funding v. Johnson
The court sided with debt collectors over consumers, finding that people who have filed for bankruptcy cannot sue companies that try to recoup old debt that is not required to be paid back under state statutes of limitations. The 5-3 ruling on May 15 was a win for Midland Funding, a subsidiary of Encore Capital Group (ECPG, +0.26%).Henson v. Santander
The justices declined to widen the reach of a federal law targeting abusive debt-collection tactics such as harassment and threats, ruling on June 12 it does not cover companies that buy debt, sometimes for pennies on the dollar, and then collect it. The 9-0 ruling was a victory for Santander Consumer USA Holdings (SC, -0.30%).
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U.S. Supreme Court ruling threatens massive talc litigation against J&J
Jun 20, 2017 | Reuters
By Nate Raymond
Johnson & Johnson is seizing upon a U.S. Supreme Court ruling from Monday limiting where injury lawsuits can be filed to fight off claims it failed to warn women that talcum powder could cause ovarian cancer.
New Jersey-based J&J has been battling a series of lawsuits over its talc-based products, including Johnson's Baby Powder, brought by around 5,950 women and their families. The company denies any link between talc and cancer.
A fifth of the plaintiffs have cases pending in state court in St. Louis, where juries in four trials have hit J&J and a talc supplier with $307 million in verdicts. Those four cases and most of the others on the St. Louis docket involve out-of-state plaintiffs suing an out-of-state company.
On Monday, the Supreme Court ruled 8-1 in a case involving Bristol-Myers Squibb Co that state courts cannot hear claims against companies that are not based in the state when the alleged injuries did not occur there.
The ruling immediately led a St. Louis judge at J&J's urging to declare a mistrial in the latest talc case, in which two of the three women at issue were from out of state. It also could imperil prior verdicts and cases that have yet to go to trial.
"We believe the recent U.S. Supreme Court ruling on the Bristol-Myers Squibb matter requires reversal of the talc cases that are currently under appeal in St. Louis," J&J said in a statement.
The question of where such lawsuits can be filed has been the subject of fierce debate.
The business community has argued plaintiffs should not be allowed to shop around for the most favorable court to bring lawsuits, while injured parties claim corporations are trying to deny them access to justice.
Along with talc cases, large-scale litigation alleging injuries from Bayer AG's Essure birth control device in Missouri and California and GlaxoSmithKline's antidepressant Paxil in California and Illinois are examples of other cases where defendants could utilize the Supreme Court decision.
Although he declared a mistrial on Monday, St. Louis Circuit Judge Rex Burlison left the door open for the plaintiffs to argue they still have jurisdiction.
Plaintiffs lawyer Ted Meadows said he would argue the St. Louis court still had jurisdiction based on a Missouri-based bottler J&J used to package its talc products, which he said would create a sufficient connection to the state.
"It's very disappointing to mistry a case because the Supreme Court changed the rules on us," said Meadows.
The lawsuit decided by the high court on Monday involved claims against Bristol-Myers and California-based drug distributor McKesson Corp by 86 California residents and 575 non-Californians over the blood thinner Plavix.
Beyond Monday's mistrial, the Supreme Court's ruling could bolster a pending appeal by J&J of a $72 million verdict in favor of the family of Alabama resident Jacqueline Fox, who died in 2015. A Missouri appeals court had said in May it would wait until the Supreme Court issued its decision to decide the appeal.
J&J has won only one of the five trials so far in Missouri. It previously sought to move talc cases out of St. Louis, but the Missouri Supreme Court in January denied its bid.
The company has also cast the St. Louis court as overly plaintiff-friendly and has allowed evidence linking talc to cancer that was rejected by a New Jersey state court judge overseeing over 200 talc cases. The plaintiffs are appealing.
The talc verdicts against J&J led the business-friendly American Tort Reform Association last year to declare the St. Louis state court the nation's top "Judicial Hellhole."
Now J&J could try to use the Supreme Court ruling to dismiss many of the cases it faces in Missouri, according to legal experts.
Corporations facing a large volume of cases in venues chosen by plaintiffs will likely cite the Supreme Court to try to dismiss those claims, said Rusty Perdew, a defense lawyer at the law firm Locke Lord.
"You have a bunch of defendants who can go back and say, 'Judge, you got that wrong and you're going to have to dismiss claims by all those plaintiffs,'" he said.
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