Personal Jurisdiction

Personal Jurisdiction in Mass Torts

At its core, every personal jurisdiction case answers a central question about the scope of due process­: under what circumstances may a court exercise its power over a party. Broadly speaking, personal jurisdiction is divided into general jurisdiction and specific jurisdiction. When a defendant’s activities are so continuous and systematic that the defending is “essentially at home” in the forum state, the state’s courts have general jurisdiction over the defendant—the defendant is subject to any suit, whether related to its activities in the forum state or not. On the other hand, when a defendant’s connection to the forum state is more tenuous, a court only has jurisdiction over suits related to the defendant’s activities in the state give rise to the suit—specific jurisdiction.

General Jurisdiction

One of the traditional means at common law of obtaining personal jurisdiction over a party was serving them with process while they were physically present within the state.[1] But what does it mean for a corporate entity to be “physically present” anywhere? Possibly, one could serve a corporate representative at some sufficiently high level of authority, but most courts have rejected this view of personal jurisdiction.[2]

Another traditional basis of personal jurisdiction is domicile,[3] which for an individual is determined by their presence in a state combined with their intent to remain there indefinitely. Here again, the reality of noncorporeal corporations raises the question of how to translate traditional bases of jurisdiction to corporations. The U.S. Supreme Court has answered this question by analogy.

International Shoe Co. v. Washington noted that where a defendant engages in systematic and continuous activities within a state, and the suit relates to those activities, then personal jurisdiction would be proper even if the defendant were a non-resident company.[4] But this formulation combines what has become two separate bases for jurisdiction: general jurisdiction based on continuous and systematic activities within a state, and specific jurisdiction based on a connection between a defendant’s activities within a state and the alleged cause of action.

After first declaring domicile as “the paradigm forum for the exercise of personal jurisdiction,” the Court then announced that “it is an equivalent place, one in which the corporation is fairly regarded as at home.”[5] Yet this formulation merely kicked the can down the road, as it did nothing to answer the question of where the corporation is fairly regarded as at home. Suggestions that regular purchases in a forum state, regular training in a forum state, or regular payments by check drawn on a forum-state bank were sufficiently “continuous and systematic” to justify general jurisdiction had been rebuffed by the U.S. Supreme Court.[6] In Goodyear, the U.S. Supreme Court contrasted these activities with those found in Perkins v. Benguet Consolidated Mining Co.,[7] a 1952 case in which general jurisdiction in Ohio over a Philippine company was upheld because “[t]he corporation’s president maintained his office there, kept the company files in that office, and supervised from the Ohio office ‘the necessarily limited wartime activities of the company.’”[8] Three years later, the Court in Daimler AG v. Bauman observed that “Goodyear did not hold that a corporation may be subject to general jurisdiction only in a forum where it is incorporated or has its principal place of business; it simply typed those places paradigm all-purpose forums.”[9] Nevertheless, the Bauman Court explained that the proper inquiry for general jurisdiction is not simply whether a defendant’s contacts are “continuous and systematic;” instead, a defendant’s “continuous and systematic” contacts are a means of dividing where that defendant is “essentially at home.”[10] This suggests that a company can only have one principal place of business.

Ultimately, general jurisdiction over a foreign corporation is proper “when their affiliations with the State are so ‘continuous and systematic’ as to render them essentially at home in the forum State.”[11]

Specific Jurisdiction

The broad strokes of the modern test for specific jurisdiction was announced in International Shoe Co. v. Washington: due process requires that the defendant have “certain minimum contacts with [the forum state] such that the maintenance of the suit does not offend ‘traditional notions of fair play and substantial justice.’”[12] Of course, “minimum contacts,” “traditional notions,” “fair play,” and “substantial justice” did little to guide courts and parties in determining the scope of specific jurisdiction, giving truth to Justice Black’s disapproving concurrence in International Shoe that the minimum contacts test “announced vague Constitutional criteria” that “introduced uncertain elements” and would “curtail the exercise of State powers to an extent not justified by the Constitution.”[13]

Another issue that arises in mass torts is that of jurisdiction over foreign defendant-manufacturers who do not directly do business in the United States. Where such a defendant’s products are sold in the United States though an independent distributor, the mere fact of that relationship does not subject the defendant to jurisdiction in the specific states where the products are distributed, even if the defendant directs its sales and marketing efforts at the United States generally.[14] But a generalized sales and marketing strategy plus “something more,” such as a state-specific design or marketing, could justify jurisdiction over the foreign defendant.[15] Thus, foreseeability alone is insufficient for specific jurisdiction—purposeful availment is required [foreseeability and purposeful availment as concepts must both be explained].

When a foreign manufacturer-defendant does business in the United States through a subsidiary, the analysis gains yet another layer, since the acts of a defendant’s agent may or may not be imputed to those of the principal-defendant.[16] In re Chinese-Manufactured Drywall Products Liability Litigation, for example, upheld jurisdiction over a Chinese manufacturer whose subsidiary did business in the United States, even though the subsidiary was not an alter ego of the parent company, where the application of state agency law rendered the subsidiary an agent of the parent.[17] Yet other courts have required a strong prima facie case of alter-ego in order to disregard the presumption against jurisdiction over parent companies for subsidiaries’ actions.[18] In drafting a complaint, the best practice is to go beyond conclusory allegations of principal-agent connections and specifically plead particular facts that would establish agency under the controlling law. Similarly, be prepared to request jurisdictional discovery early in the litigation to meet the inevitable jurisdictional challenges.

Bristol-Myers Squibb

Specific jurisdiction is limited jurisdiction, with the result that a court could have jurisdiction over some claims by some plaintiffs, but not other claims by that plaintiff or the same claims over which a court might have jurisdiction when brought by one plaintiff but not another.

The most significant mass torts jurisdiction decision in the last few decades (and perhaps ever) was the U.S. Supreme Court’s decision in Bristol-Myers Squibb v. Superior Court of California.[19] A group of non-California-resident plaintiffs had sued Bristol-Myers Squibb (‘BMS”) in California, alleging a variety of injuries were caused by the blood thinner Plavix. The challenged cases involved 86 California residents and 592 non-California residents.[20] The Court emphasized that BMS had not developed, manufactured, labeled, packaged, or worked on regulatory approval of Plavix, nor had it “create[d] a marketing strategy for Plavix in California.”[21] Similarly, the non-California plaintiffs had not obtained Plavix from a California physician and were neither treated nor injured by Plavix while in California.[22] In reaching its decision, the Court made clear that “[t] he 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.”[23] Ultimately, the Supreme Court held California courts did not have jurisdiction over the non-residents’ claims, even where those claims were identical to claims in the same suit over which they did have jurisdiction.

Hammons v. Ethicon, Inc.

Hammons v. Ethicon, Inc., decided by the Pennsylvania Supreme Court, considered the effect that BMS had on the jurisdictional landscape.[24] The product at issue in Hammons was the Prolift pelvic mesh kit, the actual mesh for which was manufactured by a third-party contractor in Pennsylvania to the specifications provided by Ethicon, a New Jersey corporation. An interesting element to this case is that the third-party manufacturer had been dismissed as immune under Biomaterials Access Assurance Act of 1998,[25] which protects biomaterial suppliers from liability “for harm to a claimant caused by an implant.”[26] In order to grant immunity, however, the trial court necessarily found that the third-party manufacturer was neither a manufacturer nor a seller of the implant, did not provide any component parts for the implant that failed to meet contractual specifications, and was not related to Ethicon by common ownership or control.[27]

The Hammons court took the BMS majority’s proclamation that it was engaged in a “straightforward application . . . of settled principles of personal jurisdiction” [28] at face value and concluded that BMS had not narrowed the scope of specific jurisdiction.[29] Vitally, the Hammons court distinguished between the concepts of “underlying controversy,” “suit,” and “litigation”—rather than individual “claims”—using the former as the proper focal point for considering a defendant’s connection to the forum state in determining specific jurisdiction.[30] The Hammons court therefore found specific jurisdiction because Ethicon was “substantially and directly involved in the production of the mesh in Pennsylvania.”[31] As the Hammons court explained, in contrast to the relationship between Bristol-Myers Squibb and its distributor in BMS, “Ethicon was involved in the production of the mesh by Secant in Pennsylvania, and Ms. Hammons claimed her injuries resulted from that mesh. Thus, there is a direct connection between Ms. Hammons’ cause of action and Ethicon’s actions in Pennsylvania.”[32]

Ford Cases

The Court clarified that while a causal relationship is not required, “[t]hat does not mean anything goes. . . . The phrase ‘relate to’ incorporates real limits, as it must to adequately protect defendants foreign to a forum.”[33] Yet as with the minimum contacts test enunciated in International Shoe, the “real limits” were not defined in any greater detail, as concurring opinions by Justices Alito and Gorsuch pointed out.[34] The concurrences’ concerns have been borne out by subsequent cases, as the discussion below shows.

In re Zantac

In this case, the court ultimately concluded that sales and marketing activities “not related to labeling decisions are unnecessary to state and support such a claim because the purpose of innovator-liability is to hold a brand-name manufacturer liable for injuries caused by products manufactured and sold by the generic manufacturers without any regard to the Defendants’ forum contacts.”[35] But this was the wrong inquiry for personal jurisdiction, and indeed, one wonders why the inquiry would be whether such allegations were necessary, rather than whether they were sufficient.

The Zantac court’s error lies in conflating the standards for personal jurisdiction and staging a claim upon which relief can be granted—in conflating Fed. R. Civ. P. 12(b)(2) and 12(b)(6). The court practically admits as much in writing that “in order to find . . . specific personal jurisdiction, the Court would have to read into [controlling innovator-liability cases’ an expanded duty on the part of a brand-name manufacturer, beyond its duty to update the warning label, to include any and all product representations.”[36]

While sales and marketing activities may be insufficient to state a claim for innovator liability under California or Massachusetts law, such activities would certainly demonstrate purposeful availment, as both the Zantac court and the U.S. Supreme Court in Ford held.[37] The only issue the court need to decide to resolve the question of jurisdiction was whether the defendant’s alleged conduct—misrepresentations in sales and marketing activities—related to the claimed violations of California and Massachusetts innovator-liability law. Since those claimed violations were the defendant’s misrepresentations in sales and marketing activities, those actions were patently “jurisdictionally relevant,” and the court should have found personal jurisdiction.[38]

1.1.1.5           Pendent Personal Jurisdiction

In the past, courts have exercised so-called “pendent personal jurisdiction,” where jurisdiction over one claim granted a court discretionary jurisdiction over other claims that were part of the same case or controversy.[39] By analogy to supplemental subject-matter jurisdiction,[40] courts reasoned that “[o]nce the defendant is before the court, it matters little, from the point of view of procedural due process, that he has become subject to the court’s ultimate judgment as a result of territorial or extra-territorial process.”[41] This line of thought has intuitive merit, particularly in consideration of the fundamental underpinnings of personal jurisdiction doctrine.[42] In essence, this is what the Ford cases do. But on the other hand, cases like Bristol-Myers Squibb cut against the notion of pendent personal jurisdiction.

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[1]           See, e.g., Burnham v. Super. Ct. of California, 495 U.S. 604, 610–11 (1990) (“That view had antecedents in English common-law practice, which sometimes allowed ‘transitory’ actions, arising out of events outside the country, to be maintained against seemingly nonresident defendants who were present in England.”) (citation omitted).

[2]           See, e.g., Martinez v. Aero Caribbean, 764 F.3d 1062, 1067–69 (9th Cir. 2014); Wenche Siemer v. Learjet Acquisition Corp., 966 F.2d 179, 182 (5th Cir. 1992); C.S.B. Commodities, Inc. v. Urban Trend (HK) Ltd., 626 F. Supp. 2d 837, 850 (N.D. Ill. 2009).

[3]           See Milliken v. Meyer, 311 U.S. 457, 462 (1940).

[4]           Int’l Shoe Co. v. Washington, 326 U.S. 310, 320 (1945).

[5]           Goodyear Dunlop Tires Operations, S.A. v. Brown, 564 U.S. 915, 924 (2011).

[6]           See Helicopteros Nacionales de Colombia, S.A. v. Hall, 466 U.S. 408, 416–18 (1984).

[7]           342 U.S. 437 (1952).

[8]           Goodyear Dunlop Tires Operations, S.A. v. Brown, 564 U.S. 915, 928 (2011) (quoting Perkins v. Benguet Consol. Mining Co., 342 U.S. 437, 447–48 (1952)).

[9]         571 U.S. 117, 137 (2014).

[10]         571 U.S. at 138–39.

[11]         Goodyear Dunlop Tires Operations, S.A. v. Brown, 564 U.S. 915, 919 (2011) (quoting International Shoe).

[12]         326 U.S. 310, 316 (1945) (quoting Milliken v. Meyer, 311 U.S. 457, 463 (1940)).

[13]         Id. at 323 (Black, J., concurring). Justice Black’s concern that these vague phrases would overly limit states’ ability to exercise jurisdiction over foreign defendants, thus undermining the Tenth Amendment. See Richard D. Freer, Civil Procedure at 75 (3d ed. 2012). Freer contends this concern has not come to pass—I leave it to the reader to examine their own experience in evaluating that conclusion.

[14]         See J. McIntyre Mach., Ltd. v. Nicastro, 564 U.S. 873, 886 (2011) (plurality opinion).

[15]         See id. at 888–89 (Breyer, J., concurring); see also Asahi Metal Indus. Co. v. Superior Ct. of California, Solano Cty., 480 U.S. 102, 111 (1987) (opinion of O’Connor, J.).

[16]         See Daimler AG v. Bauman, 571 U.S. 117, 135 n.13 (2014) 571 US 117, 135 (“Agency relationships . . . may be relevant to the existence of specific jurisdiction . . . a corporation can purposefully avail itself of a forum by directing its agents or distributors to take action there.” (emphasis in original) (internal citations omitted)).

[17]         753 F.3d 521, 531–32 (5th Cir. 2014).

[18]         See, e.g., Ranza v. Nike, Inc., 793 F3d 1059, 1075 (9th Cir. 2015); Jackson v. Tanfoglio Giuseppe, S.R.L., 615 F3d 579, 588 (5th Cir. 2010); Platten v. HG Bermuda Exempted Ltd., 437 F3d 118, 139 (1st Cir. 2006).

[19]         137 S. Ct. 1773 (2017).

[20]         Id. at 1778.

[21]         Id. at 1778.

[22]         Id. at 1778.

[23]         Id. at 1781 (emphasis original).

[24]         240 A.3d 537 (Pa. 2020).

[25]         21 U.S.C. § 1601 et seq.

[26]         21 U.S.C. § 1604(a).

[27]         21 U.S.C. § 1604; Hammons, 240 A.3d at 543–44.

[28]         BMS, 137 S. Ct. at 1783.

[29]         Hammons, 240 A.3d at 558–59.

[30]         Id. at 559.

[31]         Id. at 562.

[32]         Id. (footnote omitted).

[33]         Ford, 141 S. Ct. at 1026.

[34]         Id. at 1033–34 (Alito, J., concurring) (“[W]ithout any indication what those limits might be, I doubt that the lower courts will find that [“real limits”] observation terribly helpful.”); id. at 1035 (Gorsuch, J., concurring) (“The majority promises that its new test ‘does not mean anything goes,’ but that hardly tells us what does.”).

[35]         Zantac, 546 F. Supp. 3d at 1213.

[36]         Id.

[37]         Id. at 1211; Ford, 141 S. Ct. at 1028.

[38]         See Zantac, 546 F. Supp. 3d at 1203 (quoting Walden v. Fiore, 571 U.S. 277, 289 (2014)).

[39]         See, e.g., Action Embroidery Corp. v. Atlantic Embroidery, Inc., 368 F.3d 1174, 1181 (9th Cir. 2004); Robinson Engineering Co. Ltd. Pension Plan & Trust v. George, 223 F.3d 445, 449–50 (7th Cir. 2000).

[40]         See 28 U.S.C. § 1367(a).

[41]         Robinson v. Penn Central Co., 484 F.2d 553, 555 (3rd Cir. 1973).

[42]         Mercifully omitted from this discussion.