In Bristol-Myers Squibb v. Superior Court and BNSF Railway Co. v. Tyrrell, the Supreme Court reiterated and clarified its tests for specific and general personal jurisdiction.  In Bristol-Myers Squibb, the Court held that there must be a connection between the defendant’s contacts with the forum state and the plaintiff’s cause of action and that personal jurisdiction is—at the very least—a plaintiff-by-plaintiff analysis.  In BNSF, the Supreme Court reiterated that a corporation is subject to general or all-purpose jurisdiction only where it is at home, and that—absent exceptional circumstances—a corporation is only at home where it is incorporated and headquartered.  Just as importantly, BNSF emphasized that the at-home test applied to all assertions of general jurisdiction over a company—its announcement of the at-home test in Daimler AG v. Bauman was not limited to its specific facts.

Although Bristol-Myers Squibb and BNSF will likely put an end to the worst forum-shopping abuses by plaintiffs, they leave many questions unanswered.  Just how much of a connection between the forum and the claims is necessary for specific jurisdiction?  What will a plaintiff-by-plaintiff approach to specific jurisdiction mean for nationwide class actions and aggregated actions?  And can a company be subject to general jurisdiction anywhere other than where it is headquartered and incorporated?

Sean Marotta will discuss these and other questions, surveying the personal-jurisdiction landscape after Bristol-Myers Squibb and BNSF.

Featuring:

Sean Marotta, Senior Associate, Hogan Lovells

 

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Event Transcript

Speaker 1:                           Welcome to the Federal Society's Practice Group Podcast. The following podcast, hosting by the Federal Society for Litigation Practice Group, was recorded on Wednesday, February seventh, 2018 during a live tele form conference call held exclusively for Federal Society Members.

Laura:                                    Welcome to the Federal Society tele form conference call. This afternoon we will be discussing the after effect of the Bristol-Myers Squibb decision. My name is Laura [Flyn 00:00:21]. I'm the deputy director of practice group here at the Federal Society. As always, please note that all expressions of opinion are those of the expert on today's call. Today we are happy to have with us Sean M Marotta, senior associate at [Hogan Levels 00:00:36]. After remarks from Sean we'll go to audience question and answer. Thank you for sitting with us Sean. The floor is yours.

Sean Marotta:                   Thank you so much, and thank you everyone for joining. Uh, as mentioned, my name's Sean Marotta, and I'm a senior associate in the Hogan Levels [inaudible 00:00:51] Supreme Court Practice Group. I was on the team that briefed and won the Bristol-Myers Squibb versus Superior Court case in the Supreme Court last year, and I represent a major automotive manufacturer across the United States on personal jurisdiction, jurisdiction issues, but as always, everything I say today reflects my views and my views alone. Not that of Hogan Levels or any of the clients I represent.

                                                We'll be talking today about the supreme court's two personal jurisdiction decisions from the 2016 term. Bristol-Myers Squibb versus Superior Court and BNSF versus Tyrrell. But rather than talk in depth about just the cases, we wanted to discuss what is happening after Bristol-Myers and BNSF. What are the challenges and opportunities on the horizon for defendants that are seeking to assert their due process rights after these cases? But first, as I- as one always has to do in these briefings, let's start with a little bit of background on what personal jurisdiction is, Bristol-Myers, and the BNSF cases.

                                                Personal jurisdiction at it's core is about a defendant's right under the 14th amendment to be free from certain interference uh, by way of lawsuit in certain places. In other words, personal jurisdiction refers to a state court's power to haul a defendant before it, and impose a personal judgment against it or it's property. Uh, the 14th amendment restrains that because of the court has explained. Uh, federalism concerns mean that a defendant should not be subject to course of power of another state when they do not have certain minimum contacts or sufficient contacts with that state. And in the Bristol-Myers and BNSF decisions last year, the Supreme Court explained what it means by that.

                                                Personal jurisdiction comes in two forms. One is called general or all-purpose jurisdiction. General jurisdiction means you can be subject to suit in that state for literally anything that someone might have a lawsuit for you against, regardless of whether the lawsuit has any connection to the state. So, for instance, um, it doesn't matter under general jurisdiction if a car accident occurred in California and you live in New Jersey, you can be sued in New Jersey for that car accident because New Jersey has general jurisdiction over you.

                                                Specific jurisdiction on the other hand, which is the form of jurisdiction that is talked most about today, refers to claims or lawsuits that arise from the defendants contacts with the state. In other words, it has something to do with what you did in the state. So, in my example of a California car accident, that fact you drove in the state and hit someone there would create the sufficient contacts uh, such that you can be sued in California for that lawsuit, uh, for that car accident, but not anything else.

                                                Um, so in the Bristol-Myers Squibb and BNSF decisions, the Supreme Court explained both specific jurisdiction in Bristol-Myers and general jurisdiction in BNSF. The Bristol-Myers decision was a specific jurisdiction case. Uh, very briefly, it had to do with an aggregated set of lawsuits against Bristol-Myers Squibb f- uh, involving [instugged Plavix 00:04:05]. The plaintiff say claim that they took Plavix and uh, suffered side effects, but the plaintiffs came from all over the United States. Some small percentage of them lived in California, took Plavix in California, and were injured in California, and for them, Bristol-Myers Squibb agreed that it was perfectly okay for them to sue in California. After all, what Bristol-Myers Squibb did in California, sell these people Plavix through their pharmacies was related to their claims, so they brought in California, the injuries that they suffered.

                                                But as for the people from across the United States, the people from Texas, the people from West Virginia, and elsewhere. Bristol-Myers Squibb said that there was no connection between their lawsuits and what Bristol-Myers Squibb did in the state. Sure, Bristol-Myers Squibb admitted we have some business in the California. In fact, we have a lot of business in California, but these particular claims, Bristol-Myers Squibb said, had nothing to do with um, what we did in the state. The California courts disagreed holding under existing California precedent that specific jurisdiction had a sliding scale. That meant that the more contacts you had with the state, the less connection there had to be between what the defendant did in the state and the lawsuit, and what the California Supreme Court said by a bare four to three majority is that uh, because Bristol-Myers Squibb does a lot of work in the state and because all of the claims sounded more or less the same, they were all product cases. That was enough for all of the suits to be brought in California.

                                                And then, the Supreme Court the plaintiffs continued to press that argument saying that, "Well look, it makes sense. It's efficient for us to aggregate lawsuit in California." After all, since Bristol-Myers Squibb admits it has to fave the California plaintiffs in California, how could it hurt? How could it be inconvenient for um, for Bristol-Myers Squibb to face a lawsuit there, for everyone. The Supreme Court disagreed. It pointed out that personal jurisdiction is not just about convenience of the defendant, although it does have something to with that. It's also about, more broadly, the um, federalism interest among the many states. As just as Kennedy pointed out rural argument, it doesn't make and they're somewhat patronizing to West Virginia or Ohio for California to say, "We're going to be the uh, decider of all national tort litigation because that's where the plaintiffs bar wants to bring its lawsuits." Uh, and the notions that federalism mean that states should regulate conduct that occurs in their state and not have to give it up to other states that have become destinations for foreign shopping.

                                                And so, what the court explained was- is that as for the non-California plaintiffs, they could not bring their claims in California because there was simply no nexus between Bristol-Myers Squibb's California activities. Their particular claims that arose were generally the plaintiffs lived and the state of California. Uh, it further went on to emphasize that a personal jurisdiction is a plaintiff by a plaintiff and impossibly a claim by claim analysis. In other words, you couldn't lump all of the plaintiffs together and simply say that there is a uh, lawsuit that has some sort of connection with California. And it further emphasized the due process has to do with the def- the defendant, not the plaintiff, so the fact it might be inconvenient for the plaintiffs to have to sue in other places doesn't mean that it was proper to bring Bristol-Myers Squibb into California's jurisdiction.

                                                In the BNSF case by contrast, the court reaffirmed what it had to say about general jurisdiction in its earlier 24 decision in [Dimeler Agey 00:08:03] versus [Bowman 00:08:03]. In the BNSF case, uh, two plaintiffs, Tyrrell and another, brought law- brought suit in Montana for claims arising under the Federal Employee's Liability Act, which deals with certain uh, injuries on the job on railroads. Uh, be it- although neither plaintiff worked for BNSF in Montana, uh, the plaintiffs brought these claims to Montana because Montana is viewed as a friendly jurisdiction for Federal Employee Liability Act, or FELA claims. Uh, BNSF argued that there was no general jurisdiction over it Montana because although it does have some employees there, it has some railway there, and it derives some revenue from Montana, um, it is palled in comparison to the rest of BNSF's uh, operations elsewhere. It was another- it was, in other words, a small fraction of what BNSf did in the state.

                                                And the Supreme Court agreed. It reaffirmed its role from Dimeler Agey versus Bowman in that a company is typically only at home and therefor subject to general jurisdiction only where it is incorporated or has its principal place of business, which is synonymous with its headquarters typically. And because there is neither of those typical um, cases there, BNSF isn't headquartered or incorporated in Montana, and because its operations are a mere fraction uh, in Montana as opposed to the rest of the wor- as opposed to the rest of the country, there could be no general jurisdiction.

                                                The court also emphasized that although some plaintiffs had tried to downplay the Dimeler decision by emphasizing that it involved a foreign plaintiff suing a foreign defendant in a domestic court that its general jurisdiction test, that at-home test, applies equally to any kind of case brought into this- brought in the United States courts. It is not merely limited to uh, foreign plaintiffs and foreign defendants. It's the test for all general jurisdiction.

                                                So, with that background in mind, let's talk about what is on the horizon for personal jurisdiction in the future. What do we- what are plaintiffs going to be arguing? What are defendants going to be arguing? And what questions are the courts and possibly the Supreme Court going to gave to face in the future? I think the first takeaway from Bristol-Myers is that we still don't have a standard for relatedness. Specific jurisdiction, to briefly recap, requires three things. First, a defendant has to uh, do business or have some contact with the state. Second, the plaintiff's claims have to arise out of or relate to those contacts with the state. And finally, jurisdiction in the state has to be fair. But yet, even after Bristol-Myers Squibb, the court has never really defined what it means to arise out of or relate to uh, a defendant's contacts in the state.

                                                It does state several principles for specific jurisdiction that are bare on the relatedness uh, question. It says, for instance, that relatedness is not a sliding scale. In other words, a greater showing of contacts does make up for a lot- a nonexistent showing of uh, relatedness. It says that unrelated business contacts in the state don't count, so in other words, just because you can point to some sales, some research, or something that has nothing to do the plaintiffs claims in the state that in it's enough for relatedness. And it says at the very least that relatedness is a plaintiff by plaintiff if not claim by claim analysis. But just as [inaudible 00:11:38] sent in Bristol-Myers Squibb points out, "A majority stops short of embracing a causal or proximate cause test relatedness leaving the division among that state- state circuits and state high courts."

                                                And so, what does that mean? Before Bristol-Myers Squibb and it was argues in the Bristol-Myers Squibb petition for [inaudible 00:11:57] that there is essentially a three way split on what arises out of or relates to means. On the one hand, some courts hold that there has to be proximate cause standard. In other words, there has to be both but for causation and there has to- and you can weed out certain even but for causes that are not sufficiently uh, important or weighty. And so, what does but for mean? Well, it means the same thing. It means in tort. It means that but for, the defendant's contacts with the foreign, the plaintiff's claims would've arisen. In other words, you put yourself in a counter factual situation. Imagine a world in which the defendant has no contacts in the state. Doesn't do any business there, doesn't have any employees there, doesn't sell anything there. You ask yourself, in those circumstances, would the plaintiff still have claims. What would the story of his claims be? And if the plaintiff wouldn't have- if the plaintiff's claims would be exactly the same, then the- then the defendant can't be subject to personal jurisdiction there.

                                                Other circuits and other courts have said that it's just a but for standard. In other words, all you ask is but for the defendant's contacts with the foreign, would the plaintiff have a claim? And then you stop. You don't ask, "Well, even though there might be but for causation, is it sufficiently weighty or important contacts that would make relatedness proper. And to take a common example that was in the law review literature, imagine that I am sued for uh, legal malpractice her in Washington DC. Uh, could the plaintiff go to the state of Virginia where I went to law school and say, "Well, there is but for causation in this case because if Sean had never gone to law school, he would've never become a lawyer, and therefore, he would've never committed legal malpractice. Therefore, Sean's contacts with the state of Virginia, going to law school, is a but for cause of my claims." In- in uh, jurisdictions where there's just a but for standard, they would say that that satisfies relatedness, but in states where they say there is a proximate cause standard, they would likely say there's no personal jurisdiction, or at least no relatedness, because the mere fact I happened to go to law school in Virginia really has nothing to do with the f- the law- the lawsuit. It just happens to be something that is in the causal chain somewhere.

                                                And by contract, some courts have said that there is not a causal standard at all. In other words, they would say that all there has to be is some showing of relatedness, and relatedness doesn't have to be uh, a but for or proximate cause standard. And even within those courts that had a non-causal standard, some courts are more picky than others. Texas, for instance, has a fairly demanding uh, non-causal standard requiring that the contacts be of the sort that are important to the lawsuit. Uh, so in other words, you know, in the seminal case from Texas, a minor was out on a camping trip with a tour company in another state uh, and fell and was injured. The Texas Supreme Court said that the mere fact that the uh, company advertised in Texas was not enough to create specific jurisdiction even under its non-causal test.

                                                Other states, like California before Bristol-Myers Squibb and the district of Columbia, have a fairly loose um, non-causal test. With DC, for instance, saying that, "Uh, well, yes it's true that the plaintiff slip and fell in the district in uh, the common wealth of Virginia, but the super market advertises in both the district and in Virginia, so that is sufficient relatedness to bring the slip and fall claims in the district. It's unclear how- to what extent those very loose non-causal tests exist after Bristol-Myers Squibb, but by the Supreme Court declining to offer a test, personal jurisdiction continues to be something that's argued by analogy rather than by any predict- predictable uniform standard that defendants can point to.

                                                And to take it from the abstract to the concrete, let me mention two examples that reoccur in the case law where a standard would be helpful. Where it would be helpful to know uh, what the relatedness standard is. The first is the case where you have a product defect suit and the injury occurred in the foreign state. So to take an example, suppose I buy a set of skis in Vermont uh, while I'm out there, and then I bring them home with me to Wyoming. The manufacturer, it turns out, sells the exact same kind of skis in Wyoming. Uh, same brand, same make, same model. I then take those skis and go down the slope in Wyoming and I'm injured. Uh, in that particular case, you would say that there's no but for cause, and I bring suit in Wyoming where I live. In that case, there is no but for cause between what the defendant did, which is selling these skis in Vermont, and my injury, which happened to occur in Wyoming.

                                                Um, the Bristol-Myers Squibb decision suggests there would be no personal jurisdiction there because what the Bristol-Myers Squibb decision says, citing it's earlier decision in Walden, is that, "Mere foreseeable injury to a plaintiff in the foreign state is not enough." And to explain why there's no but for cause in my cause, even if the- even if the ski company had never sold any skis in Wyoming, I still would've bought my skis in Vermont and I still would've brought them to Wyoming with me and I still would've gone down the slope in Wyoming and I'd still be hurt in Wyoming. So, we can't say the defendant's contacts were with Wyoming had any- had any but for relationship to my injury. So again, Bristol-Myers Squibb talking about the court's earlier decision on Walden versus [Feore 00:17:57] where it says that even though a foreseeable injury occurred to the plaintiff in the foreign state is not enough, which suggests that there is not personal jurisdiction in that case.

                                                But because the court has never said that it's a but for standard, there's really no certainty in the lower courts on this recurring fact pattern. In fact, the fact pattern I just gave you is drawn from a temp circuit case where it found no specific jurisdiction under a but for standard. Uh, and quite frankly, cases in the district courts are all over the map on this particular uh, fact pattern with some relying on the so called stream of commerce to say that there is jurisdiction even without but for causation, and others following the but for causation and saying that there is um, that there is no personal jurisdiction over the defendant. But again, because the Supreme Court hasn't told us if it's a but for standard, uh, we see that disarray on a very common set of facts.

                                                The second example I'll give is uh, comes from pharmaceutical product defect cases. In the wake of Bristol-Myers Squibb, plaintiffs bar is still looking for a way to keep it's- their cases in their forums, and so what they do is they argue that because pharmaceutical manufacturers set up so called study sites, places where a new drug is going to be studied in patients all across the United States, suit on all of the product defect claims can be brought uh, any place there's a study site. So, to give an example, suppose a drug is tested in Illinois and California and a couple different other places uh, because that's where the doctors were conducting the study happened to be located. Plaintiffs counsel argue that all of the drug defects suits can be brought in Illinois or California because they argue, but for that study site, there would have been ... Uh, that the study site contributes to the safety information regarding the drug, and had there not been this defective process in designing or testing the drug, then there would've been adequate warnings where the drug would've been decided differently or designed differently, and then their client would've not been hurt.

                                                It's not clear under those circumstances whether there's even but for causation because it's unclear how much a part- one study site out of perhaps dozens contributes to uh, the overall design of a drug, but even if you accept there's but for causation in that case, it's not clear that there's proximate causation because again, ten or 12 or 15 patients enrolled in a nationwide trial in a particular state don't meaningfully contribute to uh, the overall safety. And it's not that any of the plaintiffs claims to have anything to do with the Illinois study site. It might just be something that's out there, but at least in the Illinois Appellate court and in some district courts uh, judges have accepted this sort of argument saying that, "Well, that's a close enough but for relatedness test such that there can be personal jurisdiction over the claims in the state." But again, there's an ongoing split on this. A Missouri on roughly those same facts said that there was not personal jurisdiction over the drug manufacturer because the study was minor and fairly unimportant.

                                                So, those are two examples that we're going to see come up in the case law, and I think we're, again, going to see someone go to the Supreme Court and say, "You really need to give us a test. We need a strict ... We need a understandable standard for what this relatedness thing means." Uh, but until we do, I think we're going to see a continualling disagreement among the district court and among perhaps the Appellate courts on facts that routinely recur in the case law.

                                                Another issue that we're going to see after Bristol-Myers Squibb is can there be general jurisdiction other than the paradigm places of where a corporation is incorporated or headquartered. The court has- has never said that those are the only places, saying that they're only the typical or exemplar places. And it gave an example of it's earlier decision in Perkins where it said that's the kind of exceptional case where company could be at home outside of where it's incorporated and where it's headquartered. You might ask whether it was really because in Perkins, it was a Philippine mining company that during World War Two and the envision- evasion oh the Philippines temporarily relocated it's operations to Ohio. So, you might say in those cases that actually the principle place of business was in Ohio, but regardless, that's at least the kind of case that the court has thought is not fit, um, could be- couldn't result in general jurisdiction outside of where a company is incorporated in and headquartered.

                                                And until the court says that those are the only two places, plaintiffs will continue to try to argue that their state's qualified for special treatment. In particular, you see this in large states like New York and California and Texas where a company may have quite extensive um, commercial contacts there, mostly because of the size of the states and their importance to American economy. After all, if you're not California market to any great degree and you're a national company, that's quite unusual. Um, and that's going to relate to the next point I'll talk about uh, discovery, but until the court finally clamps down and says no. When we say the exemplar places, we mean those are really the only places absent come sort of showing of a temporary headquarters moved, like in Perkins. We'll continue to see plaintiffs try to weasel their way out of it.

                                                Uh, relatedly we're going to see uh, the continuing battles over jurisdictional discovery. Uh, plaintiffs are going to continue to propound discovery, looking for every contact with the state that a defendant might have for two reasons. One, plaintiffs are going to be looking some sort of causal or but for connection, such as when they're trying to find those study sites like in the pharmaceutical cases. But I think more generally, plaintiff are going to be looking for a way to grind a defendant into withdrawing the personal jurisdiction motion. After all, if you have to interrupt the commercial running of your business to go hunt down how many employees you have in a state, you know, every contract you have with the state, every time you've communicated with someone in the state. These are the kinds of examples of interrogatories that are propounded. Uh, you might be tempted to just withdrawal t he jurisdictional objection and get on with the case.

                                                Um, how much the courts are willing to put up with these sort of broad requests, particular in the face of Dimeler and DNSF, is unclear. Partly Dimeler and DNSF have been unhelpful because although they say that uh, general jurisdiction is not just a quantitative analysis, it's a qualitative analysis. They often go on to give the ratios. They say that there are only X percentage of employees. Only Y percentage of revenue was derived from the state. So, with the court mentioning those particular features of Bris- of uh, Dimeler and BNSF, uh, plaintiffs will continue to seek that information, and defendant will have to continue to provide it. With most national companies, their sales will probably be fairly- fairly proportional to uh, the state's role in the national economy, but it's still information that's going to have to be dredged up from inside the business and cane throw a wrench into the uh, normal functioning of the business, and therefor be disruptive.

                                                In federal court, judges may be more attuned to these types of fishing expeditions, and they have circuit case law saying that plaintiffs must make a prime [inaudible 00:25:33] showing as to the relevance of the material they seek. In other words, plaintiffs might have to show, well, what is the best thing you think you're discovery might find, and if so, how is going to prove personal jurisdiction? But in state court, where discovery standards tend to be looser and state trial judges uh, perhaps less willing to quash personal jurisdiction discovery. Um, defendants may have to produce documents in an interrogatories, or even put up a corporate representative for a deposition. Um, I think we're going to see more state court case law about these uh, jurisdictional discovery issues, and there's, in fact, a case in front of the Texas Supreme Court court right now on the relevance standard for jurisdictional discovery after Dimeler.

                                                Before I turn it over to questions, let me also mention two more areas where I think we're going to see uh, personal jurisdiction in the future. One is so called consent by registration, and this theory is based on a 1920s and earlier set of cases from the U.S. Supreme Court that held in held in the era before the modern international Shiver versus Washington a cave. That if a company registers to do business in a state and if the state statues deem that consent to do b- consent to general jurisdiction, that is all purpose jurisdiction in the state, that is acceptable under the due process clause. And there's a reasons the courts said that in 1920 and earlier because before you have the modern notion of specific jurisdiction, a corporation to be subject to suit in a state either had to be physically located in the state, which generally meant where it was incorporated, or it had to quote on quote consent.

                                                So, courts tried to find ways to imply consent to try to create something it can to what we call specific jurisdiction today. Uh, the Supreme Court's later cases, starting with international shoe, and then onto a case called Shaffer versus Heitner have continued to point out that the consents that was present during this earlier era was a fiction. Nobody actually agreed to general jurisdiction. It's just something that courts said to try to create um, specific jurisdiction in an era that didn't have it. But yet, to this day, plaintiffs are now rediscovering consent by registration and arguing that large national corp- corporations, m- many of whom have registered to do business in all 50 states or at least every state where they have sales and employees, have somehow consented to general jurisdiction by uh, doing so, and thus, bringing in through the back door all of the national aggregated class actions and mass actions that Bristol-Myers Squibb and that Dimeler said aren't permissible.

                                                Um, thankfully for defendants, the trend has been to reject consent by registration. Most courts that have confronted the issue after Dimeler have said uh, and those state courts that have done so, have done so not by reaching the constitutional issues saying that it violates the due process clause, but rather by saying that our state corporate- our state uh, corporate laws, which generally require a defendant to register to do business and to appoint an agent for service of process, don't have anything to say about general jurisdiction. Service of process, after all, just says how do you get the summons and complaint to the defendant?

                                                Personal jurisdiction, on the other hand, is quite different. Personal jurisdiction is about the power to exercise authority over the corporation, and what these state high courts have said, including the Illinois Supreme Court, the Wisconsin Supreme Court, the Delaware Supreme Court, the Oregon Supreme Court, and the New Jersey Appellate Division, have all said is we just don't see anything in our state's statues that suggest that the drafters intended to create consent to per- general personal jurisdiction out of them.

                                                So although that's a hardening trend, there are some jurisdictions and some circuits and state appellate courts where, both pre and post Dimeler, were seeing uh, a continue to embrace of consent by registration. So, for instance, in Minnesota, in New York, in, most notably, Pennsylvania, which has a largest best to stock it and there's a very popular forum for uh, plaintiffs seeking to bring asbestos claims, there are still continued arguments and some holdings in the trial courts that consent by registration remains good law after Dimeler. Uh, there are some appeals including in New York and in Minnesota, but in Pennsylvania in particular, the state trial court has been unwilling to certify the question for interlocutory appeal, and the state appellate court has been unwilling to require it to certify the issue for interlocutory appeal. And so, what you've seen is defendants continuing to fight in the Philadelphia's asbestos docket uh, trying to find a way to get this issue up for appeal and possibly for U.S. Supreme Court resolution. But until then, um, you're seeing these large nationwide companies continue to be hauled into Pennsylvania uh, under this consent by registration theory.

                                                The final thing I wanted to talk to about is nationwide class actions after Bristol-Myers Squibb. As I mentioned a couple times before, Bristol-Myers Squibb said that personal jurisdiction is a, at least, a plaintiff by plaintiff if not a claim by claim analysis, so what then is the implication for nationwide class actions. Some nationwide class actions are brought in a favored form for plaintiff's counsel where they have some class representatives that are located in the forum state, just like the California plaintiffs and Bristol-Myers Squibb. And there are many class, uh, class representatives who are from states outside of the forum state, and there is an argument that all of them can be brought into a class inside the forum. I'd say before Bristol-Myers Squibb and before Dimeler, there wasn't much uh, per- much of a personal jurisdiction site around them because for the sort of corporation that are class action targets, it was generally thought they were subject to general jurisdiction in the state, or it just wasn't something on defendant's radars.

                                                But now, after Bristol-Myers Squibb and after Dimeler and after BNSF, corporate defendants are realizing that trying to aggregate a class in that way of in state and out of state class representative, and thus in state and out of state uh, absent class members of the class's certified might not be appropriate because the state court might not- or the court might not have jurisdiction over the absent member's class point. So, they're arguing to strike the class allegations from the very beginning of the case, or they may be arguing that a class can't be certified of- of a nationwide class because of that. Because there won't be personal jurisdiction. And they might be arguing that currently certified classes should be de-certified.

                                                We don't have much uh, agreement as to how Bristol-Myers Squibb applies to nationwide class actions yet. Some district courts have read the tea leaves and said that nationwide class actions are not proper anymore, so in other words, you can't certify a class that includes those who if they were there on their own would not have uh, the court would not have specific jurisdiction over their claims. And other courts have said, particularly in the multi-district litigation context, that the benefits in federal court have aggregated litigation um, are simply not addressed by Bristol-Myers Squibb in that they continue to be proper. And we saw that particularly in the multi-district litigation context with the court saying that because the point of multi-lit-district litigation is bring cases into a single forum uh, the kinds of concerned raised by Bristol-Myers Squibb don't necessarily apply. And given the continuing fights around class certification and given that class certification could often be what makes or breaks the case uh, and a- and dictated defendant's willingness to settle, we're going to see a lot more fights around that. And the motion to strike class allegations is probably going to be part of the standard class action defense playbook moving forward.

                                                So with that, I'll turn it over to questions and just say that although Bristol-Myers Squibb and BNSF were certainly very important cases, they didn't answer everything about personal jurisdiction and they in fact left many very important open. So, the hope of some of the bar that Bristol-Myers Squibb and BNSF, we're going to be clarifying or seminal decisions that are going to uh, put personal jurisdiction to rest. I think in many ways are going to be disappointed, and we're going to see personal jurisdiction to even be more of a question uh, up and down the appellate system. So with that, let me turn it over to questions.

Laura:                                    Let's go to audience questions. In a moment you'll hear a prompt indicating that the floor mount has been turned on. After that to request the floor, enter star then the pound key. When we get to your quest, you will hear a prompt, and then you may ask your question. We will answer questions in the order in which they are received. Again, to ask a question please enter star then the pound key on your telephone keypad. Let's go to our first audience question.

Audience:                           Um, Sean, I was interested in your thoughts on um, limits on federal court personal jurisdiction. I know that some people argue that well, the federal system is- is all one big uh, jurisdiction, and so if the Federal Government wants to allow a uh, driver in a car accident made to be sued in Hawaii they could do so, uh, and that the- the limits on state jurisdiction don't apply, but it seems to me that if- if uh, uh, case like BNSF are based on the idea that it's unfair to defendants to be all to variant in convenient forums that uh, that perhaps the ought to be some due process limits on federal jurisdiction. Such as, for example, an MDLs where people get uh, uh, drawn all across the country. I'm wondering what you see there as uh, any application of the BNSF to the federal courts.

Sean Marotta:                   Certainly. So, in Bristol-Myers Squibb as it had in all of it's earlier cases including Dimeler and including Jana Castro, uh, the Supreme Court has reserved the question of whether different or the same personal jurisdiction concerns apply in federal court when congress or the rule making meres are acting under the fifth amendment. 'Cause remember, the 14th amendment applies to the states and the fifth amendment applies to the federal government. Um, in general, the lower courts have held that when congress wants, it can extend the jurisdiction of the federal courts up to the full limits of the fifth amendment, which is to say that rather than looking at the defendant's contacts with a particular state, you would look at the defendant's contacts with the United States as a whole. So, you would ask has the defendant purposely availed himself of the privilege of doing business in the United States? Has the- Are the plaintiffs claims related to the defendant's uh, activities in the United States?

                                                Um, I think what most lower courts would say under the hypothetical you proposed where somebody, you know, who has a car accident in New York and is forced to sue in Hawaii. Um, I think you can perhaps argue that that could violate traditional notions of fair plan for substantial justice, which is the third prong under personal jurisdiction. Although, in general, it's quite hard to get a case kicked for personal jurisdiction under that third prong. And also, of course, there are other things like venue and forum non-convening ends that the federal courts used to get rid of that case. In the multi-litidit- uh, district litigation context, uh, the courts that have addressed the issue so far had tended to say that because multi- the MDL statue implicitly uh, invokes the fifth amendment, and is really more about venue rather than personal jurisdiction. So in other words, you say there is sufficient personal jurisdiction where with the forum where the case was filed, and then where the case is sent under the MDL statued is just a question of venue. Um, those arguments, the arguments that defendants have made saying that that's unfair have generally fallen, but you can certainly see after Bristol-Myers Squibb them taking another run at it. But thus far, the Supreme Court has very uh, pointedly avoided the question, and the lower courts have said generally that congress is not uh, bound by the same sorts of restrictions.

Laura:                                    Again, to ask a question, please enter star then the pound key on your telephone keypad. While we wait for our next audience question I'll make a brief announcement. Our next tele form conference call is scheduled for tomorrow, Thursday February eighth. That call will be a regulatory transparency project tele form that will feature O- [Oriah 00:39:01] administrator Naomi [Rowe 00:39:02]. Again, to ask a question, please enter star then the pound key on your telephone keypad. Um, while we wait for a next question I'll ask one of my own. When do you foresee the general jurisdiction question reappearing in a- in a Supreme Court again?

Sean Marotta:                   I think it will be awhile before we see another general jurisdiction case. At least a sort of straight forward general jurisdiction case that asks, "Is this corporation subject to general jurisdiction in the forum state?" Um, even BNSF, which more or less reaffirmed the Dimeler case or came up to the Supreme Court not so much on the general jurisdiction holding, but rather on a specific question of whether the Federal Employee's Liability Act uh, created jurisdiction in the state courts, and the Supreme Court held there wasn't. I think you're going to see it come up again in one of two- uh, in really almost the summary reversal context where if you get a state appellate court or a state high court that steps out and finds a national company subject to general jurisdiction in the state where the corporation isn't um, where the corporation is more or less doing the same kind national business that you would expect out of any national company. You could possible see a corporation going to the Supreme Court and asking them to finally put this matter to rest.

                                                But until then, at least on the sort of general question of when a company is subject to general jurisdiction because of its extensive contacts in the state, state appellate courts and national appellate courts have been doing a pretty good job of holding that line. Uh, the only question is going to be is if the state steps out, and we see the issue go up again. I think what's far more likely is we're going to see general jurisdiction go up to the Supreme Court under the guides of the consent by registration issue I was discussing. Um, the Supreme Court explicitly re- reserved in the BNSF decision whether consent by registration continues to be good law. Saying that it wasn't decided by the l- by the Montana Supreme Court, and so they weren't going to address it in the first instance, but that is probably going to be the next big fight in general jurisdiction.

Laura:                                    Again, to ask a question, please enter star then the pound key on your telephone keypad. A reminder to keep an eye out for emails announcing upcoming tele form calls, and to consult the full schedule of our upcoming calls on the Federal Society's website, fedsoc.org. Also available there are podcasts of previously recorded tele form calls you may have missed. Again, to ask a question, please enter star then the pound key on your telephone keypad. Not seeing one. I was wondering if you could elaborate on why the Supreme Court didn't give a definitive answer one way or the other on um, on the question of a third jurisdiction when they knew it would probably bring up a lot of conflict between the circuits?

Sean Marotta:                   I think there are two reasons. One is that Bristol-Myers Squibb was argued in April and was sufided in June, so just uh, given that short turn around, um, you often see outside the blockbuster cases. The Supreme Court puts out opinions that uh, certainly address the question in front of it, but don't, I think, reach a broader than that. And I think second and relatedly, Bristol-Myers Squibb had the benefit of being an eight to one decision, which uh, with all of the court except justice [Setof Imor 00:42:21], who has been a perineal debenture in these cases uh, joining justice leader's opinion. And one can imagine that to hold together all eight justices uh, justice leader had to write his opinion more narrowly. Had he reached and given a definitive answer that it's a but for standard or it's a proximate cause standard, that might have led uh, the court to break off into different directions with dissenting inquiring opinions. And even if perhaps there were five votes for a particular test, you could imagine the court, which tried to be minimalist when it can be uh, in certain areas, might have wanted to hold an eight justice majority together, and therefor they settled on a more limited and more fact bound uh, quest- uh, issue waiting instead for another case to bring up the uh, the definitive test.

Laura:                                    I'll make a final call for questions. Again, to ask a question, please enter star then the pound key on your telephone keypad. Not seeing any. Sean, would you like to make some closing remarks?

Sean Marotta:                   I think I'll just close by saying that personal jurisdiction is going to be an important um, really an important tool in defense attorney's toolbox moving forward. Whereas before, when defense attorneys defended national corporations, they thought that personal jurisdiction challenges weren't worthwhile either because the company would undoubtedly be subject to general jurisdiction in that state or because the cost and expense of general jurisdiction discovery wouldn't make it worth it. Uh, you're not going to see more and more companies raise personal jurisdiction either as a way to get cases out of unfavorable forums, or as a way to break up the kind of mass litigation we've seen in the past. Uh, so personal jurisdiction is going to be important. It should probably be something that every defense attorney assesses when a new case comes in, and that companies should be thinking about it as a strategy as part of their litigation toolbox if they haven't already.

Laura:                                    On behalf of the Federal Society, I want to thank our expert for the benefit of his valuable time and expertise today. We welcome listener feedback by email at info.fedsoc.org. Thank you all for joining us. We are adjourned.

Speaker 1:                           Thank you for listening. We hope you enjoyed this practice group podcast. For materials related to this podcast and other Federal Society multi-media, please visit the Federal Society's website at fedsoc.org/multi-media.