This case calls upon us to decide whether California has personal jurisdiction over a nonresident corporate defendant on unique facts. Defendant Bristol-Myers Squibb Company (BMS) has been sued by dozens of California residents in a coordinated proceeding before the San Francisco Superior Court. They allege defects in Plavix, a drug BMS manufactures and sells throughout the country. Jurisdiction over BMS as to these plaintiffs is conceded. The question presented is whether California also has jurisdiction over BMS regarding identical Plavix defects claims brought by hundreds of nonresident coplaintiffs, the real parties in interest here (RPI), in the same coordinated proceeding, consistent with the due process clause of the Fourteenth Amendment.
BMS moved below to quash service of the summons regarding the RPI's complaints for lack of personal jurisdiction. The RPI argued that California has jurisdiction over BMS, whether it be general, that is, jurisdiction over claims unrelated to the forum state, or specific, that is, jurisdiction based upon the relationship of the RPI claims, BMS, and California. The trial court denied BMS's motion based on its conclusion that California has general jurisdiction over BMS, and did not address the issue of specific jurisdiction.
BMS filed a petition for writ of mandate in this court to reverse the trial court's ruling. We summarily denied this petition. However, on the same day that we did so, the United States Supreme Court issued Daimler AG v. Bauman (2014) 571 U.S. ___ [187 L.Ed.2d 624, 134 S.Ct. 746] (Daimler), which limited the application of general jurisdiction under the Fourteenth Amendment. Our own Supreme Court then granted BMS's petition for review and transferred the matter back to us for further consideration. Upon our review of the parties' further briefing and Daimler, we conclude California does not have general jurisdiction over BMS based upon the facts of this case.
This does not end our inquiry, however. Although the trial court did not address the issue of specific jurisdiction, we do so now because the underlying facts we rely upon are undisputed. In order to resolve this issue, we apply the time-honored test for the application of specific jurisdiction adopted by the United States Supreme Court in Internat. Shoe Co. v. Washington (1945) 326 U.S. 310, 316 [90 L.Ed. 95, 66 S.Ct. 154] (Internat. Shoe) and reaffirmed by it and the California Supreme Court over the past 65 years in order to determine whether such jurisdiction is consistent with the traditional conception of "`"`fair play and substantial justice.'"'" (Daimler, supra, 571 U.S.
On March 12, 2012, eight separate complaints, each including California residents and nonresidents as plaintiffs, were filed in the San Francisco Superior Court by or on behalf of 659 individuals, consisting of 84 California residents and 575 nonresidents (the RPI), who allegedly were prescribed and ingested Plavix. They (or their spouses) claim that they suffered adverse consequences as a result. Each complaint contains the same 12 causes of action.
Each of the complaints alleges in identical terms that defendants introduced Plavix in 1997 and heavily marketed it directly to consumers by falsely representing it "as providing greater cardiovascular benefits, while being safer and easier on a person's stomach than aspirin." According to the complaints, defendants knew that those claims were untrue and that ingesting Plavix involved "the risk of suffering a heart attack, stroke, internal bleeding, blood disorder or death [which] far outweighs any potential benefit."
On September 27, 2012, BMS filed motions to quash service of the summons regarding the complaints, but not with respect to the California resident plaintiffs.
BMS was permitted to refile a consolidated motion to quash with respect to the RPI, which it did on July 9, 2013. In this motion, BMS noted in passing that "[the RPI] cannot invoke specific jurisdiction here because it is limited to cases where the `controversy is related to or arises out of [the] defendant's contacts with the forum,'" citing DVI, Inc. v. Superior Court (2002) 104 Cal.App.4th 1080, 1089 [128 Cal.Rptr.2d 683]. Its principal argument, however, was that, under the recent decision of the United States Supreme Court in Goodyear Dunlop Tires Operations, S. A. v. Brown (2011) 564 U.S. ___ [180 L.Ed.2d 796, 131 S.Ct. 2846] (Goodyear), the trial court could not assert general jurisdiction over BMS unless BMS were "at home" in California. According to BMS, its California contacts did not rise to that level since it was neither headquartered nor incorporated here. BMS also argued, relying on factors that apply in a specific jurisdiction inquiry, that it would violate principles of fair play and substantial justice to require that it defend against the RPI's claims here.
The RPI responded that BMS's extensive contacts with California supported the assertion of general jurisdiction under leading cases such as Buckeye Boiler Co. v. Superior Court (1969) 71 Cal.2d 893, 898-899 [80 Cal.Rptr. 113, 458 P.2d 57]. They pointed out the factual differences between the present case and Goodyear and argued that Goodyear did not disturb
BMS reargued the importance of Goodyear in its reply. It also cited Spirits, Inc. v. Superior Court (1980) 104 Cal.App.3d 918, 926 [164 Cal.Rptr. 101] for the proposition that specific jurisdiction cannot be asserted "where neither the injury nor the conduct that led to it have a substantial relationship to California."
On September 23, 2013, the trial court heard argument on BMS's motion to quash, the matter was submitted, and the court denied the motion. In a subsequent written order, the court, relying heavily on Internat. Shoe, supra, 326 U.S. 310, and Hesse v. Best Western Internat., Inc. (1995) 32 Cal.App.4th 404 [38 Cal.Rptr.2d 74], concluded that a defendant's wide-ranging, systematic, and continuous contacts with a forum state justify the exercise of general jurisdiction over it. The court held that California had general jurisdiction over BMS because it had sold in the state nearly $1 billion worth of Plavix between 2006 and 2012 and 196 million Plavix pills between 1998 and 2006, had been registered with the California Secretary of State to conduct business since 1936, maintained an agent for service of process in Los Angeles, operated five offices in California that employed approximately 164 people, employed approximately 250 in-state sales representatives, owned a facility in Milpitas employing 85 people that was used primarily for research, operated other facilities that were used primarily for research and laboratory activities in Aliso Viejo, San Diego and Sunnyvale, and had a small office in Sacramento that was used by the company's government affairs group.
The court did not directly address the question of whether, as the RPI argued in the alternative, BMS is amenable to suit in California under the doctrine of specific jurisdiction. However, as we will see, the court's references to BMS's extensive activities in California, its enjoyment of the benefits and protections of its laws, and the exercise of jurisdiction comporting with "`traditional notions of fair play and substantial justice'" (Internat.
BMS filed the pending writ petition on October 22, 2013. After review of the RPI's verified preliminary opposition and BMS's reply, we summarily denied the petition on January 14, 2014 — the same day that the United States Supreme Court announced its decision in Daimler. BMS promptly sought review in the California Supreme Court, relying principally upon Daimler and Goodyear.
On February 26, 2014, the court granted that petition and transferred the matter back to us with directions to vacate our prior order and issue an order to show cause why the relief sought should not be granted. We did so on March 13, 2014. The RPI filed their verified opposition, but not a formal return, on March 28, 2014. BMS filed its traverse on April 14, 2014, in which it points out that no formal return including a verified answer was filed. It argues that the opposition was not effective to deny the factual allegations of the petition, citing, among others, Eisenberg et al., California Practice Guide: Civil Appeals and Writs (The Rutter Group 2014) paragraph 15:223, page 15-96.14. However, BMS's legal conclusions have not been admitted. And, to the extent that the facts were effectively denied in the RPI's verified preliminary opposition and opposition, we exercise our discretion to treat those facts as denied.
We granted leave for the Chamber of Commerce of the United States of America to file an amicus curiae brief in support of BMS's petition. The RPI did not respond, but the Consumer Attorneys of California and the American Association for Justice subsequently filed unopposed applications for leave to file amicus curiae briefs in support of the RPI, which we also granted. BMS filed a response to those amicus curiae briefs on June 9, 2014. Prior to oral argument, we asked the parties to focus their presentations on certain questions related to whether or not the lower court could exercise specific jurisdiction over BMS under the unique circumstances of this case. The parties did so at oral argument, which took place on June 17, 2014, and the matter was submitted.
BMS argues that Daimler makes clear the trial court erred in concluding it had general jurisdiction over BMS. We agree.
We begin our analysis of personal jurisdiction with a review of the two seminal cases for our modern jurisprudence on the subject, Pennoyer v. Neff (1878) 95 U.S. 714 [24 L.Ed. 565] (Pennoyer) and Internat. Shoe.
In Pennoyer, supra, 95 U.S. 714, the Supreme Court articulated a strictly territorial rule for what personal jurisdiction a state court could assert over a nonresident consistent with the Fourteenth Amendment. Neff, a California resident, owned a tract of land in Oregon. Mitchell, an Oregon resident, sued Neff in an Oregon state court for money owed for legal services rendered. After service of the suit by publication and mailing to Neff was made as required by Oregon law, judgment by default was entered against Neff. Pursuant to an execution issued upon this judgment, Pennoyer acquired the tract under a sheriff's deed. Neff then sued Pennoyer in federal court to recover the tract. (Pennoyer, supra, 95 U.S. at pp. 719-720.)
The Pennoyer court determined the judgment against Neff was void because a state could not, consistent with constitutional due process, acquire jurisdiction by the service methods used against a nonresident who is absent from the state. The court stated, "The authority of every tribunal is necessarily restricted by the territorial limits of the State in which it is established. Any attempt to exercise authority beyond those limits would be deemed in every other forum, as has been said by this court, an illegitimate assumption of power, and be resisted as mere abuse." (Pennoyer, supra, 95 U.S. at p. 720.) In other words, "no State can exercise direct jurisdiction and authority over persons or property without its territory." (Id. at p. 722.)
Sixty-seven years later, the Supreme Court replaced this strict territorial rule with a more flexible one in Internat. Shoe. International Shoe Company was a Delaware corporation headquartered in Missouri (International Shoe).
The court concluded, "It is evident that the criteria by which we mark the boundary line between those activities which justify the subjection of a corporation to suit, and those which do not, cannot be simply mechanical or quantitative. The test is not merely, as has sometimes been suggested, whether the activity, which the corporation has seen fit to procure through its agents in another state, is a little more or a little less. [Citations.] Whether due process is satisfied must depend rather upon the quality and nature of the activity in relation to the fair and orderly administration of the laws which it was the purpose of the due process clause to insure." (Internat. Shoe, supra, 326 U.S. at p. 319.)
The court found that International Shoe's activities were "systematic and continuous throughout the years in question. They resulted in a large volume of interstate business, in the course of which appellant received the benefits and protection of the laws of the state, including the right to resort to the courts for the enforcement of its rights. The obligation which is here sued upon arose out of those very activities. It is evident that these operations establish sufficient contacts or ties with the state of the forum to make it reasonable and just, according to our traditional conception of fair play and substantial justice, to permit the state to enforce the obligations which appellant has incurred there." (Internat. Shoe, supra, 326 U.S. at p. 320.)
Since Internat. Shoe and before Daimler, courts determining whether general jurisdiction existed often focused on the quality and quantity of contacts a company had with a particular state, without much additional analysis or inquiry. This appears to be the approach taken by the RPI and court below. However, as we now discuss, Goodyear and Daimler together make clear that general jurisdiction should be asserted only when the evidence indicates the company is "`essentially at home'" in the state. (Daimler, supra, 571 U.S. at p. ___ [134 S.Ct. at p. 751].)
The Supreme Court first referred to this "at home" standard in Goodyear. Two young soccer players from North Carolina were killed in a bus accident outside Paris, France. Their parents filed wrongful death suits in the state courts of North Carolina against three foreign Goodyear entities, which were located in Luxembourg, Turkey, and France respectively (together petitioners). They all were indirect subsidiaries of Goodyear USA, an Ohio corporation also named as a defendant. The facts showed that the petitioners "[had] no place of business, employees, or bank accounts in North Carolina. They [did] not design, manufacture, or advertise their products in North Carolina. And they [did] not solicit business in North Carolina or themselves sell or
The petitioners (but not Goodyear USA) moved to dismiss the claims against them for lack of personal jurisdiction. The trial court denied their motion and the North Carolina Court of Appeals affirmed. The Supreme Court reversed in a unanimous decision written by Justice Ginsburg. It rejected the view of the North Carolina courts that North Carolina had general jurisdiction over the petitioners consistent with the due process clause of the Fourteenth Amendment because some of their tires, although manufactured abroad, had reached North Carolina through the "`the stream of commerce.'" (Goodyear, supra, 564 U.S. at p. ___ [131 S.Ct. at p. 2851].) "A connection so limited between the forum and the foreign corporation ... is an inadequate basis for the exercise of general jurisdiction. Such a connection does not establish the `continuous and systematic' affiliation necessary to empower North Carolina courts to entertain claims unrelated to the foreign corporation's contacts with the State." (Ibid.)
BMS relies here, as it did in the trial court, upon the Goodyear court's use of the phrase "at home" as setting the minimum standard under which general jurisdiction can be asserted against an out-of-state corporate defendant. But that phrase was not explained in the court's Goodyear decision beyond the
Thus, while the court's decision in Daimler has proven BMS to be correct about the significance of these passing references to "at home" in Goodyear, a further contouring of the law of general jurisdiction was by no means obvious from the Goodyear decision. This was especially true in light of the Goodyear court's observation that "[t]he canonical opinion in this area remains ..." Internat. Shoe (Goodyear, supra, 564 U.S. at p. ___ [131 S.Ct. at p. 2853]) and its own quoting of the traditional standard for general jurisdiction: "`the continuous and systematic general business contacts' necessary to empower [the forum state] to entertain suit against them on claims unrelated to anything that connects them to the State." (Id. at p. ___ [131 S.Ct. 2857], quoting Helicopteros, supra, 466 U.S. at p. 416.)
The Supreme Court further explained its "at home" standard in Daimler. Argentinean residents with no connection to California sued Daimler AG, alleging that its wholly owned Argentinean subsidiary collaborated with state security forces to kidnap, detain, torture, and kill plaintiffs or their relatives in
Importantly for our case, the Daimler court also held that Daimler's connections to California through MBUSA were insufficient to support general jurisdiction. MBUSA, an indirect subsidiary of Daimler, served as Daimler's exclusive importer and distributor in the United States, "purchasing Mercedes-Benz automobiles from Daimler in Germany, then importing those vehicles, and ultimately distributing them to independent dealerships located throughout the Nation. Although MBUSA's principal place of business is in New Jersey, MBUSA ha[d] multiple California-based facilities, including a regional office in Costa Mesa, a Vehicle Preparation Center in Carson, and a Classic Center in Irvine.... MBUSA [was] the largest supplier of luxury vehicles to the California market. In particular, over 10% of all sales of new vehicles in the United States [took] place in California, and MBUSA's California sales account[ed] for 2.4% of Daimler's worldwide sales." (Daimler, supra, 571 U.S. at p. ___ [134 S.Ct. at p. 752].) Nonetheless, the court concluded, "[e]ven if we were to assume that MBUSA is at home in California, and further to assume MBUSA's contacts are imputable to Daimler, there would still be no basis to subject Daimler to general jurisdiction in California, for Daimler's slim contacts with the State hardly render it at home there." (Id. at p. ___ [134 S.Ct. at p. 760].)
"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. Plaintiffs would have us look beyond the exemplar bases Goodyear identified, and approve the exercise of general jurisdiction in every State in which a corporation `engages in a substantial, continuous, and systematic course of business.' [Citation.] That formulation, we hold, is unacceptably grasping.
The court further clarified that "general jurisdiction inquiry does not `focu[s] solely on the magnitude of the defendant's in-state contacts.' [Citation.] General jurisdiction instead calls for an appraisal of a corporation's activities in their entirety, nationwide and worldwide. A corporation that operates in many places can scarcely be deemed at home in all of them. Otherwise, `at home' would be synonymous with `doing business' tests framed before specific jurisdiction evolved in the United States." (Daimler, supra, 571 U.S. at p. ___, fn. 20 [134 S.Ct. at p. 762, fn. 20].)
We recognize that the trial court's determination that it has general jurisdiction was based on a record created and an analysis engaged in prior to Daimler. As a result, the RPI, who have the burden of proving jurisdiction here (Snowney v. Harrah's Entertainment, Inc. (2005) 35 Cal.4th 1054, 1062 [29 Cal.Rptr.3d 33, 112 P.3d 28] (Snowney); Vons Companies, Inc. v. Seabest Foods, Inc. (1996) 14 Cal.4th 434, 449 [58 Cal.Rptr.2d 899, 926 P.2d 1085] (Vons)), may not have pursued certain discovery and did not present certain facts and arguments that are relevant post-Daimler to determining whether general jurisdiction exists.
Specifically, the RPI focused on BMS's significant contacts with California. They did not establish that BMS is incorporated, has its principal place of business, or has its headquarters here. Further, the RPI did not present much, if any, evidence regarding BMS's activities in their entirety and, therefore, did not establish that BMS's contacts with California were somehow so exceptional as to render BMS "essentially at home" here. Based on the record before us, we cannot effectively distinguish BMS's extensive sales and research activities in California from the extensive sales activities of MBUSA in California as discussed in Daimler, which the Supreme Court ruled were insufficient to establish the state had general jurisdiction over Daimler. Therefore, the trial court's ruling that it had general jurisdiction over BMS cannot be allowed to stand.
As Division Four of this court has noted, "we do not review the reasons why the trial court ruled as it did, but consider the validity of its ruling. If a trial court's ruling is correct, we will affirm, even if its reasoning was flawed." (In re Automobile Antitrust Cases I & II (2005) 135 Cal.App.4th 100, 117 [37 Cal.Rptr.3d 258].) Although the parties debated specific jurisdiction
As suggested by Justice Sotomayor's concurrence in Daimler and the majority's response, this concept, referred to by Justice Sotomayor as "reciprocal fairness," is a "`touchstone principle of due process'" regarding specific jurisdiction. (Daimler, supra, 571 U.S. at p. ___ [134 S.Ct. at p. 768] (conc. opn. of Sotomayor, J.); id. at p. ___, fn. 10 [134 S.Ct. at p. 758, fn. 10].) It dates back to Internat. Shoe, in which the Supreme Court held, "to the extent that a corporation exercises the privilege of conducting activities within a state, it enjoys the benefits and protection of the laws of that state. The exercise of that privilege may give rise to obligations; and, so far as those obligations arise out of or are connected with the activities within the state, a procedure which requires the corporation to respond to a suit brought to enforce them can, in most instances, hardly be said to be undue." (Internat. Shoe, supra, 326 U.S. at p. 319.) In other words, in analyzing the exercise of specific jurisdiction, "[o]nce it has been decided that a defendant purposely established minimum contacts within the forum State, these contacts may be considered in light of other factors to determine whether the assertion of personal jurisdiction would comport with `fair play and substantial justice.'" (Burger King, supra, 471 U.S. at p. 476.)
That said, the World-Wide Volkswagen court also noted that "[t]he limits imposed on state jurisdiction by the Due Process Clause, in its role as a guarantor against inconvenient litigation, have been substantially relaxed over the years" because of "a fundamental transformation in the American economy." (World-Wide Volkswagen, supra, 444 U.S. at pp. 292-293.) It quoted its view some years before in McGee v. International Life Ins. Co. (1957) 355 U.S. 220 [2 L.Ed.2d 223, 78 S.Ct. 199] (McGee) that there was an increasing nationalization of commerce and amount of business conducted by mail across state lines, and that "`[a]t the same time modern transportation and communication have made it much less burdensome for a party sued to defend himself in a State where he engages in economic activity.'" (World-Wide Volkswagen, at p. 293, quoting McGee, at pp. 222-223.) These historical developments, the court further noted, "have only accelerated in the generation since" McGee was decided. (World-Wide Volkswagen, at p. 293.)
In a case decided a few years after World-Wide Volkswagen, Keeton, supra, 465 U.S. 770, the Supreme Court, again guided by the traditional conception of fair play and substantial justice, found specific jurisdiction existed, even though neither the plaintiff nor the defendant resided in the forum state and most of the plaintiff's injuries occurred elsewhere. In Keeton, the United States Court of Appeals for the First Circuit had upheld a district court's dismissal of the plaintiff's libel suit against Hustler Magazine for lack of personal jurisdiction because New Hampshire's "interest in redressing the tort of libel to petitioner [was] too attenuated for an assertion of personal jurisdiction over respondent." (Keeton, supra, 465 U.S. at p. 773.) The First Circuit also had held that it would have been unfair to apply New Hampshire's uniquely long six-year statute of limitations for libel damages accruing throughout the United States under the "`single publication rule.'" (Ibid.)
Keeton further instructs that the doctrine of specific jurisdiction can apply to the claims of a nonresident against a nonresident. Initially, we acknowledge, as does Keeton, that the clearest case for specific jurisdiction exists when the nonresident defendant's conduct has caused injury to the plaintiff in his or her state of residence, and the plaintiff sues there. That has been understood since Internat. Shoe, supra, 326 U.S. at page 317 ("`[p]resence' in the state ... has never been doubted when the activities of the corporation there have not only been continuous and systematic, but also give rise to the liabilities sued on, even though no consent to be sued or authorization to an agent to accept service of process has been given"). However, even though most cases in which specific jurisdiction has been upheld involved a resident plaintiff, the Supreme Court has not held that due process requires that to be so.
To the contrary, in addition to reiterating the longstanding rule that "[i]n judging minimum contacts, a court properly focuses on `the relationship among the defendant, the forum, and the litigation'" (Keeton, supra, 465 U.S. at p. 775), Keeton makes clear that "[p]laintiff's residence may be the focus of the activities of the defendant out of which the suit arises. [Citations.] But plaintiff's residence in the forum State is not a separate requirement, and lack of residence will not defeat jurisdiction established on the basis of defendant's contacts." (Id. at p. 780; accord, Walden v. Fiore (2014) 571 U.S. ___, ___-___ [188 L.Ed.2d 12, 134 S.Ct. 1115, 1122-1123] (Walden)). As the Supreme Court stated in its latest reiteration of the minimum contacts necessary to establish specific jurisdiction, "[d]ue process requires that a defendant be haled into court in a forum State based on his own affiliation with the State, not based on the `random, fortuitous, or attenuated' contacts he makes by interacting with other persons affiliated with the State." (Walden, at pp. ___-___ [134 S.Ct. at pp. 1122-1123], quoting Burger King, supra, 471 U.S. at p. 475.)
Furthermore, the Supreme Court has not yet further defined the second step of specific jurisdiction analysis, that being what it means for a suit to "arise out of" or "relate" to a defendant's contacts with the state. (See Helicopteros, supra, 466 U.S. at p. 416, fn. 10.) However, California's Supreme Court has provided further guidance on the "relatedness" part of the specific jurisdiction analysis. We turn now to the key cases in which it has done so.
In Vons, supra, 14 Cal.4th 434, our Supreme Court upheld California's specific jurisdiction over two Jack-in-the-Box franchisees located in the State of Washington. Extensive litigation was pending in the San Diego County Superior Court arising from E. coli exposures to Jack-in-the-Box customers around the country. Vons supplied hamburger from a California plant to Foodmaker, Inc., a Delaware corporation with its principal place of business in San Diego, of which Jack-in-the-Box was a division. Foodmaker supplied many items, including hamburger, to its Jack-in-the Box franchisees throughout the United States. Eighty-five franchisees from California and other states, whose customers had not been injured, sued Vons and Foodmaker in
When Foodmaker cross-claimed against Vons in San Diego, Vons filed a cross-complaint against, among others, two Washington corporations who were Jack-in-the-Box franchisees, Seabest Foods, Inc., and Washington Restaurant Management, Inc. The two owned restaurants at which customers were allegedly served contaminated burgers that caused injuries to customers. Vons alleged that the outbreak would not have occurred but for their negligence in handling the meat. It alleged causes of action for negligence, negligent and intentional interference with economic advantage, and indemnity against them. (Vons, supra, 14 Cal.4th at pp. 441-442.)
The court adopted this "substantial connection" test after a careful analysis, including of Internat. Shoe. (E.g., Vons, supra, 14 Cal.4th at p. 474 [quoting Internat. Shoe's statement that an undue burden would not be imposed if a defendant were required to respond to suits regarding obligations that "arise out of or are connected with the activities within the state" (Internat. Shoe, supra, 326 U.S. at p. 319, italics added)].) It noted that the United States Supreme Court had not articulated a precise test for evaluating the "relatedness" requirement.
After analyzing the language in which the high court described the doctrine, the Vons court considered and rejected several tests proffered by the parties. (Vons, supra, 14 Cal.4th at pp. 453-455.) It held that the so-called proximate cause test, is too narrow, the "`but for'" test is too broad and amorphous, and the "substantive relevance test" has an "overly restrictive view of the interest of the state in providing a judicial forum and redress to
Three aspects of Vons are of particular note to the present case. First, the Vons court concluded that a defendant's contacts with the state and their connection to the claim at issue were "inversely related." (Vons, supra, 14 Cal.4th at p. 452.) It stated, "as the high court suggested in International Shoe, supra, 326 U.S. 310, for the purpose of establishing jurisdiction the intensity of forum contacts and the connection of the claim to those contacts are inversely related. (See International Shoe, supra, 326 U.S. at p. 317 ... [`"Presence" in the state ... has never been doubted when the activities of the corporation there have not only been continuous and systematic, but also give rise to the liabilities sued on.... Conversely it has been generally recognized that the casual presence of the corporate agent or even his conduct of single or isolated items of activities ... are not enough to subject it to suit on causes of action unconnected with the activities there.'].)" (Ibid., italics added.) Quoting Cornelison, the Vons court stated, "`[A]s the relationship of the defendant with the state seeking to exercise jurisdiction over him grows more tenuous, the scope of jurisdiction also retracts, and fairness is assured by limiting the circumstances under which the plaintiff can compel him to appear and defend.'" (Vons, supra, 14 Cal.4th at p. 448, quoting Cornelison, supra, 16 Cal.3d at pp. 147-148.)
Second, the Vons court criticized the appellate court for treating the lack of relationships between Vons and the franchisees as "critical in determining whether the claim was sufficiently related to the forum contacts to permit the exercise of specific jurisdiction in California. Contrary to the Court of Appeal's thesis, ... the defendant's forum activities need not be directed at the plaintiff in order to give rise to specific jurisdiction." (Vons, supra, 14 Cal.4th at pp. 457-458, citing Keeton, supra, 465 U.S. 770, 775, Cornelison supra, 16 Cal.3d 143 ["jurisdiction found although the defendant's business activities in California were not directed at the accident victim"], Akro Corp. v. Luker (Fed. Cir. 1995) 45 F.3d 1541, 1547 ["`plaintiff need not be the forum resident toward whom any, much less all, of the defendant's relevant activities were purposefully directed'"] and In re Oil Spill by Amoco Cadiz off the Coast of France on March 16, 1978 (1983) 699 F.2d 909, 917 ["French
Although Vons arose in the context of a franchise relationship not unlike that in Burger King, our Supreme Court has not restricted its view of the relatedness requirement to that type of business or to nonresident franchisees that have agreed to litigate disputes with their franchisor in California. To the contrary, we have found in our own independent research that in Snowney, supra, 35 Cal.4th 1054, the court confirmed and extended its view of what is needed to satisfy the relatedness requirement. There, a group of Nevada hotels was sued by a class of hotel patrons who alleged that they had not
The trial court granted the hotels' motion to quash, but the Second District Court of Appeal reversed. Our Supreme Court took the case and published a superseding opinion agreeing with the appellate court that specific jurisdiction was appropriate over defendants.
Indeed, our Supreme Court has determined this "substantial connection" need not have any relevance to establishing the plaintiff's claim. As we discussed, Cornelison, supra, 16 Cal.3d 143 was relied on by the Vons court in its articulation of this "substantial connection" standard. (Vons, supra, 14
Our Supreme Court determined that "... California, consistent with the due process clause of the United States Constitution, may assert jurisdiction over a nonresident individual whose essentially interstate business has a relationship to this state, but whose allegedly tortious acts occurred outside the state." (Cornelison, supra, 16 Cal.3d at p. 146.) Regarding whether there was a substantial connection between the defendant's contacts with California and the plaintiff's claim, the court relied in part on the fact that the defendant had significant contacts with California, coming into the state twice a month for seven years as a trucker under a California license, and that the accident occurred not far from the California border, while defendant was bound for the state. (Id. at p. 149.) However, what appears to have tipped the balance for the court was the "interstate character of defendant's business." (Id. at p. 151.) The court stated, "Defendant's operation, by its very nature, involves a high degree of interstate mobility and requires extensive multi-state activity. A necessary incident of that business was the foreseeable circumstance of causing injury to persons in distant forums. While the existence of an interstate business is not an independent basis of jurisdiction which, without more, allows a state to assert its jurisdiction, this element is relevant to considerations of fairness and reasonableness. The very nature of defendant's business balances in favor of requiring him to defend here." (Ibid.)
Although BMS's contacts with California that were described by the trial court no longer suffice under Goodyear and Daimler for assertion of general jurisdiction, they remain pertinent and persuasive for the first step of a specific jurisdiction analysis. BMS's extensive, long-standing business activities in California, including in particular its sale of 196 million Plavix pills between 1998 and 2006 and nearly $1 billion worth of Plavix in California between 2006 and 2012, five offices and facilities, hundreds of California-based employees and sales representatives, and longtime maintaining of an in-state agent for service of process bear no resemblance to the "random, fortuitous, or attenuated" interests held to be insufficient in World-Wide
The RPI have also satisfied the "relatedness" test because of the "substantial connection" between BMS's substantial, purposeful activities in California and the RPI claims. It is undisputed on the record before us that, as stated by a BMS representative below via declaration, "BMS' work on the development, manufacture, labeling, and marketing of, and securing regulatory approvals for Plavix was performed or directed from BMS's New York headquarters and/or its New Jersey operating facilities. [¶] ... None of the work to develop Plavix took place in California. Nor has BMS ever manufactured Plavix in California."
Nonetheless, it is also undisputed that BMS has had substantial, continuous contact with California for many years, including regarding the sale of Plavix. The evidence indicates that BMS has "deliberately exploited" the relevant market in the state (Keeton, supra, 465 U.S. at p. 781) for many years, having sold over 196 million Plavix pills in California between 1998 and 2006 and nearly $1 billion worth of Plavix between 2006 and 2012.
Further, plaintiffs allege BMS's Plavix sales in California have led to injuries to California residents that are the same as those suffered by the RPI. At least 84, and perhaps as many as 251, California residents have sued BMS and McKesson in San Francisco because of perceived deficiencies in those pills which have caused such injuries in this state. If BMS is liable to any of the California plaintiffs because of proof which will be common for all plaintiffs, then those elements of each of the RPI's claims may also be established.
Moreover, the interstate character of BMS's business, and in particular its sales of Plavix, is also significant. In magnitudes far greater than was true regarding the relatively modest enterprise of the defendant trucker in Cornelison, a "necessary incident" of BMS's business is "the foreseeable
Also, although the RPI injuries did not occur in the course of BMS's direct delivery of Plavix to the California market, plaintiffs allege, and the record suggests, that BMS sold product to both resident plaintiffs and the RPI as part of the distribution of Plavix in many states. In other words, the injuries are alleged to have occurred in the course of a common effort, another fact that weighs in favor of finding a "substantial connection" between BMS's contacts with California and the RPI's claims.
No California or federal case has been cited to us, and we have found none, in which this type of relationship between a nonresident corporate defendant, its very extensive California contacts, and the plaintiffs' claims has been examined. BMS does not discuss Vons, in its briefing, although the RPI do, and neither side discusses Snowney. Instead, BMS briefly discusses three earlier cases, an appellate court decision, Spirits, Inc. v. Superior Court, supra, 104 Cal.App.3d 918, 926, and two federal court decisions, Glater v. Eli Lilly & Co. (1st Cir. 1984) 744 F.2d 213, 216 and Jones v. North American Aerodynamics, Inc. (D.Me. 1984) 594 F.Supp. 657, 660-662. At oral argument, counsel for BMS highlighted Boaz v. Boyle & Co. (1995) 40 Cal.App.4th 700 [46 Cal.Rptr.2d 888], also briefly discussed in BMS's response to the amici curiae for the RPI. Boaz is inapposite in light of the fact that it was conceded that the alleged injuries of the only California resident plaintiff had nothing to do with the California-related activities of the defendant who challenged jurisdiction, none of the plaintiffs' claims had anything to do with that defendant's contacts with California, and because of the modest nature of the defendant's contacts, which were limited to "targeted mailers to physicians and advertising, principally if not entirely in national medical or medically related publications." (Id. at p. 717.) We do not find any of these cases persuasive regarding the present circumstances and need not discuss them further in light of our Supreme Court's later analyses and holdings in Vons and Snowney.
The reasoning of the United States and California Supreme Court cases we have discussed herein persuades us that BMS's activities are substantially
Further, Vons teaches us that a defendant's contacts with California and their relatedness to the claims at hand are inversely related. (Vons, supra, 14 Cal.4th at p. 453.) In other words, "`[t]he more wide ranging the defendant's forum contacts, the more readily is shown a connection between the forum contacts and the claim.'" (Snowney, supra, 35 Cal.4th at p. 1068, quoting Vons, supra, 14 Cal.4th at p. 455.) Thus, given BMS's substantial, continual contacts with California, including its extensive sales of Plavix here, the presence of dozens (not one or two) of resident plaintiffs who allege precisely the same wrongdoing by BMS and McKesson (also a Cal. resident) as is alleged by the RPI, as well as the interstate nature of BMS's business and its nationwide sales of Plavix are even more significant in determining whether the RPI's claims are sufficiently connected to BMS's California activity so that assertion of specific jurisdiction satisfies the traditional conception of fair play and substantial justice.
At oral argument, counsel for BMS suggested that finding specific jurisdiction appropriate in this case based on the similarity between the resident plaintiffs' and the RPI's claims would permit "joinder to trump due process." This is not so. The identical nature of these claims is only one of a number of factors we have considered here. Further, it would be inappropriate to ignore so prominent an aspect of the matter before us as BMS asks us to do. As we have discussed, our own Supreme Court has noted that "the United States Supreme Court has rejected the use of `talismanic jurisdictional formulas' (Burger King, supra, 471 U.S. at p. 485 ...)..." and instructed that "`"the facts of each case must [always] be weighed" in determining whether personal jurisdiction would comport with "fair play and substantial justice."'" (Vons, supra, 14 Cal.4th at p. 460.) Therefore, we decline to ignore the existence of the resident plaintiffs' claims in our relatedness analysis.
Having determined that the RPI have met their initial burden of demonstrating facts justifying the exercise of specific jurisdiction (Snowney, supra, 35 Cal.4th at p. 1062), we now turn to BMS's burden, which is to demonstrate "`"that the exercise of jurisdiction would be unreasonable."'" (Ibid.; see Burger King, supra, 471 U.S. at p. 477 ["where a defendant who purposefully has directed his activities at forum residents seeks to defeat jurisdiction, he must present a compelling case that the presence of some other considerations would render jurisdiction unreasonable"].)
Although BMS did not concede that it cannot satisfy this burden, neither has it made any effort to show why it should not be required to defend here, other than to argue that the RPI's claims are not sufficiently related to BMS's contacts with California. Nonetheless, we examine each of the factors and conclude BMS has not met its burden.
BMS has provided no evidence that it would be unduly burdened if required to defend the RPI claims here. Nor could it. BMS may incur a substantial burden in defending the claims of the dozens, if not hundreds of California residents here. But whatever that burden proves to be, it will be incurred whether or not the RPI are allowed to bring their claims here as well.
While some additional burden may be attributed to defending the RPI's claims in addition to those of the California residents, BMS has made no effort to show what that burden would be, much less that it would be undue.
To be sure, substantial pretrial preparation and discovery will be required in all of these cases. But the depositions of plaintiffs' prescribing and treating physicians, and of plaintiffs, will likely be taken in their states of residence regardless of where the RPI's claims are pursued. The discovery of BMS's key witnesses and documents will likely take place in New York and New Jersey, where those witnesses and key documents are likely located, regardless of where the RPI's claims are filed. BMS has not shown that any of these expenses will be greater if the cases proceed here.
Nor has BMS shown that the burden of having its counsel appear in San Francisco for case management conferences and hearings on motions will be any greater than would be the burden of appearing throughout the country. While it may be less costly for counsel to travel to some parts of the country than to fly to San Francisco, because of the California residents' claims counsel will be coming here anyway and can coordinate any RPI-specific motion with other California activity.
Should plaintiffs' claims survive BMS's likely motions for summary judgment and should it prove necessary for one or more of these cases to be tried in order for the parties to agree upon a range of values upon which the
BMS has summarily argued that it would be prejudiced by not being able to bring witnesses to San Francisco for trial, such as plaintiffs' treating physicians and other experts. That argument ignores the teachings of McGee and Burger King that the inquiry into fairness must take into account modern developments in commerce, transportation, and indeed, the manner in which litigation is conducted. Excellent quality video depositions of trial witnesses, including parties and experts, are now the norm, not the exception, in high stakes litigation such as this. Indeed, our Civil Discovery Act (§ 2016.010 et seq.) has specific provisions for the taking of depositions outside California and for their use at trial.
In short, BMS has not demonstrated meaningful, much less undue, burden.
As we discussed above, the paradigm case for the application of specific jurisdiction is when the out-of-state defendant causes injury to the plaintiff in his or her home state and the suit is brought there. That is because the state has a "`manifest interest' in providing its residents with a convenient forum for redressing injuries inflicted by out-of-state actors" (Burger King, supra, 471 U.S. at p. 473), as well as a special interest in deterring wrongful conduct within its boundaries. (See, e.g., Keeton, supra, 465 U.S. at p. 776.) Because the RPI are not California residents and were not injured here, those state interests are diminished with respect to them.
But those state interests apply with full force to the dozens, if not hundreds, of California plaintiffs who are part of this suit. BMS would have us analyze its motion to quash as if those California plaintiffs play no role in the reasonableness analysis. They would also have us ignore the presence in this suit of codefendant McKesson, which is based in San Francisco and which distributes Plavix for BMS. This is wrong.
Plaintiffs' counsel in this matter hale from New York, California and Washington, D.C. They have decided to bring these actions in California, they say, because a plurality of the plaintiffs in the original group of 659 are California residents. Further, they argue, but without providing competent evidence, California provides a forum in which they can sue both BMS and McKesson in the same case or cases. Be that as it may, plainly plaintiffs' position is that the San Francisco Superior Court provides a convenient and effective forum. Given this assertion, we see no reason why they should not be allowed to proceed here, absent a jurisdictional or other compelling reason to the contrary. BMS has not provided one.
BMS has made no attempt to demonstrate that judicial economy would not be served by allowing these cases to go forward here. Nor could it. While there will undoubtedly be an incremental burden on the superior court in managing the RPI cases along with those of the California resident plaintiffs, that burden pales in comparison with requiring judges in 33 states all to become involved in the discovery, motion, and trial practice that may be necessary to resolve these cases. Indeed, it pales in comparison with the incremental burden of asking the trial court just to coordinate its cases with those in multiple other jurisdictions so that, for example, the same discovery issues are not litigated and relitigated time and again, such as because of protective orders regarding confidentiality adopted at BMS's request.
The RPI mention, but make no effort to develop, an argument pertaining to "pendent personal jurisdiction." Amici curiae for the RPI, Consumer Attorneys of California and American Association for Justice, develop that theory through discussion of such cases as Action Embroidery Corp. v. Atlantic Embroidery, Inc. (9th Cir. 2004) 368 F.3d 1174 (Action Embroidery). A review of those cases makes clear that "pendent personal jurisdiction" is a federal common law doctrine developed to permit jurisdiction over nonresident defendants with respect to state law claims brought under the federal courts' discretionary supplemental jurisdiction. It was developed because some federal law claims, such as violations of the federal antitrust laws, may be brought in any federal district court (subject to venue considerations). However, related state law claims "aris[ing] out of the same nucleus of operative facts" require a showing of appropriate personal jurisdiction under the laws of the state where such state law claims were brought. To avoid piecemeal litigation of claims brought by the same plaintiff against the same defendant, this doctrine was developed.
For the foregoing reasons, the trial court properly denied BMS's motion to quash service of the summons regarding the RPI complaints. The order to show cause is DISCHARGED. The petition is denied.
Kline, P. J., and Richman, J., concurred.
