Post-BMS Personal Jurisdiction Cheat Sheet

In the wake of the defense wins during the last Supreme Court term in Bristol-Myers Squibb Co. v. Superior Court, 137 S.Ct. 1773 (2017) ("BMS"), and BNSF Ry. Co. v. Tyrell, 137 S. Ct. 1549 (2017), we're retiring the personal jurisdiction cheat sheet we had been maintaining for the last three-plus years since Daimler AG v. Bauman, 134 S.Ct. 746 (2014) ("Bauman"). That cheat sheet, as our readers know, had covered general jurisdiction cases generally - all areas, not just prescription medical product liability, or product liability generally. That was a big undertaking, but we did it because litigation tourism was, and remains, a huge issue for our clients. Now we think that, between them, BMS, BNSF, and Bauman have now settled the larger general jurisdiction point.

So we think we can be more focused going forward in our ongoing monitoring of personal jurisdiction cases. So we're creating a new cheat sheet devoted to a couple of specific lingering issues. The first of these issues is the so-called (at least by us) "jurisdiction by consent" theory - that general personal jurisdiction is created in a state when a corporation registers to do business/appoints an agent for service of process in a state. Since all states have such registration statutes, recognition of that theory would do what the United States Supreme Court has now held multiple times that Due Process prohibits - allowing a corporation to be sued in many jurisdictions where it is not "at home" by anybody, in particular out-of state litigation tourists. Not surprisingly, since Bauman most courts have rejected this theory (as the cases below demonstrate) as incompatible with Due Process, but since the Supreme Court has not put a stake through itself, plaintiffs still raise it relatively frequently.

Almost all of the older - that is to say, pre-BMS − decisions in this new cheat sheet address jurisdiction by consent theories. We were keeping specific track of jurisdiction by consent cases in our original cheat sheet, so we've pulled out those cases and compiled them here.

Another reason for keeping track of jurisdiction by consent cases is that we litigate a lot in Pennsylvania, and we expect Pennsylvania to be Ground Zero for the battle over this theory. An unfortunate combination - Pennsylvania's unique registration statute (42 Pa. C.S.A. §5301) that actually specifies "general" jurisdiction, and adverse pre-Bauman Third Circuit precedent interpreting Pennsylvania law (Bane v. Netlink, Inc., 925 F.2d 637, 640-41 (3d Cir. 1991)) - have led some Pennsylvania courts to ignore constitutional Due Process as interpreted by BMS and Bauman and hold mandatory registration to do business in Pennsylvania somehow to equate with "consent" to general jurisdiction. E.g., Plumbers' Local Union No. 690 Health Plan v. Apotex Corp., 2017 WL 3129147, at *11 (E.D. Pa. July 24, 2017); Hegna v. Smitty's Supply, Inc., 2017 WL 2563231, at *3-4 (E.D. Pa. June 13, 2017); Bors v. Johnson & Johnson, 208 F. Supp.3d 648, 653-55 (E.D. Pa. 2016).

Surely, most Pennsylvania lawyers and judges learned in law school like we did that a state statute can't override federal constitutional Due Process guarantees, but the litigation tourism industry in Pennsylvania is entrenched and well-funded. Given that that most of plaintiffs' other favorite jurisdictions: California, Illinois, Missouri, and New Jersey, to name a few (see below for details), do not recognize jurisdiction by consent as a matter of state law, we expect to have a ring-side seat as the consent issue is eventually appealed, perhaps interlocutorily, from some Pennsylvania court all the way to the United States Supreme Court if necessary.

The second jurisdictional theory we'll be keeping track of in this cheat sheet is what we call "BMS-lite." This is a litigation tourist's last gasp in jurisdictions, such as those listed below, that have already rejected jurisdiction by consent. BMS-lite is the variant of specific jurisdiction based on corporate activities related, not to any plaintiff's case, but to the product in general, that plaintiffs will argue somehow "caused" their injuries in a broad sense and thus justifies opening the courthouse doors in multiple states to litigation tourists. We discussed an early example of that recently, and the theory's most notable exemplar, M.M. v. GlaxoSmithKline LLC, 61 N.E.3d 1026 (Ill. App. 2016), is currently pending on certiorari before the Supreme Court. See GlaxoSmithKline LLC v. M.M., No. 16-1171 (U.S. filed March 23, 2017). M.M. (and the post-BMS case we discussed) predicated "specific" jurisdiction on the very non-specific fact that some of the drug's clinical trials (17 of 361) included in-state investigators. And, as the certiorari petition states, only "three percent of the study sites in those 17 trials were in [the state], involving a mere two percent of the study participants." Petition at 9. This petition has been distributed for the Supreme Court's 9/25/17 conference, so M.M could be vacated or reversed sometime this fall.

The type of facts that M.M. seized upon to preserve Illinois' litigation tourism business don't involve the plaintiffs, so "a defendant's relationship with a third party, standing alone, is an insufficient basis for jurisdiction." BMS, 137 S. Ct. at 1781 (citation and quotation marks omitted). Short of a major causal tie - such as the product being manufactured in the forum state in a manufacturing defect case - we don't think BMS-lite theories are of any greater constitutional validity than what was rejected in BMS itself, so we'll also be collecting favorable cases that make such holdings. But so far, given how recent BMS is, we haven't seen any favorable cases. We expect them to be coming.

As always, with cheat sheets, we don't do the other side's research for them, so we won't be including any bad cases.

With all this in mind, here is our Post-BMS Personal Jurisdiction Cheat Sheet:

Byham v. Nationall Cibo House Corp., 143 S.E.2d 225 (N.C. 1965) (North Carolina) (non-product liability). Denial of motion to dismiss affirmed on specific jurisdiction grounds. The casual presence of an agent for service of process is not enough to subject a corporation to suit on causes of action unconnected with the activities within the state. Ratliff v. Cooper Laboratories, Inc., 444 F.2d 745 (4th Cir. June 29, 1971) (South Carolina) (prescription medical product liability). Denial of motion to dismiss reversed. Application to do business and the appointment of an agent for service does not establish general personal jurisdiction. In re Mid-Atlantic Toyota Antitrust Litigation, 525 F. Supp. 1265 (D. Md. Oct. 14, 1981) (West Virginia) (non-product liability). Motion to dismiss granted. Registration to do business is not consent to general personal jurisdiction. Modified on other grounds, 541 F. Supp. 62; affirmed on other grounds, 704 F.2d 125. Pearrow v. National Life & Accident Insurance Co., 703 F.2d 1067, 1069 (8th Cir. 1983) (Arkansas) (non-product liability). Grant of motion to dismiss affirmed. Appointment of an agent for service of process does not create general personal jurisdiction. Gray Line Tours v. Reynolds Electrical & Engineering Co., 238 Cal. Rptr. 419, 421 (Cal. App. June 5. 1987) (California) (non-product liability). Grant of motion to dismiss affirmed. Designation of an agent for service of process and qualification to do business in California alone was not consent to general jurisdiction. Goodyear Tire & Rubber Co. v. Ruby, 540 A.2d 482 (Md. 1988) (Maryland) (non-product liability). Denial of motion to dismiss reversed. Agent for service of process insufficient to permit general jurisdiction. Sandstrom v. ChemLawn Corp., 904 F.2d 83 (1st Cir. May 17, 1990) (Maine) (product liability - non drug/device). Grant of motion to dismiss affirmed. Corporation that was licensed to do business in forum and had appointed agent for service of process did not consent to general personal jurisdiction. Wilson v. Humphreys (Cayman) Ltd., 916 F.2d 1239 (7th Cir. Oct. 24, 1990) (Indiana) (non-product liability). Denial of...

To continue reading

Request your trial

VLEX uses login cookies to provide you with a better browsing experience. If you click on 'Accept' or continue browsing this site we consider that you accept our cookie policy. ACCEPT