The U.S. Supreme Court handed down a decision on June 19 that may change the landscape for mass tort/class action lawsuits and not in a way favorable to injured plaintiffs.
The U.S. Supreme Court handed down a decision on June 19 that may change the landscape for mass tort/class action lawsuits and not in a way favorable to injured plaintiffs. The case heard by the SCOTUS involved Bristol-Myers Squibb (BMS) and the company’s Plavix blood thinner. Specifically, the Court reviewed the California Supreme Court’s decision granting out-of-state plaintiffs standing to join the lawsuit filed by California residents.
The California high court’s decision was reversed by SCOTUS in an 8-1 decision, with Justice Samuel Alito, Jr. writing the majority opinion. In short, the justices decided that the 592 non-resident plaintiffs (from 33 states) did not have standing to sue in California because they neither purchased, nor ingested Plavix in California and New York-based BMS didn’t make Plavix in California. Therefore, according to SCOTUS, California courts could not exercise jurisdiction over these claims. Of the 678 individual claims alleging that BMS didn’t accurately represent the risks that Plavix could cause heart attacks and strokes, only 86 remain. These are the cases filed in California by California residents. The other 592 cases were dismissed and plaintiffs will have to file in either New York or their home states.
In order for a court to exercise specific jurisdiction over a defendant, that defendant must have a certain level of contact with the forum state, in this case, California. As Justice Alito wrote, “The non-residents were not prescribed Plavix in California, did not purchase Plavix in California, did not ingest Plavix in California, and were not injured by Plavix in California. The mere fact that other plaintiffs were prescribed, obtained, and ingested Plavix in California — and allegedly sustained the same injuries as did the non-residents — does not allow the state to assert specific jurisdiction over the nonresidents’ claims.”
The dissenting opinion was penned by Justice Sonia Sotomayor. In it, she wrote, “The majority’s rule will make it difficult to aggregate the claims of plaintiffs across the country whose claims may be worth little alone. It will make it impossible to bring a nationwide mass action in state court against defendants who are ‘at home’ in different States. And it will result in piecemeal litigation and the bifurcation of claims. None of this is necessary.”
According to BMS and the SCOTUS majority (and likely supported by proponents of tort “reform”), it is necessary. Reformers have long had an issue with what is known as “forum shopping,” a practice in which plaintiffs search for venues known or believed to be more plaintiff friendly. As an example, James Beck, Senior Life Sciences Policy Analyst at Reed Smith in Philadelphia (and not a fan of the BMS decision), wrote that close to 95% of mass tort suits filed in Philadelphia are filed by out-of-state plaintiffs because it’s believed to be a more plaintiff-friendly venue.
The SCOTUS decision in Plavix could spell the end of this practice, unless the companies were actually based in Pennsylvania.
Justice Sotomayor is not alone in her opinion in general, even being the sole dissenting voice on the SCOTUS.
On its face, one may not think that an end to “forum shopping” is a bad thing. In fact, it seems like it would be an improvement to the system. However, the potential limitations that the BMS decision puts on plaintiffs could mean that they go from a plaintiff-friendly venue to no venue at all. Or, almost as bad, it could mean the mid-ground of multiple venues for individual plaintiffs.
According to Robert Peck of the Center for Constitutional Litigation, the BMS decision could “make it very difficult for plaintiffs to band together to pull their resources to bring a single action.” In addition, in cases with more than one defendant (such as BMS – the other defendant corporation was Plavix’ distributor, McKesson), plaintiffs would have to file suit in multiple venues. In the BMS example, that would be BMS’ home state and McKesson’s home state.
Filing suit in multiple venues can quickly become very expensive. So much so, in fact, that some plaintiffs may not be able to afford to seek justice at all. It also muddies the waters by making it even easier for the defendant corporations to attempt to shift blame to each other. Add to that the fact that mass torts would be broken into smaller, jurisdiction-specific chunks.
The latter has two potentially negative effects, one of which is contradictory results depending on the jurisdiction. It would be possible for a Pennsylvania state court, for example, to come to a different conclusion on liability than that of a Texas state court. These differences could only be resolved on appeal and then only if the contradictory courts were in the same appellate circuit. If not, then seeking the SCOTUS’ help is the only option left, and given the limited number of cases granted certiorari (acceptance of a case for review), that doesn’t seem to be a great option.
The other potentially negative effect is limited access to justice for injured plaintiffs. Mass tort cases/class actions are large, complex and expensive to manage. The BMS decision doesn’t mean that the smaller jurisdiction-specific mass torts will become less expensive, however. What it does mean is that these cases may become less likely to be accepted by law firms due to the potential reduction in fees brought on by the smaller number of plaintiffs involved.
According to Mr. Peck, Justice Alito and the SCOTUS majority stood for “greater concern for the burden on corporation[s]” than for injured out-of-state plaintiffs.
As with many precedent-setting decisions, not every possible question was answered in the BMS decision. Supreme Court lawyer, Andrew Pincus, of Mayer Brown said that BMS leaves “two big questions” unanswered.
“How much of a connection does there have to be between the claim and the place the lawsuit is filed? Secondly, will [the BMS] ruling mean that class actions will only be filed in a court that can assert jurisdiction over every single class member?”
An additional question left by the BMS decision is brought up by Mayer Brown’s Andrew J. Pincus, Archis A. Parasharami and Matt Waring. That question is “whether the Fifth Amendment’s due process requirement might apply differently to exercises of jurisdiction by federal courts. But this issue does not arise frequently. For the Fifth Amendment to apply, Congress must provide for expansive personal jurisdiction by authorizing nationwide service of process in a particular statute—and Congress rarely does this, as the Court explained in the BNSF decision last month in rejecting the argument that the federal statute there (the Federal Employers’ Liability Act) expanded federal courts’ power to exercise personal jurisdiction.”
Only time will tell as to how the BMS decision will truly change the mass tort landscape.