SCOTUS Decision in Plavix Litigation Could Lead to a Resurgence in New Jersey Mass Tort Filings

Posted in Defective Drugs, Plavix

New Jersey was once one of the premiere venues for Mass Tort filings (now termed Multicounty Litigations in New Jersey). One of the reasons for this was the obvious fact that many large pharmaceutical companies maintain their principal place of business in New Jersey, making it very difficult for those pharmaceutical companies to remove cases brought against them in New Jersey Superior Court to federal District Court, due to the “forum defendant” rule (28 U.S.C. § 1441(b)(2)). Perhaps a more significant reason was the makeup of the New Jersey Superior Court’s Mass Tort bench at a time when nationally recognized jurists, such as the late Judge Carol E. Higbee, were on the cutting edge of high-stakes pharmaceutical litigation, like the seminal Vioxx cases.

That early enthusiasm for filing Mass Tort claims in New Jersey Superior Court cooled with the appointment of Judge Higbee to the Appellate Division. Even though Judge Higbee was only one of three well-respected Superior Court judges designated to preside over New Jersey’s non-asbestos Multicounty Litigations, her loss, and the details surrounding her appointment to the Appellate Division, were interpreted by many as marked departure from New Jersey’s role as a leader in Mass Tort litigation. Moreover, Judge Higbee’s replacement, Nelson C. Johnson, would soon gain notoriety for various rulings that were deemed to be adverse to hundreds of plaintiffs in ongoing Multicounty Litigations, notably the talc and Accutane litigations.

Whether the recent view of New Jersey Superior Court as an unfriendly plaintiff venue is fair or not, the trend of avoiding filing claims in New Jersey in favor of venues considered much more friendly to plaintiffs, such as St. Louis and Philadelphia, has likely come to an end with the United States Supreme Court’s decision in Bristol-Myers Squibb Co. v. Superior Court Of California, San Francisco County, et al.

In the Bristol-Myers case, a group of plaintiffs sued Bristol-Myers Squibb Company (BMS) in California state court, asserting claims based on injuries allegedly caused by a BMS drug called Plavix. Of the more than 600 plaintiffs, 86 are California residents and 592 are residents of 33 other states. The complaints asserted claims under California law, including products liability, negligent misrepresentation, and misleading advertising. BMS is incorporated in Delaware and headquartered in New York. It maintains substantial operations in New York and New Jersey, and engages in business activities and sells Plavix in California. The nonresident plaintiffs did not allege that they obtained Plavix from a California source, that they were injured by Plavix in California, or that they were treated for their injuries in California. The California Supreme Court ultimately held that the California courts have specific jurisdiction over the non-resident plaintiffs. Applying a “sliding scale approach” the California Supreme Court found that BMS’s wide-ranging contacts with the state permitted the exercise of specific jurisdiction, noting that the nonresident plaintiffs’ claims are based on the same allegedly defective product, misleading marketing, and promotion of Plavix. This, the court found, supported a finding of specific jurisdiction over the claims brought by the non-resident plaintiffs.

The United States Supreme Court granted certiorari on the question whether the California courts’ exercise of jurisdiction violates the Due Process Clause of the Fourteenth Amendment. The Supreme Court reversed, finding California courts lack specific jurisdiction to consider the nonresidents’ claims. In order for a state court to exercise specific jurisdiction, the suit must arise out of or relate to the defendant’s contacts with the forum. The Court found that when there is no such connection, specific jurisdiction is lacking regardless of the extent of a defendant’s unconnected activities in the state.

The Court found that the California Supreme Court’s sliding scale approach is “difficult to square” with existing specific jurisdiction precedent. Under the sliding scale approach, the connection between the forum and the specific claims at issue would be relaxed if the defendant has extensive unrelated forum contacts. The Court held that to exercise specific jurisdiction, a defendant’s general connections with the forum are not enough. The Court stated that the California Supreme Court found the California courts have specific jurisdiction over BMS without identifying any adequate link between the state and the nonresidents’ claims. The nonresidents “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 Court held that the fact that the resident plaintiffs were prescribed, obtained, and ingested Plavix in California does not allow the state to assert specific jurisdiction over the nonresidents’ claims, notwithstanding that the nonresidents allegedly sustained the same injuries as the residents. Nor does the fact that BMS contracted with a California distributor suffice to establish personal jurisdiction. The Court concluded that: “What is missing here—is a connection between the forum and the specific claims at issue.”

Significantly, shortly after the Supreme Court ruling, a St. Louis judge declared a mistrial in a Missouri state court case in which a Missouri plaintiff and two out-of-state plaintiffs sued Johnson & Johnson, claiming its talcum powder caused ovarian cancer. Johnson & Johnson is based in New Jersey, and the talc Multidistrict Litigation happens to be in the United States District Court for District of New Jersey. Naturally, it should be expected that many of the Mass Tort claims that have now been determined to lack specific jurisdiction in various venues across the country, will now necessarily have to be filed in New Jersey Superior Court, both in the instances where there is no Multidistrict Litigation, as well as those where plaintiffs wish to maintain a state action parallel to a Multidistrict Litigation.

Fortunately, there is an argument to be made that not only necessity will compel these filings in New Jersey Superior Court. Despite essentially a handful of debatably over-publicized rulings and changes in the judiciary, New Jersey still maintains choice of law and evidentiary standards relatively favorable to plaintiffs – the same laws and standards that lead to the resolution of Vioxx and many other pharmaceutical Mass Tort litigations. The New Jersey Superior Court also still maintains the expertise and resources to move large numbers of complex claims. Thus, while the United States Supreme Court’s ruling might have the effect of dragging Mass Tort plaintiffs kicking and screaming back to New Jersey Superior Court, in the end those plaintiffs might ultimately be glad that they returned.