This week the Supreme Court issued a new opinion in a case that involved the scope of personal jurisdiction in a nationwide mass action brought in a state court. Although it is not entirely clear the extent to which this decision may apply in a class action or in a case brought in federal court, defendants may be able to use this case to argue that nationwide or multistate class actions cannot proceed in a jurisdiction where the defendants are not subject to general jurisdiction (typically that is where they are headquartered and/or incorporated). The case also highlights for large corporations the importance of locating their headquarters and incorporating in a jurisdiction or jurisdictions where the judicial climate is potentially more favorable to them.

Bristol-Myers Squibb Co. v. Superior Court is a mass action brought by more than 600 plaintiffs in a California state court. The plaintiffs, most of whom were not California residents, asserted claims for personal injuries allegedly caused by Plavix, a Bristol-Myers Squibb drug. The drug was developed and manufactured in New York and New Jersey, and was sold and marketed nationwide. The non-California residents could not demonstrate that they sustained any harm in California. Given that Bristol-Myers was not subject to general jurisdiction in California (it is incorporated in Delaware and headquartered in New York), the issue was whether the California court had specific jurisdiction over the non-California residents’ claims. Specific jurisdiction, as the Court explained, depends on whether the claims alleged arose out of the defendant’s contacts with California.

In an 8-1 decision by Justice Alito, the Court held that there was no specific jurisdiction with respect to the non-California residents’ claims in the California state court because “[w]hat is needed – and what is missing here—is a connection between the forum and the specific claims at issue.” (Slip op. at 8.) Merely because other plaintiffs were injured in California was not enough for the California court to have jurisdiction over the nonresidents’ claims, where “the nonresidents’ claims involve no harm in California and no harm to California residents.” (Id. at 8-9.) The Court noted that plaintiffs seeking to bring a mass action could bring it in a state where the defendant is subject to general jurisdiction, and that there remains an open question as to whether it is constitutional for a federal court to exercise personal jurisdiction based on contacts with the nation as a whole rather than a specific state. The due process clause of the Fifth Amendment, rather than the Fourteenth Amendment, would govern the issue in the federal courts. Federal courts, however, have long evaluated these jurisdictional issues in essentially the same manner as if they were a state court in the jurisdiction in which they sit.

Justice Sotomayor’s dissent described the majority’s opinion as “holding that a corporation that engages in a nationwide course of conduct cannot be held accountable in a state court by a group of injured people unless all of those people were injured in the forum State.” (Slip op., Sotomayor, J., dissenting, at 1.) That is the rule that I would expect to see defendants advocating based on the majority’s opinion. Justice Sotomayor believed it was sufficient under Supreme Court precedent that the claims of the California residents and nonresidents arose out of the essentially the same acts by the defendant. She was concerned about situations where, because of the need to sue multiple defendants, or a defendant headquartered and incorporated outside of the U.S., there may be no state where all defendants would be subject to personal jurisdiction. In a footnote, she suggested that the Court’s opinion might not apply to a class action if absent class members were not treated as parties for purposes of personal jurisdiction.

I expect defendants will use Bristol-Myers Squibb to seek to reduce the breadth of nationwide or multistate putative class actions and certified class actions brought in jurisdictions in which the defendants are not headquartered or incorporated.  And if the named plaintiff is not a resident of the state where the suit is brought that may be a basis for dismissal of the case in its entirety.

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Photo of Wystan Ackerman Wystan Ackerman

I am a partner at the law firm of Robinson+Cole in Hartford, Connecticut, USA.  My contact information is on the contact page of my blog.  I really enjoy receiving questions, comments, suggestions and even criticism from readers.  So please e-mail me if you…

I am a partner at the law firm of Robinson+Cole in Hartford, Connecticut, USA.  My contact information is on the contact page of my blog.  I really enjoy receiving questions, comments, suggestions and even criticism from readers.  So please e-mail me if you have something to say.  For those looking for my detailed law firm bio, click here.  If you want a more light-hearted and hopefully more interesting summary, read on:

People often ask about my unusual first name, Wystan.  It’s pronounced WISS-ten.  It’s not Winston.  There is no “n” in the middle.  It comes from my father’s favorite poet, W.H. (Wystan Hugh) Auden.  I’ve grown to like the fact that because my name is unusual people tend to remember it better, even if they don’t pronounce it right (and there is no need for anyone to use my last name because I’m always the only Wystan).

I grew up in Deep River, Connecticut, a small town on the west side of the Connecticut River in the south central part of the state.  I’ve always had strong interests in history, politics and baseball.  My heroes growing up were Abraham Lincoln and Wade Boggs (at that time the third baseman for the Boston Red Sox).  I think it was my early fascination with Lincoln that drove me to practice law.  I went to high school at The Williams School in New London, Connecticut, where I edited the school newspaper, played baseball, and was primarily responsible for the installation of a flag pole near the school entrance (it seemed like every other school had one but until my class raised the money and bought one at my urging, Williams had no flag pole).  As a high school senior, my interest in history and politics led me to score high enough on a test of those subjects to be chosen as one of Connecticut’s two delegates to the U.S. Senate Youth Program, which further solidified my interest in law and government.  One of my mentors at Williams was of the view that there were far too many lawyers and I should find something more useful to do, but if I really had to be a lawyer there was always room for one more.  I eventually decided to be that “one more.”  I went on to Bowdoin College, where I wrote for the Bowdoin Orient and majored in government, but took a lot of math classes because I found college math interesting and challenging.  I then went to Columbia Law School, where I was lucky enough to be selected as one of the minions who spent their time fastidiously cite-checking and Blue booking hundred-plus-page articles in the Columbia Law Review.  I also interned in the chambers of then-Judge Sonia Sotomayor when she was a relatively new judge on the Second Circuit, my only connection to someone who now has one-ninth of the last word on what constitutes the law of our land.  I graduated from Columbia in 2001, then worked at Skadden Arps in Boston before returning to Connecticut and joining Robinson+Cole, one of the largest Connecticut-based law firms.  At the end of 2008, I was elected a partner at Robinson+Cole.

I’ve worked on class actions since the start of my career at Skadden.  Being in the insurance capital of Hartford, we have a national insurance litigation practice and I was fortunate to have the opportunity to work on some prominent class actions arising from the 2004 hurricanes in Florida and later Hurricane Katrina, including cases involving the applicability of the flood exclusion, statutes known as valued policy laws, and various other issues.  My interest and experience in class actions gradually led me to focus on that area.

In Connecticut courts I’ve defended various kinds of class actions that go beyond insurance, including cases involving products liability, securities, financial services and consumer contracts.

My insurance class action practice usually takes me outside of Connecticut.  I’ve had the pleasure of working on cases in various federal and state courts and collaborating with great lawyers across the country.  While class actions are an increasingly large part of my practice, I don’t do exclusively class action work.  The rest of my practice involves litigating insurance coverage cases, often at the appellate level.  That also frequently takes me outside of Connecticut.  A highlight of my career thus far was working on Standard Fire Ins. Co. v. Knowles, the U.S. Supreme Court’s first Class Action Fairness Act case.  I was Counsel of Record for Standard Fire on the cert petition, and had the pleasure of working with Ted Boutrous on the merits briefing and oral argument.

I started this blog because writing is one of my favorite things to do and I enjoy following developments in class action law, writing about them and engaging in discussion with others who have an in interest in this area.  It’s a welcome break from day-to-day practice, keeps me current, broadens my network and results in some new business.

When I’m not at my desk or flying around the country trying to save insurance companies from the plaintiffs’ bar, or attending a conference on class actions or insurance litigation (for more on those, see the Seminars/Programs page of this blog), I often can be found playing or reading with my young daughter, helping my wife with her real estate and mortgage businesses, reading a book about history or politics, or watching the Boston Red Sox (I managed to find bleacher seats for Game 2 of the 2004 World Series when Curt Schilling pitched with the bloody sock).  When the weather is good I also love to take the ferry to Block Island, Rhode Island and ride a bike or walk the trails there. If you go, I highly recommend the Clay Head Trail.