Johnson & Johnson Cases Specific Jurisdiction as to Non-Resident Plaintiffs on a Relatedness Standard

Benjamin Ford

JOHNSON & JOHNSON CASES SPECIFIC JURISDICTION AS TO NON-RESIDENT PLAINTIFFS ON A RELATEDNESS STANDARD

Last spring, a St. Louis jury handed out verdicts for Gloria Ristesund and Jacqueline Fox against Johnson & Johnson for $55 and 72 million, respectively.[1] The plaintiffs were members of the same lawsuit and suffered from ovarian cancer which they claimed was due to Johnson & Johnson’s talcum powder based baby powder. Of the members of the lawsuit, many were neither Missouri citizens nor alleged any use of the products in Missouri. In fact, Ristesund and Fox were, respectively, from South Dakota and Alabama. Johnson & Johnson appealed the judgment arguing that a Missouri court lacked personal jurisdiction as to the non-resident plaintiffs.

Personal jurisdiction arises out of issues of federalism, state sovereignty, and the due process rights of defendants. Ultimately, personal jurisdiction concerns whether a state can constitutionally enter judgment against a defendant. In order to establish jurisdiction, there must exist sufficient minimum contacts by the defendant such that the exercise of jurisdiction will not offend traditional notions of fair play and substantial justice.[2] Focusing the inquiry on defendants’ contacts allows defendants to “structure their primary conduct with some minimum assurance as to where that conduct will and will not render them liable to suit.”[3] Courts have established two types of personal jurisdiction: general and specific.[4] A court can exercise general jurisdiction when the defendant is “at home”[5] in the forum state, and can exercise specific jurisdiction when (1) the defendant has purposely directed his action toward the forum state,[6] (2) the action arises out of or is related to the defendant’s contact with the forum state,[7] and (3) the exercise of jurisdiction is reasonable and does not offend traditional notions of fair play and substantial justice.[8]

For years, courts struggled to define the scope of general jurisdiction especially as to corporations. Defining the essential test of general jurisdiction, Goodyear Dunlop Tires Operations, S.A. v. Brown held that general jurisdiction exists when a defendant’s “affiliations with the State are so ‘continuous and systematic’ as to render [the defendant] essentially at home in the forum state.”[9] However, what level of corporate activity meets Goodyear’s standard remained unsettled for years. The lack of clarity was particularly unnerving for corporations who could not predict where they might be subject to countless claims. While providing less comfort to corporate defendants, this confusion acted as a useful tool for forum-shopping plaintiffs.

The general jurisdiction confusion came to a stark end when the Supreme Court in Daimler AG v. Baumann held that a corporation is “at home” where it has its principal place of business and place of incorporation.[10] In doing so, Daimler both revived personal jurisdiction’s component that defendants have some predictability in where they might be subject to suit while effectively eliminating general jurisdiction as a plaintiff’s key to lucrative forums. In response, plaintiffs have changed tactics and begun to establish suits with specific jurisdiction. A common tactic has involved establishing specific jurisdiction over a defendant in a suit involving one or more plaintiffs from the desired forum state and then joining non-resident plaintiffs to the action. It is this new plaintiff tactic that has come at issue in the Johnson & Johnson suits.

Addressing this tactic in a recent opinion, the California Supreme Court held in Bristol-Myers Squibb v. Superior Court that personal jurisdiction does exist as to the non-resident plaintiffs.[11] The plaintiffs in Bristol-Myers were all users of the prescription drug Plavix, meant to prevent blood clotting.[12] After suffering numerous side effects, plaintiffs brought suit against Bristol-Myers Squibb.[13] Because the majority of plaintiffs were from outside California, Bristol-Myers Squibb moved to dismiss for lack of personal jurisdiction.

After the trial court dismissed the action and the appellate court reversed, the California Supreme Court found that California could properly exercise jurisdiction because the defendant had purposely directed activities at the forum state and the non-California plaintiffs’ actions were  related to those activities in the forum state.[14] While the dissent argued that to exercise jurisdiction would be in defiance of Daimler, the majority held that the present holding would not make California an “all-purpose forum for filing suit against [Bristol-Myers Squibb] for any matter” but merely subjects Bristol-Myers to personal jurisdiction for actions related to the present cause of action.[15]

The California Supreme Court was right, and, by the same reasoning, Johnson & Johnson should lose its appeal. Allowing specific jurisdiction in this context both leaves Daimler untouched and satisfies specific jurisdiction’s requirements.

First, the tactics of the plaintiffs in the Johnson & Johnson case are  entirely distinct from the concerns in Daimler. In Daimler, plaintiffs claimed that Mercedez-Benz Argentina had collaborated with the Argentinian government to kidnap, detain, torture, and kill Argentinian workers. Plaintiffs there sought relief in California on the basis of the defendant’s large volume of California sales. Put simply, the challenged activity was distinct from the forum-establishing activity. In contrast, in the Johnson & Johnson case, the challenged activity, failing to warn about talcum powder, is the same as the forum-establishing activity.

Second, plaintiffs using this tactic effectively establish specific jurisdiction. While Johnson & Johnson argue that non-resident plaintiffs’ claims do not arise out of Johnson & Johnson’s forum contacts, they ignore the second half of the requirement. Helicopteros Nacionales de Colombia, S.A. v. Hall held that specific jurisdiction is established when the “cause of action arises out of or relates to the contacts between the defendant and the forum.”[16] As a result, the cause of action does not have to arise out of the defendant’s forum contacts.  Instead, it is sufficient that the cause of action merely relates to the defendant’s forum contacts.

For Johnson & Johnson, the out-of-state cause of action clearly relates to Johnson & Johnson’s contacts with Missouri. Ristesund and Fox’s injuries in South Dakota and Alabama resulted from the tortious sale of talcum powder, and Johnson & Johnson carries on the same injurious activity in Missouri. Further, Johnson & Johnson should be able to anticipate being haled into a Missouri court to answer for their tortious sale of talcum powder. If Johnson & Johnson did not want to answer for these actions in Missouri, then they should never have directed their sales to Missouri.

While such a standard broadens the conventional notion of specific jurisdiction, the standard is not without bounds, and the very claims brought by Ristesund and Fox illustrate this point. The plaintiffs brought claims of strict liability for manufacturing defect and strict liability for defective design.[17] Manufacturing defect concerns some error in the manufacturing process, like leaving glass in talcum powder; defective design concerns a product that is itself dangerous, like talcum powder. A manufacturer causing a single mistake in a product would be subject to suit only in the state to which its defective product was sent and caused injury. In contrast, a defendant who sells a dangerous substance, like talcum powder, would be subject to suit in any state to which it sent its products and caused harm. Regardless of which claim is brought, the defendant subjects himself to suit only where he purposely directs his tortious conduct.

Here, Johnson & Johnson purposely directed tortious conduct towards Missouri. As a result, Missouri, and for that matter any state where Johnson & Johnson has purposely sold its talcum powder products, can exercise personal jurisdiction over Johnson & Johnson.

 

Benjamin Ford*

Edited By: Ryan Reed

[1] Rob McLean, Johnson & Johnson just lost another talcum powder cancer lawsuit, CNN Money (May 3, 2016), available at: http://money.cnn.com/2016/05/03/news/companies/johnson-and-johnson-cancer-talcum-powder/.

[2] Int’l Shoe Co. v. State of Wash., Office of Unemployment Comp. & Placement, 326 U.S. 310, 316 (1945).

[3] World-Wide Volkswagen Corp. v. Woodson, 444 U.S. 286, 297 (1980).

[4] Daimler AG v. Bauman, 134 S.Ct. 746, 757 (2014).

[5] Goodyear Dunlop Tires Operations, S.A. v. Brown, 564 U.S. 915, 919 (2011).

[6] Keeton v. Hustler Magazine, Inc., 465 U.S. 770, 774 (1984).

[7] Helicopteros Nacionales de Colombia, S.A. v. Hall, 466 U.S. 408, 427 (1984).

[8] Asahi Metal Industry, Co. v. Superior Court, 480 U.S. 102, 113 (1987).

[9] Goodyear, 564 U.S. at 919 (quoting Int’l Shoe, 326 U.S. at 317).

[10] Daimler, 134 S.Ct. at 760.

[11] Bristol-Myers Squibb v. Superior Court, 206 Cal.Rptr.3d 636 (Cal. 2016).

[12] Id.

[13] Id.

[14] Id. at 8-18.

[15] Id. at 14 (emphasis added).

[16] Helicopteros Nacionales de Colombia, S.A. v. Hall, 466 U.S. 408, 427 (1984) (emphasis added).

[17] Neither of these claims went to jury trial.

* Saint Louis University School of Law, Class of 2018