The United States Supreme Court recently clarified the extent of personal jurisdiction over a corporation. The Court previously established that a court in a state other than a corporation’s place of incorporation or principal place of business can assert general or all-purpose jurisdiction over a corporation when the corporation’s “affiliations with the State are so ‘continuous and systematic’ as to render [it] essentially at home in the forum State.” Daimler AG v. Bauman, 134 S. Ct. 746, 761 (2014) (citing Goodyear Dunlop Tires Ops., S.A. v. Brown, 131 S. Ct. 2846, 2851 (2011)).
In Bristol-Myers Squibb Co. v. Superior Court of California, San Francisco County, No. 16-466, slip op. (U.S. June 19, 2017), the plaintiffs, most of whom were not California residents, sued the defendant in California. The defendant’s prescription drug allegedly giving rise to the plaintiffs’ claims was sold in California, the defendant engaged in business there, several of the defendant’s research and laboratory facilities were located there, and a sales force was employed there. However, the defendant was not incorporated in California, its headquarters and substantial operations were not in California, and the defendant did not develop, create a marketing strategy for, manufacture, label, package, or work on regulatory approval for the subject prescription drug in California. The California Supreme Court found no general jurisdiction but applied a “sliding scale approach to specific jurisdiction” under which “the more wide ranging the defendant’s forum contacts, the more readily is shown a connection between the forum contacts and the claim.” Id. at 3. As to the non-residents’ claim then, the California Supreme Court found that based on the defendant’s contacts in California and the similarity between the residents’ and non-residents’ claims, specific jurisdiction existed “based on a less direct connection between [the defendant’s] forum activities and the plaintiffs’ claims than might otherwise be required.” Id. at 3-4.
The United States Supreme Court reversed, rejected the “sliding scale” approach to specific or conduct-based jurisdiction, and held that the primary focus of personal jurisdiction is the defendant’s relationship to the forum state and specific jurisdiction requires “an affiliation between the forum and the underlying controversy” such that specific jurisdiction “is confined to adjudication of issues deriving from, or connected with, the very controversy that establishes jurisdiction.” Id. at 5. The Court held:
In order for a court to exercise specific jurisdiction over a claim, there must be an ‘affiliation between the forum and the underlying controversy, principally [an] activity or occurrence that takes place in the forum State.’ When there is no such connection, specific jurisdiction is lacking regardless of the extent of a defendant’s unconnected activities in the State.
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[F]or specific jurisdiction, a defendant’s general connections with the forum are not enough. As we have said, ‘[a] corporation’s ‘continuous activity of some sorts within a state . . . is not enough to support the demand that the corporation be amenable to suits unrelated to that activity.’
Id. at 7-8 (citations omitted).
Thus, in order for general jurisdiction to exist, an action must be brought against a corporation in its state of incorporation, the state of its principal place of business or nerve center (see Hertz Corp. v. Friend, 130 S. Ct. 1181 (2010)), or a state in which the corporation’s affiliations with the state are so ‘continuous and systematic’ as to render the corporation essentially at home there. For specific jurisdiction to exist, there must be an affiliation between the corporation, the forum state, and the specific controversy at issue.
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