California Court Excludes Plaintiff Expert for Abusing Common Bradford Hill Analysis

A California appellate court has affirmed the exclusion of an expert witness who “(1) unreliably found causation based on [a single] study alone while disregarding other human data …; (2) analyzed animal data even though he was unqualified to do so; and (3) misapplied [several] of the nine factors of the Bradford Hill analysis.” Onglyza Product Cases involved claimed negative cardiovascular effects from a diabetes medication. The rulings are, however, broadly applicable to expert witnesses generally and to the recurring minefield that is Bradford Hill.

“A trial court does not abuse its discretion in excluding expert testimony on general causation when the expert’s opinion is based on a single study that provides no reasonable basis for the opinion offered.” Here, the studies’ authors said more study was needed to address causation.

“We do not hold that one randomized controlled trial is never sufficient to establish general causation, but on this record, the trial court did not abuse its discretion in finding that Dr. Goyal’s reliance on SAVOR alone to establish general causation was logically unsound, especially given Dr. Goyal’s own agreement that SAVOR’s finding needed to be replicated in order to determine causation.”

The trial court’s “decision was based on various methodological defects it found in Dr. Goyal’s application of six of the nine Bradford Hill factors, and that because he failed to weigh them together, it could not identify any predicate opinion on a specific factor that was not essential to his ultimate opinion. As a result, it concluded that methodological defects in any of the factors would upset the ultimate opinion on causation. This was a proper exercise of the court’s gatekeeping responsibility.”

In some instances, the court ruled that the expert was “refusing to engage with a factor of the Bradford Hill analysis on its terms” by essentially re-defining the terms to suit his opinions. Sound familiar?

For example, “consistency … is upheld when the same finding is shown in multiple studies across different populations and settings.” Yet the expert relied on only one study. He also relied on data from preclinical animal studies, though he was not qualified to interpret animal data.  

Similarly, “specificity” is met “if the exposure is associated only with a single disease or type of disease.” The expert testified that specificity was nonetheless met through the single study because “the randomized controlled trial allows you to fulfill that criterion.” “[A]nother example of Dr. Goyal refusing to engage with a factor of the Bradford Hill analysis on its terms.” 

“‘Biological plausibility’ refers to whether there is a plausible biological mechanism to explain a cause-and-effect relationship between exposure and disease. … The trial court noted that the strongest mechanism Dr. Goyal could identify was only ‘a proposed hypothesis.’” His opinion was therefore rejected because he did “not undertake an analysis of whether the data that exists supports or undermines his opinion that the proposed mechanisms are plausible.”

“‘Analogy’ considers whether there have been associations found between a related or similar substance to the one at issue and the disease or outcome.” The expert analogized to a different class of diabetes medication than the one at issue (DPP-4). “The trial court reasonably concluded that this opinion was not reliable because the only reason for Dr. Goyal to analogize saxagliptin to TZDs rather than to other DPP-4 inhibitors was that the former supported his ultimate conclusion on causation and the latter did not.”

Bonus for the defense: because general causation must be proven by expert evidence, and plaintiffs’ sole expert on general causation was excluded, summary judgment followed. The trial court denied plaintiffs’ request to re-open discovery and allow them to find another expert. The Court of Appeal affirmed that too.

Plaintiff Experts Can Now Change Stories between Deposition and Summary Judgment?

It just got tougher to pin a California plaintiff’s expert down at deposition.

Generally, a witness cannot give a declaration opposing summary judgment that is inconsistent with prior discovery responses (D’Amico v. Board of Medical Examiners (1974) 11 Cal.3d 1), and an expert witness cannot testify beyond the opinions offered at deposition (Jones v. Moore (2000) 80 Cal.App.4th 557, 565 [“When an expert deponent testifies as to specific opinions and affirmatively states those are the only opinions he intends to offer at trial, it would be grossly unfair and prejudicial to permit the expert to offer additional opinions at trial.”]).

A recent California decision throws both those principles into question. Harris v. Tomas Dee Engineering Co. ruled that an expert’s declaration advancing a new theory was not only admissible, but created a factual issue that required reversing summary judgment to the defendant.

The new theory was on a key issue in the case: whether the decedent was ever exposed to asbestos from the defendant’s activities. At deposition, industrial hygienist William Ewing testified, “If he wasn’t present when the work was done, then I don’t think there’d be any issue regarding any exposure.” When plaintiffs were confronted with a potentially fatal motion for summary judgment based on this testimony, however, the expert backtracked. He provided a declaration opining that Mr. Harris “did not need to be present at the exact time that the insulation block was being removed, swept up, and/or installed by Thomas [Dee] workers to be exposed.” Why? Because of the theory of re-entrainment. “This cycle of re-suspension is well-documented and is generally accepted in the industrial hygiene field.”

The trial court rejected the new opinion as contradictory, and granted summary judgment. The Court of Appeal reversed. It ruled that the Jones v. Moore bar applied to an expert’s trial testimony, but not to testimony on summary judgment. This is contrary to Perry v. Bakewell Hawthorne, LLC (2017) 2 Cal.5th 536, 541-543, where the Supreme Court held that the same evidentiary standards apply on summary judgment and trial. Harris does not mention Perry.

Harris also ruled that D’Amico was more limited than many defense counsel suppose, and did not bar the changed testimony. The Court of Appeal distinguished D’Amico as involving factual assertions by a party. “In contrast, in the present case, Mr. Ewing’s declaration relates a scientific theory that he apparently did not discuss in his deposition, and his statements in the declaration do not contradict any prior testimony regarding facts he observed.” Further, he explained the difference “by referencing the re-entrainment theory, which he stated is widely accepted in the scientific community.” The court distinguished cases where no explanation was offered.

Harris provides several important takeaways for defense counsel. 

First, the case underscores the importance of asking the right questions of expert witnesses at deposition, ensuring that the opinions are clearly stated, and clearly stated to be the only opinions the expert has to offer.   

Second, noticeably absent from the discussion in Harris was the adequacy of plaintiff’s expert witness declaration under California Code of Civil Procedure section 2034.210.  Had the defense focused on the adequacy of the expert witness declaration – e.g., whether it actually advanced the re-entrainment opinion –  instead of “contradictory testimony,” the result may have been different. 

Third,  rather than focus on excluding contradictory opinions at summary judgment, the prudent defense lawyer should focus examination at deposition on foundation for an expert’s opinions, and then assert evidentiary objections to those opinions at the summary judgment phase. 

Fourth,  Harris calls into question whether any strategy to lock down an expert witness can be 100% effective, or whether a plaintiff expert can always advance a new theory if it is “out there” in the literature. There are still concrete steps that counsel can take.

California highlights burden on defendants seeking to apportion liability to co-defendants and non-parties

A California Court of Appeal has rejected a defense challenge that the defendant was assigned too high a percentage of liability (60%), because the defendant did not introduce enough evidence about other parties’ liability. The court also rejected a defense claim that the $25 million noneconomic damage award was excessive, even though it was “well beyond the normal range of awards in similar cases for similar injuries” per a survey of similar verdicts.

Phipps v. Copeland Corporation LLC was an asbestos personal injury case in which plaintiff alleged that his mesothelioma resulted from asbestos exposure during his three years in the U.S. Navy and during his subsequent career as an HVAC technician. Copeland Corporation was one of four compressor manufacturers plaintiff sued by plaintiff, along with many other defendants. Plaintiff proceeded to verdict against Copeland only.

Although plaintiff’s medical and causation experts acknowledged during trial at all of plaintiff’s asbestos exposures contributed to his overall dose, they specifically (and expectedly) amplified the exposures to the asbestos-containing gaskets contained within Copeland’s compressors in an effort to maximize Copeland’s share.

The jury found for plaintiff, and ultimately apportioned 60% liability to Copeland, of 15 parties and nonparties on the verdict form. Copeland argued that the evidence could not support “assigning twenty times more fault to Copeland than to any of the other compressor manufacturers, and more fault than all other entities combined.”

The court, however, disagreed. “[A]s the party with the burden to establish the percentage of comparative fault attributable to others [citations omitted], Copeland, to obtain a reversal, must show the evidence compelled a verdict in its favor on apportionment as a matter of law.” Copeland argued that the apportionment was “illogical” because it found Copeland more responsible than any other compressor companies. However, the court pointed out there was no evidence “to compel a finding that William replaced fewer Copeland gaskets than he did Carrier, Trane, or York gaskets.” In reaching this conclusion, the court found that there were sufficient, uncontroverted facts to establish that plaintiff would have worked with far fewer asbestos-containing components from the other equipment manufacturers than from Copeland. In the court’s view, Copeland failed to proffer sufficient evidence of the frequency, intensity and duration of plaintiff’s exposure to the products of other defendants, including the HVAC defendants, and so could not show that the jury’s 60% liability finding was improper.

“The second reason Copeland has failed to demonstrate the evidence compelled a verdict in its favor on apportionment as a matter of law is that ‘the jury was permitted to consider the relative culpability of the parties in assessing comparative fault.’” That culpability need not rise to the level of that required for punitive damages, as here the defense had won summary adjudication nixing punitive damages from the case.

Copeland also argued that the noneconomic damages award was excessive. In support, Copeland submitted to the trial court “a spreadsheet labeled “Plaintiff Verdict Amounts in Asbestos/Mesothelioma Cases.” An accompanying declaration explained that the spreadsheet was the result of “a process for obtaining comparative verdicts in cases that, similar to this one, involved allegations of asbestos exposure leading to mesothelioma,” based on “Lexis Advance® Verdict Analyzer.” Neither the trial court nor the Court of Appeal was moved by this use of technology.

“The trial court did not abuse its discretion in refusing to consider Copeland’s survey of awards in other cases because, if for no other reason, sections 657 and 658 prohibited the court from considering such material:” the statutes require motions to be made on “the minutes of the court.” Accordingly, and because the award was supported by substantial evidence, the judgment and denial of new trial was affirmed.

This case serves as a critical cautionary tale to defendants at trial of the importance of introducing evidence of the liability of others. While California’s Proposition 51 imposes several liability only for non-economic damages, the burden of proving these “alternate shares” lies exclusively with the defendant. The Phipps court made clear that, in its discretion, Copeland simply did not do enough to make a showing that the jury’s apportionment of responsibility was improper. In light of Phipps, a defendant should consider introducing evidence such as:

  • Quantitative assessments of the likely doses of asbestos from the products of others and any possible exposures from one’s own products, including dose reconstructions from experts when possible;
  • Medical causation evidence regarding the relative carcinogeneity of fiber type; and
  • Documentary, “hard” evidence of a co-defendant’s liabilities.

When there are multiple defendants at trial, the plaintiff will make some of this case. Where, as here, there is only a single defendant, this will be more onerous and time-consuming.

California Limits Punitive Damages Against Corporations

Last week, a California appellate court limited punitive damages against corporations. By statute, punitive damages can be awarded against a corporation only if the acts were taken or approved by an “officer, director, or managing agent.” Yet courts regularly allow plaintiffs to tar the entire organization without such specific proof. Morgan v. J-M Manufacturing Co. rejected that standard plaintiff position, re-affirmed the statutory restriction, and reversed a $15 million punitive damages award in an asbestos case.

Defendants will be able to use this decision to ward off punitive damages claims, including at the summary adjudication stage, for lack of sufficient evidence. Plaintiffs’ counsel will likely cite this decision to support discovery and deposition demands about specific individuals from corporate defendants. Even such more robust discovery may not uncover witnesses or other evidence to support a punitive damages claim, particularly in cases involving asbestos or other materials that have not been used for decades.

Some highlights from the decision:

The primary focus of J-MM’s argument is that there is no evidence in the record that a J-MM officer, director, or managing agent authorized or ratified any conduct. J-MM contends that at trial, Morgan “treated J-MM as a monolithic entity” and referred to the company—in its entirety—as “they,” without ever identifying who “they” referred to. “[O]f the few J-MM employees whose conduct was specifically identified at trial,” J-MM argues, “none even qualified as officers, directors or managing agents of J-MM during the relevant time period.”

Morgan does not argue that there is evidence identifying any act of any particular J-MM officer, director, or managing agent. Morgan’s argument is that “the entire organization was involved in the acts giving rise to malice,” and therefore it need not introduce clear and convincing evidence that any particular officer, director, or managing agent had the requisite state of mind.

“[i]t is difficult to imagine how corporate malice could be showing in the case of a large corporation except by piecing together knowledge and acts of the corporation’s multitude of managing agents.” … It may be that J-MM’s officers, directors, and managing agents acted with the requisite state of mind to support an award of punitive damages in an appropriate case. A plaintiff may be able to provide evidence at trial to “piec[e] together knowledge and acts of [J-MM’s] multitude of managing agents.” But that did not happen here.

That the defendant is a large company does not relax a plaintiff’s burden of proof . . .

***

The decision changed from unpublished, which could not be cited to California courts, to published and therefore citable. I joined in a successful publication request.

California Increases Potential Liability Exposure in Multi-Defendant Cases

The risks of litigating in California just got larger.

California’s Proposition 51 makes defendants jointly liable for all economic damages, but severally liable for noneconomic damages only in proportion to fault. The California Supreme Court yesterday unanimously ruled that intentional tortfeasors cannot use Proposition 51 to reduce their share of noneconomic damages. Resolving a split among intermediate appellate courts, the court ruled that “section 1431.2, subdivision (a), does not authorize a reduction in the liability of intentional tortfeasors for noneconomic damages based on the extent to which the negligence of other actors — including the plaintiffs, any codefendants, injured parties, and nonparties — contributed to the injuries in question.”

This decision will further incentivize plaintiffs to include and pursue intentional tort claims in multi-defendant cases, even when they are really only “add-ons” to a claim grounded in another theory (e.g., fraud claims in strict product liability failure to warn cases). The potential damages against any defendant facing such a claim now include all, not just some, of the noneconomic damages. Noneconomic damages for such matters as pain, suffering, and loss of consortium are often a multiple of the economic award. Compounding the problem: whether such intentional tort claims will be precluded from insurance coverage as a “loss intentionally caused by the insured.” 

In B.B. v. County of Los Angeles, police used excessive force and caused the death of a man they caught assaulting a woman on the street while in a drug-induced haze. The jury found decedent 40% responsible, several deputies negligent and collectively 40% responsible, and Deputy Aviles liable for battery and 20% responsible. The trial court entered a judgment holding Aviles liable for 100% of both economic and non-economic damages. The Court of Appeal reversed, but the Supreme Court reversed the Court of Appeal, effectively reinstating the judgment.

In a typically thoughtful opinion from Justice Chin, the court ruled that the statute’s application to cases decided “under principles of comparative fault” included negligence (and strict product liability), but did not include intentional tortfeasors. The court rejected multiple arguments that this was unfair and inconsistent with other language in Proposition 51, including those made by defendants and in an amicus curiae brief supporting the defense to which yours truly contributed.

We previously reported on this case just after it was argued, see here.

Will California Eliminate Several Liability for Non-Economic Damages for Some Defendants?

In California, while all defendants are liable to plaintiff for 100% of plaintiff’s economic damages, under “Proposition 51” defendants are liable for non-economic damages only in proportion to fault. The California Supreme Court heard argument this week on whether that includes a defendant liable for an intentional tort.

B.B. v. County of Los Angeles involves suits brought by the widow and surviving children of a man who died after a “prolonged and violent struggle with several deputies” including a chokehold. Several deputies were found negligent, and one found liable for intentional use of excessive force – battery. The case involved whether the intentional tort deputy should be liable for 100% of the non-economic damages or only his 20% share of responsibility.

Plaintiffs argued that the statute applies to an “action … based on principles of comparative fault,” and that while negligence is based on such principles, intentional tort liability is not. Intentional tortfeasors should not be allowed to shift the risk of noncollectibility of any portion of the non-economic damages to plaintiff. The defense argued that the purpose of Proposition 51 is to share responsibility for non-economic damages among all tortfeasors. I co-authored an amicus curiae brief for the defense.

The court posed remarkably few questions to either side, perhaps in part due to the novelty of arguing via remote video connection. That makes it harder to assess which way the court may be leaning.

The court’s decision, due within 90 days, will potentially affect many tort cases, and in particular many toxic tort cases. Plaintiffs routinely sue many defendants in the same case for committing independent acts of wrongdoing that collectively contributed to cause an injury. In product liability and asbestos exposure cases, plaintiffs typically assert claims for negligent and strict liability failure to warn, which they use as the springboard to also assert intentional tort claims for fraud and concealment based on the same evidence concerning a defendant’s failure (decades or even generations ago) to provide information about a product. If the California Supreme Court decides that intentional tort defendants are categorically exempt from the several liability protections of Proposition 51, then we can expect to see even more emphasis by the plaintiffs’ bar to advance intentional tort theories like fraud or battery.

Damages Limited to Policy Limits? Not Quite.

When a defendant dies before suit is filed, a California plaintiff can sue by naming the estate as defendant but serving the decedent’s insurer. The plaintiff cannot recover damages from the insurer beyond the policy limits. (Cal. Prob. Code, §§ 550-555.)

In a recent case brought under these statutes, the insurer ended up paying more than policy limits. Meleski v. Estate of Albert Hotlen. How did this happen?

Plaintiff made an offer of judgment (like rule 68 offers in Federal rules-based jurisdictions) for one dollar below policy limits. California’s section 998 (much like rule 68 offers in Federal rules-based jurisdictions), allows a party that makes an offer the other side does not accept to recover costs, including expert fees, if the party that does not accept the offer does not achieve a more favorable result at trial. (Cal. Code Civ. Proc., § 998.) The insurer did not accept, and the jury returned a verdict above policy limits. In Meleski, costs amounted to two thirds of the policy limit. Plaintiff accordingly sought payment of costs under section 998.

The insurer argued that the offer of judgment statute applied only to parties and that the insurer was not a named party. The court of appeal rejected this argument, holding that the insurer was, though not named, nevertheless a de facto. The court reasoned that the insurer had “complete control of the litigation of this matter, it also was the only entity opposing Plaintiff that risked losing money in the litigation.” The court concluded by stating that “it is a legal fiction that the estate is the party. In actuality, [the insurance company] is the party litigating the case, inasmuch as it alone is at risk of loss and it alone controls the litigation.” Although a personal representative of the estate can be joined to the litigation, one was not in this case.

The court then ruled that the statutory limitation of damages to policy limits did not limit an award under section 998. The Probate Code limit applies to damages, but a section 998 award is of costs incurred for litigation after denial of the offer, not damages.

This decision gives 998 offers their full weight in circumstances where insurers might have thought the policy limit is the worst case scenario. As the court of appeal stated, recoveries under 998 are not damages, but rather are costs and therefore recoverable in addition to and despite the statutory limitation.

“But Everyone Else Did It This Way:” Industry Custom Admitted in California Strict Liability Cases

The California Supreme Court has ruled that industry custom and practice may be admissible in a strict products liability action, “depend[ing] on the purpose for which the evidence is offered.” (Kim v. Toyota Motor Corp.) The decision is a win for product liability defendants. Many trial courts have ruled all industry custom and practice evidence irrelevant as to strict liability, while allowing it in negligence.

Disapproving several prior appellate decisions, the court ruled that such evidence is admissible for the purpose of “the jury’s evaluation of whether the product is as safely designed as it should be, considering the feasibility and cost of alternative designs.” In contrast, “[e]vidence that a manufacturer’s design conforms with industry custom and practice is not relevant, and therefore not admissible, to show that the manufacturer acted reasonably in adopting a challenged design and therefore cannot be held liable.” Thus, it is admissible, but never dispositive.

Mr. Kim was injured when his 2005 pickup rolled over and crashed on the Angeles Crest Highway. Plaintiffs alleged that if the pickup had been equipped with a safety feature that came as standard equipment on SUVs, it would not have rolled over. Toyota introduced evidence that no manufacturers included that feature as standard on pickup trucks. The trial court, Court of Appeal and Supreme Court all approved.

The issue … is not whether the manufacturer complied with a standard of care, as measured by prevailing industry standards, but instead whether there is something ‘wrong’ with a product’s design … because, on balance, the design is not as safe as it should be.

[E]vidence of industry custom and practice sometimes does shed light not just on the reasonableness of the manufacturer’s conduct in designing a product, but on the adequacy of the design itself.

Another description: industry practice “illuminates the relative complexity of design decisions and the trade-offs that are frequently required in the adoption of alternative designs.” The court was persuaded in part by the fact that trade association standards are admissible, and there seemed no logical reason to distinguish those standards from industry custom.

The court was also persuaded in part by the fact that plaintiffs themselves introduced industry custom evidence, such as the evidence that many manufacturers included the safety feature on their SUVs. “[T]he rule is a two-way street.”

Is this the proverbial camel’s nose in the allegorical tent, thus the beginning of the end of the rule against introducing custom and practice in strict liability cases? If no manufacturer of a particular product ever included a warning about a supposed toxin, is that relevant? If all manufacturers of a set of products allowed a trace amount of say benzene because it was so hard to eliminate it 100%, is that admissible in a strict liability case? If all employers operating a certain kind of facility adopted one level of protections against chemical exposure, even though more could almost always at least theoretically be done? The Kim decision arguably allows such evidence, but other courts may limit the effect of the decision.

There are at least two significant limitations to the reach of this decision.

First, it applies only to the risk-benefit strict liability test. Not consumer expectations, which plaintiffs more frequently assert.

Second, it applies to “industry custom and practice,” but not “state of the art.” “By ‘industry custom and practice,’ we refer to the use of the challenged design within the relevant industry—‘what is done’—as opposed to so-called ‘state of the art’ evidence, which concerns ‘what can be done’ under present technological capacity.”

This second limit may benefit defendants. What “can be done” for safety likely includes more than what others in the industry actually do.

The Kim result may be less notable in other jurisdictions: the decision recites it is joining “the majority of states that have permitted the admission of [such] evidence.” It is, however, a major development in California.

California: Statute of Limitations for Prenatal Exposure Tolled Until Adulthood, and (Effectively) Beyond

The California Supreme Court yesterday ruled, contrary to the interest of defendants, that the statute of limitations for alleged in utero exposure to “a hazardous chemical or toxic substance” is tolled while the plaintiff is a minor. Further, the applicable statute is subject to a “discovery rule.” This means that such cases may lie dormant for decades before being sprung on defendants.

In Lopez v. Sony Electronics, the court resolved the question “which statute of limitations applies: that for toxic exposure claims, or that for prenatal injuries?” The court recognized that a claim for prenatal toxic exposure “appears to fall within the ambit of both statutes of limitations.”

“Because the toxic exposure statute was more recently enacted, and its language plainly encompasses prenatal injuries, we conclude it applies here.” The court also found persuasive that the toxic exposure statute included two express exclusions, reasoning that if the legislature had intended to exclude prenatal injuries as well that would have been in the statute. “Under the maxim of statutory construction, expressio unius est exclusio alterius, if exemptions are specified in a statute, we may not imply additional exemptions.”

The effect on defendants is potentially drastic. “The limitations period for toxic exposure suits is two years, but it is tolled while the plaintiff is a minor.” The prenatal injury statute of limitations, in contrast, is six years but with no tolling during minority. That alone is a difference of fourteen years. Further, the toxic exposure suit (but not the prenatal statute) is subject to the discovery rule, meaning that the two-year period may not begin to run until even later, when plaintiff claims first knowledge of “(1) an injury, (2) the physical cause of the injury, and (3) sufficient facts to put a reasonable person on inquiry notice that the injury was caused or contributed to by the wrongful act of another.” Thus, the Lopez decision means more defendants will be faced with suits on stale facts, disappeared witnesses and documents, frayed memories, and everything else that statutes of limitation are supposed to protect against.

Click here and here for previous blog posts on this issue.

California Greenlights “Jurisdiction by Joinder” in Mass Tort Cases

9-1The California Supreme Court earlier this week issued an opinion that, in the words of the dissent, allows for “jurisdiction by joinder.” (Bristol-Myers Squibb Co. v. Superior Court (Anderson), Case No. S221038.) Plaintiffs with claims arising wholly outside California, against non-California defendants, may nevertheless be entitled to jurisdiction in a California court. The keys appear to be (a) whether the claims are similar to those of California residents (b) who are also plaintiffs in the suit (c) against a defendant that conducts significant activity in California as well as elsewhere. While Bristol-Myers most directly applies to large entities in mass tort cases, its rationale could well extend to any lawsuit in which a product was sold or activity conducted in multiple states. The 4-3 decision may also be the subject of a petition for certiorari to the United States Supreme Court.

“Bristol-Myers Squibb Company (BMS), a pharmaceutical manufacturer, conducts significant business and research activities in California but is neither incorporated nor headquartered here.” Eight California lawsuits were filed against it related to BMS’s drug Plavix. Plaintiffs were 86 California residents and 592 nonresidents. None of the residents purchased the drug in or from California, or had other relevant contacts with the state.

The opinion recognizes that “BMS’s business contacts in California are insufficient to invoke general jurisdiction,” because under Daimler AG v. Bauman (2014) 571 U.S. __ , 134 S.Ct. 746, 187 L.Ed.2d 624 that is restricted to a corporation’s state of incorporation or principal place of business. (We have blogged about Daimler and its progeny before: California Court rules no jurisdiction over foreign parent corporations; No in state dealings for years – no jurisdictionOut of state defendant? Out of state exposure? File suit somewhere else; Registered in Delaware Is Not At “Home” There; and A More Personal Touch: Challenge to Madison County Jurisdiction.) Bristol-Myers held, however, that “the company’s California activities are sufficiently related to the nonresident plaintiffs’ suits to support the invocation of specific jurisdiction.”

The court found that it was undisputed that there was specific jurisdiction over the California plaintiffs’ claims, and found that there should be jurisdiction over the nonresidents’ claims as well because “BMS sold Plavix to both the California plaintiffs and the nonresident plaintiffs as part of a common nationwide course of distribution.”

The California activities that Bristol-Myers found “related” to the nonresident plaintiffs’ claims: “BMS’s extensive contacts with California, encompassing extensive marketing and distribution of Plavix, hundreds of millions of dollars of revenue from Plavix sales, a relationship with a California distributor, substantial research and development facilities, and hundreds of California employees” is enough for California courts to “exercise specific personal jurisdiction over nonresident plaintiffs’ claims in this action, which arise from the same course of conduct that gave rise to California plaintiffs‘ claims: BMS’s development and nationwide marketing and distribution of Plavix.”

Bristol-Myers pointed out that the court had previously “adopted a sliding scale approach to specific jurisdiction,” such that that “the more wide ranging the defendant‘s forum contacts, the more readily is shown a connection between the forum contacts and the claim.” Specific jurisdiction is thus proper in this case because “BMS’s contacts with California are substantial and the company has enjoyed sizeable revenues from the sales of its product here — the very product that is the subject of the claims of all of the plaintiffs.”

The court identified several California interests in the joint litigation. One is that “evidence of the injuries allegedly suffered by the nonresident plaintiffs may be relevant and admissible to prove that Plavix similarly injured the California plaintiffs,” so “trying their cases together with those of nonresident plaintiffs could promote efficient adjudication of California residents’ claims.” Similarly, the court was concerned that “separating the nonresident plaintiffs from the resident plaintiffs and forcing the nonresidents to sue in other states” could result in “delays in the California proceedings that would be created by the litigation and appeals of discovery and factual conflicts in the various other forums.” A further, case-specific reason was that “California also has an interest in regulating the conduct of BMS’s codefendant, McKesson Corporation, which is headquartered in California, as a joint defendant with BMS.”

As the dissenting opinion stated: “The majority expands specific jurisdiction to the point that, for a large category of defendants, it becomes indistinguishable from general jurisdiction.” The dissent argued that “mere similarity of claims is an insufficient basis for specific jurisdiction. The claims of real parties in interest, nonresidents injured by their use of Plavix they purchased and used in other states, in no sense arise from BMS’s marketing and sales of Plavix in California, or from any of BMS’s other activities in this state.” The dissent quoted with approval a law review article on the Court of Appeal’s decision: “The claims of the California and nonresident plaintiffs are merely parallel.”

Although the majority opinion was couched in terms of “the particular circumstances of this case,” the dissent looked to the broader precedent being set.

“[T]he majority notes that BMS maintains some research facilities in California, although the majority concedes Plavix was not developed in those facilities. … This second ground of relatedness is both illogical and startling in its potential breadth. Because BMS has performed research on other drugs in California, claims of injury from Plavix may, according to the majority, be adjudicated in this state. Will we in the next case decide that a company may be sued in California for dismissing an employee in Florida because on another occasion it fired a different employee in California, or that an Illinois resident can sue his automobile insurer here for bad faith because the defendant sells health care policies in the California market?”

“As California holds a substantial portion of the United States population, any company selling a product or service nationwide, regardless of where it is incorporated or headquartered, is likely to do a substantial part of its business in California. Under the majority’s theory of specific jurisdiction, California provides a forum for plaintiffs from any number of states to join with California plaintiffs seeking redress for injuries from virtually any course of business conduct a defendant has pursued on a nationwide basis, without any showing of a relationship between the defendant’s conduct in California and the nonresident plaintiffs’ claims. The majority thus sanctions our state to regularly adjudicate disputes arising purely from conduct in other states, brought by nonresidents who suffered no injury here, against companies who are not at home here but simply do business in the state.”

The dissent took issue with other reasons proffered by the majority. While “[t]he majority argues that taking jurisdiction over the nonresidents’ claims furthers a California interest because evidence of their injuries may be admissible to help the California plaintiffs prove Plavix was a defective product,”  the dissent pointed out that “admissibility of other injuries does not depend on joinder of the other injured person.” The majority thought that joint litigation would help the California plaintiffs, but the dissent pointed out that there are many other Plavix suits in other courts around the country. “Whether or not real parties’ claims are heard together with those of the California plaintiffs, inefficiency and the potential for conflicting rulings will exist so long as actions are simultaneously pending in several state and federal courts….No mechanism exists for centralizing nationwide litigation in a state court; there is no means by which pending actions in Illinois courts, for example, can be transferred to a California court.”

The dissent also answered the question, what’s the superlative of “red herring?”

“Finally, the majority asserts that California’s interest in regulating the conduct of codefendant McKesson Corporation (McKesson), a pharmaceutical distributor headquartered in California, justifies adjudicating real parties’ claims against BMS in a California court.…Of all the majority’s red herrings, this is perhaps the ruddiest.” Because of course the question is jurisdiction against Bristol-Myers, not the co-defendant (and there was question as to its role anyway). Research indicates this is the first use of “ruddiest” in a reported California decision. It may not be the last.

As stated above, while Bristol-Myers most directly applies to large entities in mass tort cases, its rationale could well extend to any lawsuit in which a product was sold or an activity conducted in multiple states. The most significant limitation appears to be that a nonresident plaintiff still may not be able to challenge a nonresident defendant in California courts alone; the nonresident needs to find California plaintiffs with similar claims. In any event, counsel who have been advising clients that the Daimler decision forecloses claims in California courts based on general jurisdiction should re-examine that position in light of the Bristol-Myers ruling on specific jurisdiction.