There’s No Place Like Home: United States Supreme Court Reaffirms Daimler, Sends Out-of-State Plaintiffs Packing In Two Highly Anticipated Cases

The United States Supreme Court has issued two highly-anticipated personal jurisdiction decisions limiting suits against defendants who are not “at home” in a state, or alternatively, did not commit a wrongful act in that state.

Specific Jurisdiction

“General jurisdiction” exists over a defendant only where it is “at home,” generally where it is incorporated or has its principal place of business.  “Specific jurisdiction” exists only when the claims in a lawsuit arises out of a defendant’s connection to the jurisdiction, such as selling products. The Supreme Court reaffirmed these limits on jurisdiction in Bristol-Myers Squibb Co. v. Superior Court of California, San Francisco County, No. 16-466 (June 19, 2017).

Some 678 plaintiffs (592 of whom were out-of-state residents) filed suit in California state court against Bristol-Myers Squibb Company (“BMS”), asserting various state-law claims based on injuries allegedly caused by a BMS drug called Plavix. BMS moved to quash the non-residents’ suits for lack of jurisdiction. BMS was headquartered and incorporated outside California, so there was no general jurisdiction. Despite the fact that the nonresidents had not taken the drug in California, the California Supreme Court held that California courts had “specific jurisdiction to entertain the nonresidents’ claims.”  The United States Supreme Court reversed.

The California Supreme Court had applied a “sliding scale approach to specific jurisdiction,” finding that BMS’s “extensive contacts with California” permitted a “less direct connection between BMS’s forum activities and plaintiffs’ claims than might otherwise be required.” Because the claims of both the resident plaintiffs and non-resident plaintiffs were similar and “based on the same allegedly defective product and the . . . misleading marketing and promotion of that product,” the “less direct connection” requirement as met. Thus, the court reasoned, it had personal jurisdiction over all the claims of all the plaintiffs, even in the absence of any California conduct as to the out-of-state plaintiffs.

The Supreme Court rejected this in no uncertain terms:

“Under the California approach, the strength of the requisite connection between the forum and the specific claims at issue is relaxed if the defendant has extensive forum contacts that are unrelated to those claims. Our cases provide no support for this approach, which resembles a loose and spurious form of general jurisdiction. For specific jurisdiction, a defendant’s general connections with the forum are not enough….What is needed—and what is missing here—is a connection between the forum and the specific claims at issue.”

This is true even if the defendant would suffer minimal or no inconvenience, even if the defendant has extensive contacts with the state, even if the forum had a strong interest in the application of its laws, and even if the forum state were the most convenient location for the litigation. Bristol-Myers should serve to help defendants limit the jurisdictions in which suit may properly be brought, and reduce forum-shopping in mass tort and perhaps other cases.

General Jurisdiction

On the issue of general jurisdiction, BNSF Railway Co. v. Tyrrell, No. 16-405 (May 30, 2017), the Supreme Court made clear that its 2014 ruling in Daimler AG v. Bauman precludes the exercise of general jurisdiction over a non-resident defendant unless that defendant has contacts which are so “continuous and systematic” so as to render that defendant essentially at home in the forum state. Thus, the Court rejected multiple theories on which plaintiff attempted to justify jurisdiction over BNSF in Montana.

First, it ruled that the Federal Employers’ Liability Act (“FELA”), a federal law that allows railroad workers to sue their employers for injuries that occur on the job, does not itself create a special rule authorizing jurisdiction over railroads just because they happen to do business in a particular place. Second, and most notably, the Court held that a Montana law that allows courts in the state to exercise jurisdiction over “persons found” was in violation of the Constitution. That is, even if BNSF conceded that it is “found” in Montana, the Court held that exercising jurisdiction over BNSF must still be consistent with the Due Process clause. Under its earlier decision, the Court explained, BNSF Railway can only be sued in Montana if it is “at home” there – something which normally means that the company is either incorporated in the state or has its principal place of business there.

With neither of those criteria met, the railroad was not so “heavily engaged in activity” in Montana as to present the kind of “exceptional” case in which jurisdiction could exist even outside the company’s state of incorporation and principal place of business. Thus, although BNSF could be sued in Montana for claims that are related to its business in Montana, it could not be sued there for claims that aren’t related to anything it did within the state.


The Court’s two defense-friendly decisions on jurisdiction should bode well for defendants challenging jurisdiction, even in cases outside these specific factual contexts. General jurisdiction can only exist where a defendant is actually “at home,” and creative efforts – such as California’s “sliding scale” – will not pass constitutional muster to establish specific jurisdiction without a clear connection, such as a wrongful act, actually occurring in the forum state.

Some Pitfalls of the Newly Amended Federal Rules of Civil Procedure

The upcoming amendments to the Federal Rules of Civil Procedure contain a number of pitfalls for the unwary federal court practitioner. Just about the biggest mistake a practitioner could make in 2016 would be to use his or her tried and true discovery response template under the new regime.

For starters, it will now be a bad idea to respond to a Rule 34 document request by stating:

“Without waiver of or prejudice to these objections, Defendant produces the documents attached to this response.”

The recitation of this discovery mantra has maddened litigators and trial judges alike for years. The problem with this objection is that it does not communicate whether, having recited a litany of objections, the objector is producing all of its responsive documents or withholding documents pursuant to the objection. The amended rule seeks to address this uncertainty.

shutterstock_188181785Under the amended rule, the use of broad boilerplate objections that do not state whether responsive documents are being withheld subject to an objection is now prohibited. The amendment to Rule 34 now provides that objections have to be stated “with specificity.” Therefore, it is not enough to merely state that a request is overly broad or vague and ambiguous. It is now the obligation of the responding party to state, for example, that it will limit the search for documents or ESI within a given stated time period. Playing coy with the adversary by not communicating the scope of the production should no longer be acceptable.

Another new Rule 34 wrinkle is that a litigant may now serve a Rule 34 request in advance of the Rule 26(f) conference. Although the adversary’s time to respond to the Rule 34 request will not start to run until 30 days after the conference, the early service of a document requests provides the parties the opportunity to discuss document production issues prior to the Rule 26(f) conference, if possible, but certainly before the Rule 16 conference. Being able to discuss document production issues at an early stage in the litigation can avoid discovery disputes later on, particularly if the court weighs in on some of the issues under discussion at the Rule 16 hearing.

Litigation Tip. From a defense perspective, keep in mind that plaintiffs will be on the lookout for defendants’ responses that do not contain the requisite specificity. The flip side is that if defense counsel specifies the basis for an objection and makes a limited production, the plaintiff runs the risk of waiving his objection to the limited scope of the production if he fails to act with alacrity.

The 2015 amendments to the Federal Rules of Civil Procedure amend Rules 1, 4, 16, 30, 31, 33, 34, 37 and 55. Rather than tackle all of the amended rules in a single article, this will be a continuing series of articles about the new regime and how practitioners can avoid compliance pitfalls.