Law

            Spring seems to be finally here in the mid-Atlantic region and we could think of nothing better to usher in spring than some personal jurisdiction and procedural wrangling.  Every year, we see new cases with multiple plaintiffs thrown together filed in places the plaintiff lawyers want to litigate.  Laws are enacted and big cases are decided that should curtail this practice, yet the cases keep popping up like longer-lasting and worse-smelling crocuses.  The options available to defendants to break up, remove, transfer, or dismiss some or all of these multi-plaintiff state court actions have grown, but the plaintiff lawyers keep coming up with arguments for why their cases should stay put in the form and forum of their choosing.  The case we are discussing today rejects one of the major recent arguments from the plaintiff lawyers to try to impose personal jurisdiction where it should not exist—"pendent jurisdiction."  Combined with the recent defense win on "jurisdiction by consent," 2016 is starting out pretty well on this front.

            When Daimler AG v. Bauman, 134 S. Ct. 746 (2014), came down, it was clearly a big deal for our clients, which tend to be regular targets of the type of cases mentioned above.  We talked about Bauman's implications—like here, here, and here–and eventually even accorded it the honor of its own cheat sheet.  Drug and device manufacturers usually sell their products around the country, typically register to do business or accept process in many states, and often have employees and facilities in several states, which are just some of the things that count as contacts under traditional formulation of general personal jurisdiction.  So, a Supreme Court decision that essentially limited general personal jurisdiction to those states where the company was incorporated or maintains its principal place of business would have obvious implications for bulk litigation tourism.  The decision a month later in Walden v. Fiore, 134 S. Ct 1115 (2014), got less attention here, but we have talked about it in other fora and it matters too.  Walden deals with the specific side of personal jurisdiction, likewise narrowing the scope of states that can hear a dispute without violating Due Process by focusing the inquiry on "suit-related conduct" by the defendant.  If the state cannot exercise general jurisdiction over an unwilling defendant and it cannot exercise specific jurisdiction over the case, then dismissal is appropriate.  The plaintiff(s) may end up re-filing somewhere with personal jurisdiction, but dismissal is clearly a setback.

            Under the typical multi-plaintiff state court action plan, there should be at least two plaintiffs in the bundle to try to anchor the case to the state and keep the case out of federal court.  At least one plaintiff will be from the state—preferably county, because intra-state transfer is a thing—where the lawyers want to sue, so that there is some plausible reason to be there.  And at least one plaintiff will be from the same state where the defendant is actually based, so that there will not be complete diversity if all the parties count.  (We will set aside CAFA, fraudulent joinder of local defendants, and some of the other moves that recur in this little paso doble.)  Before Bauman and Walden, when trying to move or remove one of these anchored conglomerations, it was a struggle to focus courts on the allegations and facts related to the non-local plaintiff(s).  In the nascent era of tighter personal jurisdiction, the plaintiffs have convinced some courts that there should not be such a focus at all and they have deemed it "pendent jurisdiction."

            In re Testosterone Replacement Therapy Prods. Liab. Litig., __ F. Supp. 3d __, 2016 WL 640520 (N.D. Ill. Feb. 18, 2016), rejects the "pendent jurisdiction" argument, which allowed the case to remain in federal court as to the remaining diverse plaintiffs.  This case is noteworthy because, as far as we can tell, it is the first MDL court in a drug or device case to address this argument and squarely reject it.  Before we get to the merits of personal jurisdiction, we have a slight detour into the procedural wrangling.  The case was brought in Missouri state court with one Missouri resident and plaintiffs from eight other states, one of which was Illinois, where defendants have their principal place of business.  The case was removed to the Eastern District of Missouri and sent by the JPML to the MDL court in the Northern District of Illinois.  That trip up I-55 crossed over from the Eighth Circuit to the Seventh Circuit, so there might have been a difference in the applicable federal procedural law and that might have mattered because cases accepting "pendent jurisdiction" were from lower courts in the Eighth Circuit.  Without controlling law from either Circuit, however, the court did not need to decide whether to deviate from the normal rule that the procedural law of the MDL court's Circuit applies.  Id. at *2.  The next procedural issue was whether the court could decide personal jurisdiction before deciding subject matter jurisdiction, which was a matter of diversity.  The decision in Ruhrgas AG v. Marathon Oil Co., 526 U.S. 574, 587-88 (1999), is often cited as allowing just such an ordering of decisions, but the plaintiffs here argued to the contrary.  They claimed that the lack of complete diversity per their complaint was a simple issue that should be decided first, negating any need to ever reach the complicated issues of personal jurisdiction.  With some quotable language, the court was not willing to ignore the fraudulent joinder (or fraudulent misjoinder) issue in a rush to rule on diversity first.  2016 WL 640520, **3-4.

            On personal jurisdiction, perhaps cowed by Bauman (which is not even cited), the plaintiffs did not even contend that the Missouri court had general jurisdiction over the Illinois defendants.  Instead, they claimed that the uncontested specific jurisdiction that the state had over the claim of the Missouri resident allowed jurisdiction to append to the claims of the other plaintiffs, including the one from Illinois who was intended to defeat diversity.  Relying on International Shoe, the court held that "the specific personal jurisdiction inquiry in this case must be conducted separately for the claims of each individual plaintiff."  Id. at *4.  The Illinois plaintiff did not allege anything suggesting his claims arose from the defendant's conduct in Missouri, so he urged that the Missouri plaintiff's specific jurisdiction could still be imputed to him if their claims were properly joined and arose "out of the same series of transactions or occurrences."  Id. at *5.  This argument was predicated on an implausibly narrow interpretation of both Walden and Keeton v. Hustler Magazine, Inc., 465 U.S. 770 (1984), another hornbook personal jurisdiction case.  Neither decision "suggests that a court may exercise jurisdiction over a plaintiff's claims against a defendant where those claims are unrelated to the defendants' activities within the forum state."  2016 WL 640520, *5.  Keeton allowed personal jurisdiction over a defendant based on contacts with New Hampshire that allegedly produced injury in New Hampshire.  Walden rejected personal jurisdiction in Nevada (our addition to the facts) based solely on the plaintiffs' contacts with the forum state.  So, neither was informative on the personal jurisdiction issue here.  Relying on Circuit court decisions requiring personal jurisdiction for each claim on its own, the court rejected the notion that there is a "pendent jurisdiction" doctrine in this area at all.  Id.  This is a major defeat for those who shop for forum.

            The court then looked at plaintiff's jurisdictional allegations, which should seem familiar to anyone who has read such complaints, to see if the claims of the Illinois and Missouri plaintiffs allegedly arose from the same transaction or occurrence.  By making allegations about the marketing of the drug in each state, the allegations did "so only in the abstract or by analogy."  Id.  We think the same can be said for most cases like this, where the forum choice is driven by what the plaintiff lawyers want, not where defendants acted in a way that even plausibly affected the litigation tourists.

Under the theory plaintiffs propose, the alleged sale and promotion of AndroGel within Missouri, which allegedly caused a Missouri plaintiff's injury, would subject defendant to general personal jurisdiction in Missouri for claims brought by any plaintiff who allegedly suffered injury by purchasing and using AndroGel anywhere in the country.  Such a result would be plainly contrary to 'traditional notions of fair play and substantial justice."

Id. at *6 (quoting (Int'l Shoe).  This is reminiscent of the rejection in Bauman  of that plaintiff's "grasping" and "exorbitant" jurisdictional arguments.  134 S. Ct. at 761.  In addition, because the "plaintiffs' claims are likely to be tried separately"—suggesting the joinder part of the "pendent jurisdiction" formula was not met anyway—it would not make sense for the Illinois plaintiff's case to be tried before a Missouri jury without "any evidence related to Missouri."  2016 WL 640520, *6.  "It would thus be unfair and contrary to the rationale underlying the minimum contacts doctrine to allow plaintiffs to use the Missouri plaintiff's claims as a hook to reel defendants into a series of separate trials in a distant and inconvenient forum to try issues unrelated to their conduct within the forum."  Id.  In addition to its angling imagery, this quote suggests intolerance for litigation tourism in a number of the ways that it comes up.  For now, we will take the win on personal jurisdiction and look for other courts to follow.