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Potential Implications of Bristol-Myers Squibb Co. v. Superior Court and BNSF Ry. v. Tyrrell on Mass Tort Litigation in Pennsylvania

March 1, 2018

Defense Digest, Vol. 24, No. 1, March 2018

By Christian Weimann, Esq.*

Key Points:

  • In recent years, Pennsylvania has been a hospitable jurisdiction for forum-shopping, mass-tort plaintiff attorneys.
  • Under new and binding United States Supreme Court precedent, foreign corporation defendants may persuasively argue that a Pennsylvania court should grant a defendant’s preliminary objections based on lack of personal jurisdiction.
  • There are many potential consequences that may arise from the pursuit of such dismissal.

 

In January 2014, in Daimler AG v. Bauman, 134 S. Ct. 746 (U.S. 2014), the United States Supreme Court held that in deciding whether jurisdiction exists over a foreign corporation, the relevant inquiry is whether the foreign corporation’s affiliations with the forum state are so continuous and systematic as to render the foreign corporation “at home” within the forum state. The Daimler court further held that asserting general jurisdiction over a foreign corporation is proper when the foreign corporation’s contacts with the forum state are not just continuous and systematic, but “[s]o constant and pervasive so as to render the [foreign corporation] essentially at home in the forum state.” The court found that more is required than merely a “substantial, continuous, and systematic course of business.”

Following the United States Supreme Court’s Daimler ruling, federal district courts in Pennsylvania issued over thirty opinions interpreting Daimler and inserting the “essentially at home” paradigm into the general jurisdiction evaluation. In two cases, Pennsylvania federal district courts explicitly rejected the “consent by registration” theory as a basis for jurisdiction over foreign corporations in the absence of a showing that the foreign corporation was “essentially at home” in Pennsylvania. Manley v. Premium Spray Prods., Inc., 2015 U.S. Dist. LEXIS 42485 (E.D. Pa. Mar. 31, 2015); Farber v. Tennant Truck Lines, Inc., 84 F. Supp. 3d 421 (E.D. Pa. 2015). Then, in 2017, the United States Supreme Court issued its rulings in Bristol-Myers Squibb Co. v. Superior Court, 137 S. Ct. 1773 (U.S. 2017) and BNSF Ry. v. Tyrrell, 137 S. Ct. 1549 (U.S. 2017). In Bristol-Myers, the United States Supreme Court held that specific jurisdiction did not exist where non-resident plaintiffs purchased a product outside of the forum state, ingested the product outside of the forum state, and suffered injuries outside of the forum state. In BNSF, the United States Supreme Court held that general jurisdiction did not exist where a foreign railroad corporation operated more than 2,000 miles of railroad tracks, employed more than 2,000 employees, and maintained an automotive facility within the forum state.

In recent years, Pennsylvania has been a hospitable jurisdiction for forum-shopping, mass-tort plaintiff attorneys. Repeatedly, forum-shopping, mass-tort plaintiff attorneys have filed cases in Pennsylvania against both foreign and domestic corporate defendants when these cases have no relation whatsoever to Pennsylvania. Frequently, the plaintiff resided out of state, the alleged injury occurred out of state, all of the plaintiff’s medical treatment occurred out of state, and the plaintiff had never even visited Pennsylvania. Logic would dictate that these cases belong in the state where the plaintiff resides and/or the state in which the alleged injury occurred, right? Well, until very recently, forum-shopping, mass-tort plaintiff attorneys could circumvent reason under two separate theories.

First, forum-shopping, mass-tort plaintiff attorneys have successfully argued that jurisdiction exists in Pennsylvania over a foreign corporation if that foreign corporation carries on a continuous and systematic part of its general business within the Commonwealth. Alternatively, forum-shopping, mass-tort plaintiff attorneys have argued that a foreign corporation consents to Pennsylvania’s jurisdiction if that foreign corporation has filed a registration statement in Pennsylvania, which is required by Pennsylvania statute. As a consequence of its “qualification as a foreign corporation,” a separate Pennsylvania statute provides that Pennsylvania has jurisdiction over that foreign corporation.

Now, with the existence of new, binding United States Supreme Court precedent in Bristol-Myers and BNSF, foreign corporate defendants sued by forum-shopping, mass-tort plaintiff attorneys in Pennsylvania may persuasively argue that the United States Supreme Court no longer considers the mere act of doing business within the forum state sufficient to create general jurisdiction, and, accordingly, a Pennsylvania court should grant a foreign corporate defendant’s preliminary objections based on lack of personal jurisdiction. In so ruling, however, an entirely new can of worms may be opened up, which may lead to the need to consider many possible new scenarios.

For example, a forum-shopping, mass-tort plaintiff attorney could sue both foreign and domestic corporate defendants in a Pennsylvania action. The foreign defendants may file preliminary objections based on lack of personal jurisdiction pursuant to Bristol-Myers and BNSF. If the foreign defendants’ preliminary objections based on lack of personal jurisdiction are granted, the foreign defendants would be dismissed from the Pennsylvania action, while the domestic corporate defendants would remain. The plaintiff’s attorney may then file a new complaint against the dismissed defendants in the appropriate state, and for a time, the two actions could proceed simultaneously in both Pennsylvania and the appropriate state. However, the defendants in both the Pennsylvania action and the appropriate state’s action could fairly argue that indispensable parties had not been joined to their particular action and, therefore, that their particular action should be dismissed or any final determination would be unconscionable.

Additionally, under the doctrine of res judicata, or claim preclusion, where there is a final judgment on the merits, future litigation on the same cause of action is prohibited. Accordingly, if final judgment were to be reached in one of the two jurisdictions, the plaintiff would be prohibited from continuing to litigate the remaining action.

These are just a few of the potential scenarios and consequences of a defendant’s pursuit of dismissal for lack of personal jurisdiction. However, there may be others that arise as the recent decisions are interpreted in mass tort cases that involve numerous defendants.

*Christian is an associate in our Philadelphia, Pennsylvania office. He can be reached at 215.575.2737 or caweimann@mdwcg.com.

 

Defense Digest, Vol. 24, No. 1, March 2018. Defense Digest is prepared by Marshall Dennehey Warner Coleman & Goggin to provide information on recent legal developments of interest to our readers. This publication is not intended to provide legal advice for a specific situation or to create an attorney-client relationship. ATTORNEY ADVERTISING pursuant to New York RPC 7.1. © 2018 Marshall Dennehey Warner Coleman & Goggin. All Rights Reserved. This article may not be reprinted without the express written permission of our firm. For reprints, contact tamontemuro@mdwcg.com.

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