U.S. Supreme Court to review California ruling against pharmaceutical firm
The court has agreed to take up a case involving Bristol-Myers Squibb, which asked for a hearing after the California Supreme Court ruled a class action could continue despite the vast majority of the hundreds of plaintiffs living outside the state.
Defendants are claiming injuries arising from their use of Plavix, a prescription medicine used to inhibit blood clotting after a heart attack or stroke
Of 678 plaintiffs in the Bristol-Myers Squibb case, only 85 are from California..
Those numbers reflect the findings in a study by the Civil Justice Association of California (CJAC). The tort reform group found that only 10 percent of plaintiffs in 2,919 cases against pharmaceutical companies during a 64-month period were from California. Of the 25,503 plaintiffs, non-Californians comprised 89.9 percent of those represented in these product liability cases.
In 67 percent of the cases the CJAC studied, there were no California plaintiffs.
CJAC President John Doherty said the reason the study was carried out was because it was believed plaintiffs from other parts of the country were taking advantage of the state court system. This was borne out by research, he said.
“The court system is already overburdened and struggling to give California residents their own day in court,” Doherty told American Pharmacy News.
Reform advocates hoped the California Supreme Court would rule in favor of Bristol-Myers Squibb, but last August it ruled 4-3 against the company, arguing the corporation advertised and sold $1 billion in products per year within California. Bristol-Myers Squibb also has offices and employees working in the state.
In January, the U.S. Supreme Court issued a writ of certioari, essentially asking the California court to explain the reason behind the decision.
The high court is also reviewing a similar state supreme court ruling out of Montana, again with a pharmaceutical company as a defendant.
Doherty believes California is an attractive place for plaintiffs because there is a history of large awards being made in the state.
The issue of jurisdiction is based on how engaged a defendant or plaintiff is in a particular state. But the rules and laws were drawn up many years ago, before companies developed a national or global reach, Doherty said.
He believes these factors should be taken into account and that jurisdiction should be studied and monitored.
“Plaintiffs should not be able to go where the potential pay out may be the best,” Doherty said.
He believes changes could be made, via the legislature or court rules.
In a dissenting opinion in the Bristol-Myers Squibb case, California Supreme Court Associate Justice Kathryn Werdegar said that because California is so large, any company selling a product or service nationwide, regardless of where it is headquartered, is likely to do a substantial part of its business in California.
"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,” Werdegar wrote.