Commercial Litigation

Missouri Appeals Court Vacates $72 Million Verdict for Lack of Personal Jurisdiction

Missouri Appeals Court Vacates $72 Million Verdict for Lack of Personal Jurisdiction

In a significant defense win applying recent U.S. Supreme Court precedent, a Missouri appeals court reversed and vacated a $72 million judgment for lack of personal jurisdiction. Estate of Jacqueline Fox v. Johnson & Johnson, et al. (Mo. Ct. App. Oct.17, 2017). The court ruled that under Bristol-Myers Squibb Co. v. Superior Court of California, 137 S.Ct. 1773 (2017), the trial court improperly exercised personal jurisdiction over a non-resident plaintiff’s claims, even though they were joined with claims of Missouri plaintiffs alleging similar injuries. The court dismissed the case with prejudice, rejecting plaintiff’s request to conduct additional discovery aimed at establishing personal jurisdiction.

Sixty five individual plaintiffs filed suit alleging that they developed ovarian cancer after using the out-of- state defendants’ talcum powder products. Two of the plaintiffs were Missouri residents. The other sixty three plaintiffs bought and used the defendants’ products in other states. They joined their claims under a Missouri procedural rule allowing joinder of non-residents’ claims with those of Missouri residents arising out of the same transactions or occurrences.

The trial court denied the defendants’ motion to dismiss the non-resident’s claims for lack of personal jurisdiction, finding that the defendants had sufficient minimum contacts with the state and that the non-resident plaintiffs were not each required to establish an independent basis for jurisdiction. The claims of one of the non-resident plaintiffs, Ms. Fox, were then tried individually. The jury returned a verdict for Fox of $10 million in compensatory damages and $62 million in punitive damages. Johnson & Johnson appealed, asserting lack of personal jurisdiction because Fox’s claims did not arise out of any conduct of the defendants in Missouri.

The Missouri appeals court reversed based on the Supreme Court’s decision in Bristol-Myers Squibb that was issued in June 2017 while the appeal was pending. The Court in Bristol-Myers Squibb held that, for there to be specific personal jurisdiction, there must be a connection between the forum state and the particular plaintiff’s claims. Otherwise, “specific jurisdiction is lacking regardless of the extent of a defendant’s unconnected activities in the state,” and regardless of whether the claims are joined with those of resident plaintiffs who sustained similar injuries. 137 S.Ct. at 1781. There was no such connection here between Fox’s claims and the state of Missouri.

The court also rejected plaintiff’s request to remand and allow discovery aimed at establishing jurisdiction under the Bristol-Myers Squibb standard. It stated that, even if Bristol-Myers Squibb represents a change in the law, there was no authority supporting plaintiff’s request to re-open discovery in light of the advanced posture of the case. A concurring opinion went a step further, concluding that Bristol-Myers Squibb did not establish new rules for personal jurisdiction, but instead was a “reaffirmation of the traditional rules of personal jurisdiction” set out in the Supreme Court’s 2014 opinion in Daimler AG v. Bauman, 134 S.Ct. 746—which was argued by the parties before the trial court—and even earlier in International Shoe Co. v. Washington, 326 U.S. 310 (1945).

In the concurring judge’s view, Fox had “ample opportunity” to present additional evidence to the trial court, but failed to do so. The appeals court ruling indicates that other verdicts obtained by non-resident plaintiffs in Missouri and elsewhere may be reversed. As state courts apply Bristol-Myers Squibb, plaintiffs will be forced to pursue their claims either in the state where their injury arose or in the defendants’ home state. The decision also highlights the importance of preserving objections to personal jurisdiction, particularly in class actions and mass tort cases.