Supreme Court Limits Out-of-State Residents Joining Class Actions

The U.S. Supreme Court gave companies a new tool to defeat some legal claims, siding with Bristol-Myers Squibb Co. in a bid to limit a consumer lawsuit in California over its Plavix blood thinner.

The justices, voting 8-1, said the California Supreme Court was wrong to let almost 600 non-Californians join 86 state residents in claiming Bristol-Myers misrepresented the risk of heart attacks and strokes.

The case tested the constitutional power of state courts to adjudicate suits by non-residents when the alleged wrongdoing occurred elsewhere.

The majority said the out-of-state plaintiffs hadn’t shown enough of a connection between their alleged injuries and the company’s activities in California.

The out-of-state people argued it made sense for their cases to go forward in California because the courts there were already considering identical claims by state residents.

Writing for the court, Justice Samuel Alito said the plaintiffs could sue Bristol-Myers together in other states, including New York, where the company has its headquarters, and Delaware, where it is incorporated.

The ruling “will not result in the parade of horribles that respondents conjure up,” Alito wrote, referring to the plaintiffs.

In dissent, Justice Sonia Sotomayor said the ruling “may make it impossible to bring certain mass actions at all.”

The case is Bristol-Myers Squibb v. Superior Court, 16-466.