Recent U.S. Supreme Court Decision Could Boost Texas Businesses

Experienced Attorneys Helping Sugar Land, Texas Businesses with Business Litigation Matters

One of the significant strengths of the American economy is its federalism, combining a central or “federal” government, with state and local systems. Within certain limits, states are free to experiment with different forms and measures of laws and regulations. Over time, some states have taken on rather different characteristics, particularly with regard to the climate surrounding business litigation.

Texas is a “Business-Friendly” State

For example, some states, like Texas, are quite business-friendly, while others—think California—have become hotbeds for products liability suits and other forms of tort litigation. The result can allow for a type of “forum shopping”—where plaintiffs, hoping for a congenial courtroom, file suit against a Texas business in a state that has little, if any, connection to the alleged harm. The Texas business is left to battle it out in a location far removed from its primary operation. A recent decision by the U.S. Supreme Court, Bristol-Myers Squibb Co. v. Superior Court of California, may well stem the tide of this sort of courtroom shopping, however. The decision may also provide additional incentives for businesses to locate or expand their operations in business-friendly “climates” such as Texas.

The Bristol-Myers Squibb Litigation

In the Bristol-Myers Squibb (BMS) litigation, plaintiffs’ attorneys filed hundreds of claims in California relating to Plavix®, a blood thinner prescribed to help prevent heart attacks and strokes. The clear majority of the plaintiffs resided in states other than California. Most had never taken Plavix in California, nor did they have any important connection to that state. BMS did sell Plavix in California, of course, but nothing tied the plaintiffs together, other than that they sought a friendly jurisdiction within which to sue BMS.

BMS contended that, under these circumstances, it was unfair that the bulk of the litigation takes place in California and the U.S. Supreme Court agreed. Under the 8–1 decision issued June 19, 2017, there must be a true connection between the lawsuit and the forum; a Texas plaintiff, for example, cannot sue in California simply because that’s a more plaintiff-friendly forum.

California Isn’t the Only Plaintiff-Friendly State Effected by Decision

Business litigation specialists point out that California isn’t the only forum where plaintiffs “shop.” Some report that as many as 95% of the mass tort claims filed in Philadelphia involve out-of-state plaintiffs with no ties to Pennsylvania. In her dissent, Justice Sotomayer wrote that the effect of the Court’s opinion was to curtail—perhaps even eliminate—plaintiff’s ability to hold corporations fully accountable. According to the majority opinion, however, to the extent that the plaintiffs have a legitimate case, they can still file it; they just can’t shop around for the friendliest location to do so.

High Court Decision Applies to All Cases, Not Just Products Liability

It is important to note that the decision applies to all cases—not just mass torts and products liability claims. Texas businesses that find themselves sued outside of the Longhorn State by a nonresident plaintiff may be successful in at least moving the case back to Texas.

Romano & Sumner: Business Litigation Experts

Texas BarToday Top Ten BadgePaul Romano & Kenny Sumner have more than 20 years of combined experience in business law and business litigation. They have helped countless business owners maneuver through the complicated world of regulation, restriction, and law. They provide service that is appropriate to the problem, no matter what your core business litigation needs.

If you are involved in a business dispute that may lead to litigation, rest assured that the law firm of Romano & Sumner is committed to providing clear answers to difficult questions. We answer questions in a language that you can understand. We provide individualized attention to your situation; we are strong advocates for your cause. We respond promptly to phone calls and email communications. Call us at 281–242–0995 or complete our online contact form.

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    Romano & Sumner, PLLC

    Romano & Sumner, PLLC