IN THE Supreme Court of the United States

Transcription

1 No. IN THE Supreme Court of the United States BARR PHARMACEUTICALS, LLC, ET AL., Petitioners, v. SUPERIOR COURT OF CALIFORNIA, SAN FRANCISCO COUNTY, ET AL., Respondents. On Petition for Writ of Certiorari to the Superior Court of California, County of San Francisco PETITION FOR WRIT OF CERTIORARI WILLIAM M. JAY GOODWIN PROCTER LLP 901 NEW YORK AVE., N.W. WASHINGTON, DC (202) Counsel for Teva Pharmaceuticals USA, Inc. March 24, 2016 JEFFREY F. PECK Counsel of Record LINDA E. MAICHL ULMER & BERNE LLP 600 VINE ST. SUITE 2800 CINCINNATI, OH (513) Counsel for PLIVA, Inc., and Barr Pharmaceuticals, LLC

2 QUESTION PRESENTED The personal-jurisdiction rights of corporate defendants are not extinguished by state laws that coordinate hundreds, sometimes thousands, of cases before one judge. Yet, that is exactly what happened here. California, like other states, has a procedure that allows many cases to be bundled together before one court for purposes of efficiency and administrative ease. Plaintiffs increasingly have used state-court coordination procedures to aggregate the claims of plaintiffs from throughout the United States in mass tort proceedings in a single state. However, doing so raises due process concerns under the Fourteenth Amendment by subjecting defendants to the coercive power of a court that lacks jurisdiction over them. This case involves a state court that lacks either specific or general jurisdiction over defendants in well over a thousand individual actions but has employed state coordination proceedings and an unprecedented theory of waiver to establish personal jurisdiction over those defendants without conducting a due process analysis. The question presented is: When a state court lacks personal jurisdiction over many cases against a defendant, and the state court combines those cases with other cases into a coordination proceeding, does the Due Process Clause prohibit the state from deeming the personal-

3 ii jurisdiction defense waived merely because the defendant participates in the coordination proceeding, absent a knowing, voluntary, and intentional waiver of the defense?

4 iii PARTIES TO THE PROCEEDING Petitioners are Barr Pharmaceuticals, LLC (f/k/a Barr Pharmaceuticals, Inc.), PLIVA, Inc., (f/k/a Sidmak Laboratories, Inc.), and Teva Pharmaceuticals USA, Inc. ( Teva USA ). All were defendants below. Respondents are listed in the Addendum attached hereto. They all were plaintiffs below. RULE 29.6 STATEMENT Barr Pharmaceuticals, LLC, is a privately-held, wholly-owned subsidiary of Teva USA which in turn is directly owned by (i) Orvet (Majority Shareholder), which in turn is directly owned by Teva Pharmaceuticals Europe B.V. ( Teva Europe ), which in turn is directly owned by Teva Pharmaceutical Industries Ltd. ( Teva Ltd. ); and (ii) Teva Pharmaceutical Holdings Coöperatieve U.A. (Minority Shareholder) ( Teva Holdings ), which in turn is directly owned by IVAX LLC, a direct subsidiary of Teva USA. Teva Ltd. is the only publicly-traded company that owns 10% or more of Barr Pharmaceuticals, LLC. Teva Ltd. has no parent company, and no publicly-traded company owns 10% or more of Teva Ltd. PLIVA, Inc., is an indirect wholly-owned subsidiary of Teva Ltd., through the following parent companies: Barr Laboratories, Inc., which in turn is directly owned by Barr Pharmaceuticals, LLC, f/k/a Barr Pharmaceuticals, Inc., which in turn is directly owned by Teva USA. Teva Ltd. is the only publiclytraded company that owns 10% or more of PLIVA, Inc.

5 iv Teva USA is directly owned by (i) Orvet UK (Majority Shareholder), which in turn is directly owned by Teva Europe, which in turn is directly owned by Teva Ltd.; and (ii) Teva Holdings, which in turn is directly owned by IVAX LLC, a direct subsidiary of Teva USA. Teva Ltd. is the only publicly-traded company that owns 10% or more of Teva USA.

6 v TABLE OF CONTENTS QUESTION PRESENTED... i PARTIES TO THE PROCEEDING... iii RULE 29.6 STATEMENT... iii INTRODUCTION... 1 OPINIONS BELOW... 4 JURISDICTION... 4 CONSTITUTIONAL AND STATUTORY PROVISIONS INVOLVED... 5 STATEMENT OF THE CASE... 6 A. CALIFORNIA S JUDICIAL COUNCIL COORDINATED PROCEEDINGS... 6 B. PROCEDURAL AND FACTUAL BACKGROUND California Resident Plaintiffs Petition the California Judicial Council to Establish a JCCP 8 2. The JCCP Court Focuses on Organizational Issues and Procedures The JCCP Court Decides to Address the Impact of PLIVA, Inc. v. Mensing and Defer Consideration of Personal Jurisdiction Defenses The JCCP Court Turns Its Attention to Personal- Jurisdiction Challenges REASONS FOR GRANTING THE WRIT... 19

7 vi A. A STATE MAY NOT USE MASS TORT COORDINATION PROCEDURES TO AVOID A DUE PROCESS ANALYSIS B. A STATE CANNOT USE COMPULSORY PARTICIPATION IN MASS TORT PROCEEDINGS AS A BASIS FOR FINDING WAIVER OF FUNDAMENTAL CONSTITUTIONAL RIGHTS C. A COURT MAY NOT MANUFACTURE CONSENT TO THE COURT S EXERCISE OF PERSONAL JURISDICTION D. DUE PROCESS REQUIRES NOTICE OF CONDUCT THAT MAY RENDER DEFENDANTS SUBJECT TO JURISDICTION AND STATE-LAW PROCEDURES CANNOT AND DO NOT SUPPLANT THAT REQUIREMENT CONCLUSION ADDENDUM - Real Parties in Interest... Add. 1 APPENDIX Appendix A - Order in the Supreme Court of California, Bowman, et al., Case No. S (November 10, 2015)... App. 1 Appendix B - Order in the Supreme Court of California, JCCP 4631, et al., Case No. S (November 10, 2015)... App. 2 Appendix C - Order in the Court of Appeal of the State of California, First Appellate District, Division One, Bowman, et al., Case No. A (August 19, 2015)... App. 3 Appendix D - Order in the Court of Appeal of the State of California, First Appellate District,

8 vii Division One, JCCP 4631, et al., Case No. A (August 19, 2015)... App. 5 Appendix E - Notice of Entry of Judgment or Order and Order Denying Defendants Teva Pharmaceuticals USA, Inc., Pliva, Inc., and Barr Pharmaceuticals, LLC s Motions to Quash Service of Summons in Bowman Action in the Superior Court of California, County of San Francisco, Bowman, et al., Case No. CGC (June 4, 2015)... App. 7 Appendix F - Notice of Entry of Judgment or Order and Order Granting Plaintiffs Motion for Determination that Generic Defendants Pliva and Teva Pharmaceuticals Waived Personal Jurisdiction Challenges in the Superior Court of California, County of San Francisco, Plaintiffs through Plaintiffs Liaison Counsel v. Pliva, et al., Case No. CJC (JCCP 4631) (June 4, 2015)... App. 13 Appendix G - Statutes and Rules... App. 18 Cal. Civ. P. Code App App App. 19 Cal. Rules of Court App App App App App. 24 Appendix H - Memorandum of Points and Authorities in Support of Generic Defendants Demurrer to Third Amended Long Form Master Complaint in the Superior Court of California, Case No. CJC-10-

9 viii (JCCP 4631) Excerpt (May 2, 2014)... App. 26 Appendix I - Memorandum of Points and Authorities in Support of Generic Defendants Demurrer to Second Amended Long Form Master Complaint in the Superior Court of California, Case No. CJC (JCCP 4631) Excerpt (November 18, 2013)... App. 29 Appendix J - Notice of Entry of Order CMO 3: Master Complaint and Master Answer; Short Form Complaint and Short Form Answer as to Brand Defendants in the Superior Court of California, Case No. CJC (JCCP 4631) (July 9, 2012)... App. 32 Appendix K - Notice of Demurrer and Demurrer of Generic Defendants to First Amended Long Form Master Complaint in the Superior Court of California, Case No. CJC (JCCP 4631) Excerpt (April 17, 2012)... App. 58 Appendix L - Motion to Revoke Leave to File an Amended Complaint or to Strike Plaintiffs Master Long Form Complaint as to Generic Defendants; Memorandum of Points and Authorities; Request for Judicial Notice; Compendium of Non-California Authorities in Support thereof; [Proposed] Order in the Superior Court of California, Case No. CJC (JCCP 4631) Excerpt (December 12, 2011)... App. 61 Appendix M - Amended CMO 1: Appointment of Liaison Counsel, Jurisdiction and Stay of Discovery in the Superior Court of California,

10 ix Case No. CJC (JCCP 4631) (July 26, 2011)... App. 64 Appendix N - Notice of Entry of Order CMO 1: Appointment of Liaison Counsel, Jurisdiction and Stay of Discovery in the Superior Court of California, Case No. CJC (JCCP 4631) (April 26, 2011)... App. 66 Appendix O - Reporter s Transcript of Proceedings in the Superior Court of California, Case No. CJC (JCCP 4631) Excerpt (August 23, 2011)... App. 75 Appendix P - Reporter s Transcript of Proceedings in the Superior Court of California, Case No. CJC Excerpt (February 2, 2012)... App. 77 Appendix Q - Reporter s Transcript of Proceedings in the Superior Court of California, Case No. CJC Excerpt (April 17, 2012)... App. 80 Appendix R - Reporter s Transcript of Proceedings in the Superior Court of California, Case No. CJC Excerpt (September 6, 2013)... App. 82 Appendix S - Reporter s Transcript of Proceedings in the Superior Court of California, Case No. CJC Excerpt (February 11, 2014)... App. 84 Appendix T - Reporter s Transcript of Proceedings in the Superior Court of California, Case No. CJC Excerpt (February 26, 2015)... App. 86

11 x Appendix U - Reporter s Transcript of Proceedings in the Superior Court of California, Case No. CJC Excerpt (April 10, 2015)... App. 88

12 xi TABLE OF AUTHORITIES Cases Aetna Ins. Co. v. Kennedy ex rel. Bogash, 301 U.S. 389 (1937) Burger King Corp. v. Rudzewicz, 471 U.S. 462 (1985) Burnham v. Superior Court, 495 U.S. 604 (1990) Calder v. Jones, 465 U.S. 783 (1984)... 5 Chicago Life Ins. Co. v. Cherry, 244 U.S. 25 (1917) College Sav. Bank v. Florida Prepaid Postsecondary Educ. Expense Bd., 527 U.S. 666 (1999)... 23, 26 Cty. of Sacramento v. Lewis, 523 U.S. 833 (1998)... 2 Cox Broad. Corp. v. Cohn, 420 U.S. 469 (1975)... 5 Daimler AG v. Bauman, 134 S. Ct. 746 (2014)... 1, 18 Davis v. Wechsler, 263 U.S. 22 (1923)... 30, 32

13 xii Edelman v. Jordan, 415 U.S. 651 (1974) Emspak v. United States, 349 U.S. 190 (1955) Ford v. Georgia, 498 U.S. 411 (1991) Forsyth v. Hammond, 166 U.S. 506 (1897) Goodyear Dunlop Tires Operations, S.A. v. Brown, 131 S. Ct (2011)... 1, 18 Insurance Corp. of Ireland v. Compagnie des Bauxites, 456 U.S., 694 (1982)... 20, 27 Int'l Shoe Co. v. Washington, 326 U.S. 310 (1945)... 1, 22, 25 J. McIntyre Machinery, Ltd. v. Nicastro, 131 S. Ct (2011)... 2, 20, 25, 31 James v. Kentucky, 466 U.S. 341 (1984) Johnson v. Zerbst, 304 U.S. 458 (1938) Kulko v. Superior Court, 436 U.S. 84 (1978)... 5 McGhan Medical Corp. v. Superior Court, 11 Cal. App. 4th 804 (1992)... 6, 7

14 xiii Mich. Cent. R. Co. v. Mix, 278 U.S. 492 (1929) Nat'l Equip. Rental Ltd. v. Szukhent, 375 U.S. 311 (1964) Ohio Bell Tel. Co. v. Public Util. Comm'n of Ohio, 301 U.S. 292 (1937) Petrowski v. Hawkeye Security Ins. Co., 350 U.S. 495 (1956) PLIVA, Inc. v. Mensing, 131 S. Ct (2011) Shaffer v. Heitner, 433 U.S. 186 (1977)... 1 Smith v. United States, 337 U.S. 137 (1949) Wolff v. McDonnell, 418 U.S. 539 (1974)... 2 Statutes 28 U.S.C. 1257(a)... 4 Cal. Civ. Proc. Code Rules Cal. R. Ct Cal. R. Ct , 7 Cal. R. Ct

15 xiv Constitutional Provisions U.S. CONST. amend XIV, sec

16 INTRODUCTION Just five years ago, this Court reiterated that [a] state court s assertion of jurisdiction exposes defendants to the State s coercive power, and is therefore subject to review for compatibility with the Fourteenth Amendment s Due Process Clause. Goodyear Dunlop Tires Operations, S.A. v. Brown, 131 S. Ct. 2846, 2850 (2011) (citing Int l Shoe Co. v. Washington, 326 U.S. 310, 316 (1945)). These cases warrant just that review. The Due Process Clause precludes a state court from considering a case without personal jurisdiction. A state may not dodge the requirements of due process in individual cases through the expedient of administratively combining hundreds or thousands of cases in a mass-tort proceeding. Since this Court s canonical opinion in International Shoe Co. v. Washington, the touchstone of personal-jurisdiction analysis has been the relationship among the defendant, the forum, and the litigation. Daimler AG v. Bauman, 134 S. Ct. 746, 754 (2014) (quoting Shaffer v. Heitner, 433 U.S. 186, 204 (1977)). In other words, personal jurisdiction is defendant- and case-specific; a plaintiff who cannot establish personal jurisdiction cannot overcome that defect by hitching his case to a plaintiff who can. The same principle holds on a larger scale when a state administratively combines cases in which specific jurisdiction exists over a defendant with those in which personal jurisdiction is lacking. That administrative device cannot trump due process. Personal jurisdiction must be established in each case, whether the case is decided alone or with hundreds or thousands of others.

17 2 [T]he touchstone of due process is protection of the individual against arbitrary action of government. Cty. of Sacramento v. Lewis, 523 U.S. 833, 845 (1998) (quoting Wolff v. McDonnell, 418 U.S. 539, 558 (1974)). A key part of that guarantee is that those who live or operate primarily outside a State have a due process right not to be subjected to judgment in its courts as a general matter. J. McIntyre Machinery, Ltd. v. Nicastro, 131 S. Ct. 2780, 2787 (2011). The California court violated that principle by using an administrative-coordination mechanism to justify hearing a large number of cases over which it plainly lacks personal jurisdiction. That assertion of jurisdiction does not become any less unconstitutional just because it is made on a larger scale. Petitioners are out-of-state defendants that are not subject to general jurisdiction in California because they are incorporated and have principal places of business outside the state. They may be subject to the specific jurisdiction of California courts for product-liability claims brought by certain California plaintiffs with a sufficient California nexus. That specific jurisdiction, however, does not constitutionally extend to lawsuits by out-of-state plaintiffs with no connection to California, but which the state nevertheless has combined with the in-state plaintiffs lawsuits into one umbrella proceeding. But that is exactly the type of jurisdictional bootstrapping the California court applied. The proceedings below now include nearly two thousand plaintiffs, the majority of whom have sued Petitioners, and approximately 85% of whom are not residents of Cali-

18 3 fornia. Yet, the California court is asserting personal jurisdiction over Petitioners in 100% of the lawsuits. The California court stripped Petitioners of their right to challenge personal jurisdiction with respect to more than a thousand out-of-state plaintiffs. It held that by participating in the overarching coordination proceeding a proceeding Petitioners had to participate in, because it includes at least some jurisdictionally proper claims by California residents Petitioners had waived their constitutional rights in the individual cases. And it found that waiver despite Petitioners repeated and unequivocal reservations of all personal jurisdiction defenses; despite the court s and plaintiffs assurances that personaljurisdiction defenses to individual cases were preserved; and despite the constitutional limitations on waiver of fundamental rights. Without this Court s immediate review, Petitioners will be left without an avenue of redress 1 and will be forced to defend lawsuits that have no connection to the forum in a state court that does not have personal jurisdiction over them. This Court must intervene to make clear that courts may not sacrifice defendants due process rights at the altar of administrative convenience in mass tort actions. 1 Petitioners cannot seek review in California courts after final judgment. California courts take the position that Petitioners waive any right to later appeal personal jurisdiction and the court s decision asserting jurisdiction over Petitioners in individual non-resident cases is final if Petitioners defend themselves in the individual cases.

19 4 OPINIONS BELOW The California court entered the orders granting plaintiffs motion for a determination that Petitioners have waived their right to contest personal jurisdiction in more than a thousand cases, and denying Petitioners motion to quash for lack of personal jurisdiction on June 3, 2015, following a ruling from the bench. The orders are not published, but are reprinted in the Appendix at Petitioners thereafter sought discretionary review by the California Court of Appeal, which was denied on August 19, 2015, App. 3-6, and discretionary review by the California Supreme Court, which was denied on November 10, 2015, App Those denials are not published, but are reprinted in the Appendix at 3-6, 1-2. JURISDICTION The decisions under review were entered on June 3, App The California Court of Appeal and California Supreme Court denied discretionary review on August 19, 2015, and November 10, 2015, respectively. App On February 4, 2016, Justice Kennedy extended the time within which to file a petition for writ of certiorari in PLIVA, Inc. v. Superior Court, No. 15A815, to March 8, The same day, Justice Kennedy extended the time within which to file a petition for writ of certiorari in Barr Pharmaceuticals, LLC v. Bowman, No. 15A814 to March 24, Subsequently, on March 4, 2016, Justice Kennedy further extended the time to file a petition for writ of certiorari in PLIVA, Inc. v. Superior Court, No. 15A815, to March 24, 2016.

20 5 This Court has jurisdiction pursuant to 28 U.S.C. 1257(a). The Superior Court definitively rejected Petitioners personal-jurisdiction defense, and the state appellate courts denied discretionary review. Therefore, while the underlying cases will continue, the state courts will not revisit personal jurisdiction, and the decision below is a final decision under Section 1257(a), because it is a final [ruling] on the federal issue and is not subject to further review in the state courts. Cox Broad. Corp. v. Cohn, 420 U.S. 469, 485 (1975). See also Calder v. Jones, 465 U.S. 783, 788 n.8 (1984) (reviewing denial of motion to quash for lack of California court s jurisdiction over defendant); Kulko v. Superior Court, 436 U.S. 84 (1978) (same). CONSTITUTIONAL AND STATUTORY PROVISIONS INVOLVED The Due Process Clause of the U.S. Constitution provides: No state shall deprive any person of life, liberty, or property, without due process of law. U.S. CONST. amend XIV, sec. 1. The pertinent provisions of California s Civil Procedure Code and California Rules of Court pertaining to California s Judicial Council Coordinated Proceedings are reproduced in the Appendix, App

21 6 STATEMENT OF THE CASE A. CALIFORNIA S JUDICIAL COUNCIL COORDI- NATED PROCEEDINGS As do other states and federal courts, California has a process to coordinate lawsuits pending in different courts that share common questions of fact or law. In California that process is through California s Judicial Council Coordinated Proceedings ( JCCP ). Cal. Civ. Proc. Code 404. Like federal multi-district litigation ( MDL ), the purpose of state coordination proceedings is to promote the efficient use of judicial resources and to promote the ends of justice. See McGhan Medical Corp. v. Superior Court, 11 Cal. App. 4th 804, 811 (1992). A JCCP, however, is no more a case or action than an MDL; it is an administrative mechanism, and each lawsuit retains its individual character. To achieve the goals of coordination, the California legislature vested the Judicial Council with the power by rule to order the practice for coordinated actions notwithstanding any other provision of law. Id. at 812. If the Judicial Council s rules conflict with provisions of law applicable to civil actions generally, the Judicial Panel s rules prevail. Cal. Civ. P. Code 404.7; Cal. R. Ct (b). To initiate a coordination proceeding, either the presiding judge or all of the parties plaintiff or defendant may file a petition for coordination with the Judicial Council, which assigns a title and number to the coordination proceeding. Cal. Civ. Proc. Code 404. If the motion judge determines the standard

22 7 for coordination is satisfied, the Chairman of the Judicial Council designates a coordination trial judge ( coordination judge ) to hear and determine the coordinated actions in the site or sites the coordination judge selects. Cal. R. Ct All actions listed in the coordination petition, and all later add-on actions, are transferred to the coordination judge. The coordination judge is vested with all powers available to a judge presiding over the actions before coordination and is charged with taking an active role in managing all steps of the pretrial, discovery, and trial proceedings to expedite the just determination of the coordinated actions without delay. Cal. R. Ct , 3.541(b). The coordination judge is authorized to [o]rder any issue or defense to be tried separately and before the trial of the remaining issues when it appears the disposition of any of the coordinated actions might thereby be expedited. Id., 3.541(b)(3). The coordination judge also is authorized to direct the method and schedule for submission of preliminary legal questions that might expedite the disposition of the coordination proceedings. Id., 3.541(a)(4). In short, the coordination judge has the authority to address issues in the manner most likely to ease the logjam of cases through the judicial system, including the coordination of demurrer and motion practice to permit uniform and centralized resolution on appeal. McGhan, 11 Cal. App. 4th at 812, 814.

23 8 B. PROCEDURAL AND FACTUAL BACKGROUND 1. California Resident Plaintiffs Petition the California Judicial Council to Establish a JCCP In January 2009, California residents Terri Lynn and Jeffrey Elkins filed a lawsuit in the San Francisco County Superior Court of the State of California captioned Elkins v. Wyeth, Inc., Case No. CGC Petitioners PLIVA, Inc., and Teva USA were among the defendants named in the lawsuit. The Elkins alleged that Terri Lynn developed an involuntary movement disorder from her long-term use of the prescription medication Reglan, known generically as metoclopramide. That lawsuit proceeded along a normal course for more than one year. Then, after the federal Food and Drug Administration announced in February 2009 that it was directing that the labeling for Reglan and its generic metoclopramide equivalents be changed to add a black-box warning regarding tardive dyskinesia, long-term use, and total cumulative dose of the product, thousands of lawsuits were filed. Initially, the majority of lawsuits were filed in New Jersey and Pennsylvania, states in which some of the named defendants either are incorporated or have their principal place of business. Those lawsuits were assigned to a single judge for centralized case management under those states mass tort coordination procedures. In early 2010, the locus of the filings shifted to California. On May 24, 2010, the Elkins plaintiffs

24 9 filed a petition for coordination of their suit with the other lawsuits that had been filed in California state courts in early The next day, at a case management conference in Elkins, plaintiffs counsel raised the coordination of 21 existing lawsuits involving Reglan and metoclopramide with the presiding judge. The judge in Elkins issued an order staying all action in the case, as well as all action in the other 21 Reglan-metoclopramide lawsuits in San Francisco County Superior Court pending a decision on the coordination petition. On September 14, 2010, the coordination motion judge designated the cases as complex and recommended they be coordinated into a JCCP. The coordination petition was granted and the coordination trial judge was assigned on September 27, 2010, in JCCP No. 4631, In re Reglan/Metoclopramide Cases, San Francisco Superior Court Case No. CJC The JCCP Court Focuses on Organizational Issues and Procedures The first case management conference following coordination of the ever-growing JCCP (by then, 153 cases involving hundreds of plaintiffs) was on January 5, During that conference, the coordination judge discussed preliminary organizational issues and procedures to administer the JCCP efficiently and cost-effectively. Among the issues discussed was a method of determining which defendants were properly named in the various lawsuits and the implications of this Court s grant of the petition for writ of certiorari in PLIVA, Inc. v. Mensing. The coordi-

25 10 nation judge continued the stay in all cases precluding the filing of motions or other responsive pleadings in any case in the JCCP. Subsequent conferences in February and March 2011 again addressed administrative issues and organization of the JCCP. On April 25, 2011, the coordination judge entered Case Management Order No. 1 ( CMO1 ) appointing liaison counsel and delineating their responsibilities, asserting its jurisdiction over the coordinated proceedings, and continuing the stay in the lawsuits. (App ) CMO1 provided that the Order, and all case management and other orders of th[e] Court, shall be binding on all parties and their counsel in the [JCCP] No. 4631, Reglan/Metoclopramide Cases, including all cases currently in this proceeding and any cases subsequently added to this proceeding. (App. 58.) In addition, to preclude the continued actions by courts in other counties in cases pending their transfer to the JCCP, as is standard in JCCPs, and in recognition of the proceedings in New Jersey and Pennsylvania, CMO1 included the following provision: Jurisdiction. This Court retains sole and complete jurisdiction over the parties, cases and counsel in this coordinated proceeding, including each and every case filed in (or coordinated into) this coordinated proceeding. While cooperation between this Coordinated Proceeding and coordinated proceedings in other jurisdictions is encouraged, California remains a separate and independent jurisdiction. No party, however, waives any rights or obligations with regard to the conduct of discovery, trial

26 11 settings, and trials as allowed by California law and this Court. (App ) 3. The JCCP Court Decides to Address the Impact of PLIVA, Inc. v. Mensing and Defer Consideration of Personal Jurisdiction Defenses By the next conference in July 2011, 2 this Court had held in PLIVA, Inc. v. Mensing, 131 S. Ct (2011), that failure-to-warn lawsuits against generic drug manufacturers are preempted by federal law. For the first time since the JCCP s inception, the JCCP court and parties discussed filing motions or demurrers. The generic drug manufacturer defendants ( Generic Defendants ), including Petitioners, raised Mensing and also advised the court that many of the lawsuits in the JCCP (approximately 85%) were subject to personal-jurisdiction challenges. Utilizing its power to order the manner in which issues would be decided in the JCCP, the JCCP Court amended CMO1 to lift the stay that had been in place since the petition to form the JCCP was filed for the limited purpose of allowing Generic Defendants to file Mensing preemption challenges. The order specifically provided that the challenges based on Mensing are without prejudice to and do not constitute a waiver of the right to file motions on any issue not 2 At that point there were 292 cases in the JCCP with 3825 plaintiffs. That count eventually rose to over 4200 plaintiffs, but by July 2012, more than 1500 of those plaintiffs were dismissed due to lack of product use or injury.

27 12 related to the impact of the Mensing decision after further order of the Court. (App. 65.) Petitioners filed a Mensing challenge in the form of a motion for judgment on the pleadings on August 18, 2011, in the Elkins case alone the lawsuit by California residents with a specific jurisdictional nexus to California that was the vehicle plaintiffs used to petition for the JCCP. A few days later, plaintiffs told the JCCP court they would file a master complaint. The court ordered Generic Defendants to address any Mensing challenge to that master complaint explaining that we might be better off having all attacks on the master complaint all packaged at the same time for appellate review so that you could have one-stop shopping (App. 76) and [i]f you re going to have a master complaint, you might as well have a master demurrer. (Id.) As a result, the JCCP court held the Elkins motion in abeyance. Plaintiffs counsel advised the court that all parties would reserve all of their rights, claims, attacks, arguments, whatever, after they received that master complaint. [E]verything is reserved; whatever arguments they want to make, whatever arguments we want to make. (Id.) Plaintiffs liaison counsel filed the master complaint, which stated it was intended to operate as an administrative device to set forth potential claims Plaintiffs may assert against Defendants in this litigation. (JCCP Long Form Master Complaint, 9/30/11.) The master complaint did not include any information as to any individual plaintiff, but rather was to be adopted by each plaintiff in each individual action through either a notice of adoption or a

28 13 short-form complaint pursuant to an anticipated case management order. In October 2011, the coordination judge advised Generic Defendants that their Mensing challenge should be styled as a motion to strike the master complaint. Pursuant to that direction, Generic Defendants liaison counsel filed a Motion to Revoke Leave to File an Amended Complaint or to Strike Plaintiffs Master Long Form Complaint in the JCCP. No Mensing challenge was filed in any individual action. In the motion, Generic Defendants liaison counsel explained that [t]his challenge focuses on the federal preemption issue, and the Generic Defendants reserve all defenses and challenges (including jurisdictional, forum non conveniens [], and state-law demurrer challenges) more appropriately reserved until individual Plaintiffs file individual Short Form Complaints. (App ) Liaison counsel also explained that the master complaint seeks to assert causes of action under California law only and provides no Plaintiff-specific information. Inasmuch as the vast majority of the Plaintiffs in this Coordinated Proceedings are not residents of California and were not injured in California, Defendants cannot assert jurisdictional, [forum non conveniens], or other challenges until Plaintiff-specific facts are alleged and choice-of-law issues are decided.

29 14 (App. 63.) At the hearing on the motion, the JCCP Court concluded that a demurrer was the more appropriate procedural vehicle through which to address the Mensing challenge. Accordingly, it instructed plaintiffs to file an amended master complaint that separated the allegations against the generic versus nongeneric drug manufacturer defendants, to which Generic Defendants could then demur. (App. 78.) The JCCP Court ensured that everyone understood that the demurrer would enable adjudication of the Mensing challenge without any waiver of challenges to personal jurisdiction. The court directed Generic Defendants to address only Mensing challenges and those challenges would be without anybody waiving arguments that would otherwise be appropriate to attack the master complaint, and without waiver of a second round of issues. (App. 78.) The JCCP Court added that [t]he only issues to be raised are the same [Mensing] issues and [a]ll other matters are not waived by failing to raise them. (App. 79.) The amended master complaint reiterated that it was an administrative device setting forth potential claims of individual plaintiffs. Again, the amended master complaint did not include any plaintiff-specific information. As ordered by the JCCP Court, Generic Defendants liaison counsel filed a demurrer to the amended master complaint, which included the following provision: This demurrer is directed to the First Amended Long Form Master Complaint only and, as such, is a master pleading challenge. The filing

30 15 of this pleading is not intended as, and does not constitute an appearance by any defendant in any individual action included in the JCCP, and the filing of this pleading is without waiver of each defendant s rights to challenge personal jurisdiction... in any individual action; said rights are expressly reserved. (App. 60.) On April 17, 2012, the JCCP Court overruled the Mensing demurrer. Deciding that the ultimate determination of that issue impacted the court s subject matter jurisdiction over the actions, the court included language in the order to permit immediate appellate review. (App. 81; App. 92, 95 (court noting preemption issue impacts court s subject matter jurisdiction).) Generic Defendants requested review of the JCCP Court s order by a writ petition in the California appellate court. That request was summarily denied, App. 3-6, as was Generic Defendants writ petition to the California Supreme Court, App Plaintiffs amended their master complaint twice more, in 2013 and 2014, and Generic Defendants demurred to it again on federal preemption grounds, reiterating their reservation of rights to challenge personal jurisdiction upon lifting of the stay on individual cases. (App. 28, App. 31.) Throughout that time, the general stay applicable to Generic Defendants remained intact and plaintiffs counsel and the court repeatedly reiterated that Generic Defendants personal-jurisdiction defenses were not waived and would be addressed at a later stage in the proceedings. Specifically, on September 6, 2013,

31 16 plaintiffs liaison counsel acknowledged that the second demurrer would not include any personal jurisdictional challenges because Generic Defendants had preserved the jurisdictional issues. (App ) In contrast, the JCCP proceeded as to the defendants who manufactured the brand-name drug Reglan ( Brand Defendants ), which had no Mensing preemption defense. In July 2012, CMO3 was entered, which addressed the filing of one master answer on behalf of all Brand Defendants to the amended master complaint. CMO3 provided that the filing of the master answer does not constitute an appearance by any Brand Defendant in any action. (App. 35.) CMO3 also addressed the filing of shortform complaints by plaintiffs and specifically noted that any action that is the subject of a [short-form complaint] shall be stayed as to all non-brand defendants named therein. (App. 37.) CMO3 provided that those complaints would be served on all Brand Defendants named therein. (App. 38.) Similarly, the discovery provisions included in CMO3 applied solely to the plaintiffs and the Brand Defendants. At a February 11, 2014, conference the court noted that there seem to be in personam jurisdiction disputes. (App ) The JCCP Court reiterated that personal jurisdiction challenges were reserved for a later time. When plaintiffs liaison counsel asked whether Generic Defendants would be raising jurisdictional challenges in upcoming briefing, the JCCP Court answered: Hold on. It depends on what you mean by jurisdiction. If you re talking about in personam jurisdiction, that s going to be later. (App. 85.)

32 17 4. The JCCP Court Turns Its Attention to Personal-Jurisdiction Challenges Finally, during a conference in May 2014, the JCCP Court instructed the parties to meet and confer on a procedure to address personal jurisdiction. Generic Defendants advocated a test-case approach whereby motions to quash would be filed in one or more individual actions brought by out-of-state residents and any ruling on those motions would be implemented in other non-resident actions absent some distinguishing factual reason. Plaintiffs preferred to proceed with bellwether trials and force Generic Defendants to challenge personal jurisdiction in those individual actions. The matter remained unresolved for almost a year while the parties met and conferred pursuant to the court s direction. The individual actions remained stayed while this Court considered whether to hear an appeal from another California JCCP involving Mensing challenges. In February 2015, the parties reconvened before the JCCP Court. Generic Defendants repeated their desire to challenge personal jurisdiction when permitted in appropriate individual actions. The JCCP Court lifted the general stay to permit the parties to address personal jurisdiction and made clear there will not be a waiver generated by a failure to file a motion. (App ) In all other respects, the stay remained in place. On March 3, 2015, plaintiffs filed a motion in the JCCP asserting that PLIVA and Teva USA waived personal jurisdiction challenges as to all cases. Peti-

33 18 tioners filed motions to quash service of summons in the individual case of Bowman v. McKesson Corp., No. CGC , on the ground that they are not subject to personal jurisdiction in California in that case because Mr. and Mrs. Bowman are West Virginia residents and allege no connection to California related to their cause of action. Petitioners argued that the Bowmans (like other non-resident plaintiffs whose causes of action against Petitioners bear no connection to California) must necessarily depend on general jurisdiction to prosecute claims against them in California. Yet general jurisdiction could not be exercised over Petitioners because California is not their place of incorporation or principal place of business and they were not at home in California. Daimler, 134 S. Ct. at 749; Goodyear, 131 S. Ct. at 281. Thus, Petitioners argued that the JCCP Court could not assert jurisdiction over them in Bowman. At a hearing on the motions, the JCCP Court granted plaintiffs global motion and denied Petitioners motions. The orders subsequently were entered on June 3, App The court gave three reasons for the rulings: First, Petitioners purportedly consented to personal jurisdiction via the standard provision in CMO1 that the court retains sole and complete jurisdiction over the parties, cases and counsel in this coordinated proceeding, including each and every case filed in (or coordinated into) this coordinated proceeding. (App. 72; App ) Second, Petitioners purportedly waived any objection to personal jurisdiction by participating in the Mensing challenges and seeking writ review of the court s refusal to dismiss federally-preempted claims. (App ) Third, Petitioners purportedly waived any

34 19 objection to personal jurisdiction and received benefits from the JCCP by participating in discovery; i.e., the delivery by plaintiffs liaison counsel to defendants liaison counsel of fact sheet packages regarding individual plaintiffs in accordance with CMO3 pertaining to the Brand Defendants. (App ) Following California s procedures to challenge the ruling, Petitioners requested that the California appellate courts review the JCCP Court s orders and filed petitions for a writ in those courts. In turn, the California Court of Appeal and the California Supreme Court summarily denied those petitions, refusing to substantively review the JCCP Court s orders. (App. 1-6.) REASONS FOR GRANTING THE WRIT Coordinated and consolidated proceedings under a state s procedures, like California s JCCPs, are intended to promote efficiency, economy, and to promote the interests of justice. They are not, and should not be, avenues to deprive defendants of their liberty interests and due process rights. In short, they are not, and should not be, traps. Nonetheless, here the JCCP was used to unfairly ensnare Petitioners. The JCCP Court held that Petitioners waived their due process rights to challenge personal jurisdiction in every case brought by out-ofstate plaintiffs with no connection to the forum based on Petitioners participation in a compulsory coordination proceeding, despite Petitioners repeated express reservations of their jurisdictional defenses, and despite the court s and plaintiffs repeated

35 20 agreement that Petitioners rights were preserved. The court made no effort to square its waiver holding with this Court s precedents, which require a party s waiver of constitutional rights to be intentional, voluntary, and knowing. In the age of mass torts, the question whether states may use participation in compulsory coordination proceedings as a basis for finding mass waiver of defendants liberty interests and due process rights in individual cases is one of great significance that is highly likely to recur. The Court should grant the petition for certiorari. A. A STATE MAY NOT USE MASS TORT COORDI- NATION PROCEDURES TO AVOID A DUE PRO- CESS ANALYSIS This Court should grant review and declare that defendants cannot be deprived of their liberty interests in freedom from unlawful judicial power, guaranteed by the Due Process Clause, on a theory of involuntary, constructive waiver that short-circuits the necessary due process analysis. Personal jurisdiction restricts judicial power as a matter of individual liberty, for due process protects the individual s right to be subject only to lawful power. Insurance Corp. of Ireland v. Compagnie des Bauxites, 456 U.S. 694, 702 (1982); see also J. McIntyre, 131 S. Ct. at The JCCP Court refused to conduct any due process analysis on the theory that Petitioners had waived their rights but the JCCP Court based that ruling solely on conduct that the JCCP Court itself directed, and despite its own repeated assurances that no waiver would result. That is exactly the type of arbitrary deprivation of liberty that the Due Process Clause forbids.

36 21 The JCCP Court directed the course of the proceedings and the manner and sequence in which the parties should address issues. Then, the JCCP Court, on a global motion filed by plaintiffs in the JCCP, but not in any individual case, decided that Petitioners waived their personal jurisdiction defenses and consented to its exercise of personal jurisdiction over them by complying with the JCCP Court s directions. The JCCP Court then denied Petitioners motions filed in Bowman without any analysis of the basis for its findings of waiver and consent. In short, without conducting a due process analysis in any case, the court deprived Petitioners of their fundamental due process rights in over one thousand cases. The JCCP Court reached that ruling even though Petitioners were ordered by that very court to engage in the proceedings giving rise to the supposed waiver. The JCCP included cases in which personal jurisdiction was present due to a specific nexus to the state related to the specific cause of action. Petitioners could not refrain from litigating Mensing until after personal jurisdiction was challenged in non-resident cases because not all cases in the JCCP involved personal-jurisdiction objections. Petitioners did not have the option of ignoring the JCCP proceedings, and their legally required participation cannot give rise to either a waiver of their personal-jurisdiction defense or consent to the JCCP Court s exercise of general personal jurisdiction over them in the lawsuits by non-residents injured outside California lawsuits in which Petitioners never appeared.

37 22 The JCCP Court did not apply this Court s test for determining if there has been a waiver of constitutional rights, nor did it examine whether Petitioners consented to the exercise of its jurisdiction over them. The JCCP Court declined to conduct an analysis to determine whether its exercise of personal jurisdiction over Petitioners in each and every lawsuit coordinated in the JCCP comports with traditional conception[s] of fair play and substantial justice embodied in the Due Process Clause. Int l Shoe, 326 U.S. at 320. Of course it does not. Petitioners participated in the JCCP and complied with the court s orders because at least one case, Elkins (the one used to form the JCCP and which had been pending for more than a year at the time the JCCP was formed), was filed by California residents allegedly injured in California. That participation cannot give rise to either a waiver of their personaljurisdiction defense or the JCCP Court s exercise of general personal jurisdiction over them in the lawsuits by non-residents injured outside California in which Petitioners never appeared nor did Petitioners consent to that jurisdiction. B. A STATE CANNOT USE COMPULSORY PARTICI- PATION IN MASS TORT PROCEEDINGS AS A BASIS FOR FINDING WAIVER OF FUNDAMEN- TAL CONSTITUTIONAL RIGHTS The Court should grant this petition to affirm that the blanket exercise of personal jurisdiction in mass tort proceedings through a sweeping theory of waiver does not adequately protect defendants liber-

38 23 ty interests against deprivation without due process of law. The classic description of an effective waiver of a constitutional right is the intentional relinquishment or abandonment of a known right or privilege. College Sav. Bank v. Florida Prepaid Postsecondary Educ. Expense Bd., 527 U.S. 666, 682 (1999) (quoting Johnson v. Zerbst, 304 U.S. 458, 464 (1938)). That standard must be applied in each individual case to assess whether waiver of a fundamental right has occurred. Importantly, in making that assessment, courts must indulge every reasonable presumption against waiver of fundamental rights, see, e.g., Aetna Ins. Co. v. Kennedy ex rel. Bogash, 301 U.S. 389, 393 (1937), because acquiescence in the loss of fundamental rights is never presumed. Ohio Bell Tel. Co. v. Public Util. Comm n of Ohio, 301 U.S. 292, 307 (1937). Moreover, a waiver of a constitutional right is not lightly to be inferred and a waiver cannot be based on vague and uncertain evidence. Emspak v. United States, 349 U.S. 190, 196 (1955) (quoting Smith v. United States, 337 U.S. 137, 150 (1949)). In making a blanket finding and applying waiver to those thousands of lawsuits, the JCCP Court did not faithfully apply this Court s standards. Instead, the JCCP Court applied an amorphous benefit standard that appears nowhere in personal jurisdiction jurisprudence and clearly is not part of this Court s test for waiver of constitutional rights. This case is an ideal vehicle for this Court s review because the absence of any knowing, intentional, and voluntary waiver is so starkly clear. The

39 24 JCCP Court not only directed Petitioners to take exactly the steps that the court would later deem to have waived Petitioners personal jurisdiction defenses, but also the JCCP Court gave assurances that those very defenses were preserved. At every step of the way, Petitioners raised their personal jurisdiction defenses and the JCCP Court, repeatedly, assured them that those defenses were preserved. Inexplicably, the JCCP court later ruled that Petitioners waived personal jurisdiction by following its direction to address what it deemed a global issue impacting its subject matter jurisdiction before addressing issues applicable in individual lawsuits. In other contexts, that would be called bait and switch. The JCCP Court s benefit standard cannot give rise to a finding of waiver. Whatever benefit the JCCP Court supposed Petitioners had derived from participating in the JCCP, that supposition is irrelevant. By definition, a benefit is not an intentional relinquishment or abandonment of a known right or privilege. Moreover, during the time Petitioners supposedly realized the benefit, the JCCP Court repeatedly agreed that challenges to personal jurisdiction in non-resident cases were preserved for another time, i.e., were not waived. If the JCCP Court s benefit theory were followed, defendants would be subject to a state court s personal jurisdiction over them in every case each time in-state residents establish a JCCP (or similar mass tort proceeding under any state s procedures) to which out-of-state residents are added. Defendants liberty interests are not so easily taken away by state action.

40 25 Petitioners were dragged into California courts. To continue their defense in Elkins, a suit by California residents, Petitioners participated in the JCCP. The JCCP Court chose to address the Mensing challenges before personal jurisdiction challenges. Petitioners followed the JCCP Court s instructions on the manner and order in which to address issues applicable to the coordinated actions. Then, Petitioners followed California procedures and requested review of the JCCP Court s decision, which was not granted. It is wholly improper for the JCCP Court to assert personal jurisdiction in those lawsuits having no connection to California as a result of some amorphous and illusory benefit in proceedings that Petitioners were dragged into and then legally obligated to participate in. Due process requires more, as this Court s cases make clear. The JCCP Court improperly employed a benefit standard of its own creation in determining there was a waiver and failed to employ this Court s standard for waiver of constitutional rights, thereby depriving Petitioners of the proper protection of their liberty interests and due process rights. C. A COURT MAY NOT MANUFACTURE CONSENT TO THE COURT S EXERCISE OF PERSONAL JU- RISDICTION While explicit consent is one avenue by which defendants may fall under a court s personal jurisdiction, this Court long ago recognized that implied consent is a legal fiction and discarded it. See J. McIntyre, 131 S. Ct. at 2787 (plurality opinion); id. at (Ginsburg, J., dissenting) (citing Int l Shoe,