The Doctor’s Advocate | Fourth Quarter 2016
Government Relations Report

California Supreme Court Takes a Step to the Left

Devin O’Brien, Esq., Senior Counsel, Vice President, Legal Department

Those who have not followed the California Supreme Court for the last 30 years or so may not appreciate that, at one time, it was a leading court on “progressive” issues. The development of product liability law as we know it and insurance bad faith law were born of decisions by that body.1 After a sustained period of domination by Republican nominees and a resulting, if unsurprising, business-friendly approach, there is reason to believe the California Supreme Court may return to a more progressive course—which should give defenders of California’s longstanding tort reforms some cause for concern.

In 1977, Jerry Brown, in his first incarnation as governor, appointed Rose Bird as chief justice of the court. Her controversial tenure, marked by her categorical opposition to capital punishment, ended in 1987 when she became the first chief justice turned out of office by the electorate. Two other associate justices were swept out of office in the same election. Bird’s successor as chief justice, Malcolm Lucas, appointed by Republican Governor George Deukmejian, helped steer the reformatted court on a centrist/conservative course that endured through Governor Brown’s 2011 return to office.2 A recent California Supreme Court decision, Bristol-Myers Squibb Company v. Superior Court (Anderson), S221038 (Cal. Aug. 29, 2016), suggests that Governor Brown 2.0’s three relatively recent appointees may move the court toward a more plaintiff-friendly, rather than business-friendly, direction.

During his first stint as the 34th governor of California, which ended in 1983, Governor Brown appointed seven supreme court justices. As noted above, three were turned out of office, and their successors were appointed by Brown’s Republican successor. For many years, the only Democrat on the court was its longest-serving member, Justice Stanley Mosk, who was appointed in 1964 by the incumbent’s father, Governor Pat Brown.3 The strong Republican majority of appointees only ended in 2015 with the appointments of Justices Leondra Kruger and Mariano-Florentino Cuéllar.4 Given the state of California’s politics, in which no Republican currently holds a statewide office, the remaining Republican appointees, Justices Ming Chin, 74, Kathryn Werdegar, 80, and Carol Corrigan, 68, have little reason to expect their replacements to be appointed by a Republican governor.

The Anderson case involved the question of whether California courts should assert jurisdiction over cases brought by nonresident plaintiffs against a nonresident defendant concerning injuries allegedly arising out of the use of the blood thinner Plavix. In a 4–3 decision, the California Supreme Court ruled that California courts would hear and resolve a series of lawsuits involving parties who did not have sufficient contact with or activity in California to create jurisdiction under existing precedent.5 It was undisputed that, under recent United States Supreme Court authority, California courts did not have general jurisdiction over defendant Bristol-Myers per Daimler AG v. Bauman, 134 S. Ct. 746 (2014). It was equally undisputed that the 86 California resident plaintiffs could avail themselves of the California courts to have their claims against Bristol-Myers resolved. However, in Anderson, the supreme court allowed an additional 678 plaintiffs from other states to pursue their Plavix claims in California courts, employing logic that may earn review by the United States Supreme Court.

The Anderson majority consisted of three Brown appointees: Goodwin Liu, 45, Mariano-Florentino Cuéllar, 44, Leondra Kruger, 40, and current Chief Justice Tani Cantil-Sakauye, 56, who authored the 36-page decision. The 35-page dissent was authored by octogenarian Justice Werdegar.

Critics of the Anderson decision have noted that one common characteristic shared by the three Brown 2.0 appointees—besides relative youth and attending Yale Law School, the governor’s alma mater—is that none of them had ever served on the bench before being appointed to the state’s highest court. Given their lack of trial court experience, burdening the state’s trial courts with hundreds, if not thousands, of additional claims may not have been viewed as problematic, despite the fact that California courts are already struggling to handle the cases currently in the system.

Justice Werdegar’s dissent, while noting that the majority tries to limit its finding to “the particular circumstances of this case,” asks “[w]ill we in the next case decide that a company may be sued in California for dismissing an employee in Florida because on another occasion, it fired a different employee in California, or that an Illinois resident can sue his automobile insurer here for bad faith because the defendant sells healthcare policies in the California market?” The answer, pending possible review by the United States Supreme Court, may well be yes.

Commentators have speculated that Governor Brown’s appointees were chosen to help put California’s Supreme Court back on the map as a leader. While the subject of jurisdiction is not of great import to most, and while the decision is likely to be appealed to the United States Supreme Court, Anderson may be a harbinger of future developments on other issues, such as arbitration, employee rights, and tort reform, as California’s supreme court seeks to return to a “leadership” position.


References

  1. Greenman v. Yuba Power Products, 59 Cal. 2d 57 (1963) (product liability); Comunale v. Traders & General Insurance Company, 50 Cal 2d 654 (1958) (bad faith).
  2. The only intervening Democrat, Gray Davis, appointed only one justice, Carlos Moreno, and was himself recalled months into his second term, returning the governorship to Republican hands.
  3. Following Mosk’s 2001 death, the role of lone Democrat fell to 2001 appointee Justice Carlos Moreno, who served until 2011.
  4. Brown's first appointee on his return to office was Justice Goodwin Liu in 2011.
  5. Jurisdiction, a complex and challenging topic and a significant part of every first-year law student’s training, can be either general or specific. General jurisdiction over a party means it can be brought into court on any dispute. Specific jurisdiction, which is more limited, allows a party to be brought into court only with regard to disputes concerning matters in which it availed itself of the jurisdiction. For example, if a party comes into California to sell a product, such as Bristol-Myers’s marketing of Plavix, general jurisdiction does not exist because it is a Delaware corporation headquartered in New York with major operations in New Jersey. Under the United States Supreme Court’s guidance in Daimler, it is not “at home” in California and, thus, not subject to general jurisdiction. However, specific jurisdiction was available to California claimants who were marketed to in California, who bought the product in California, and who allegedly suffered injury in California as a result of Bristol-Myers’s activities. Bristol-Myers’s California activities had not previously been viewed as creating jurisdiction over claims from plaintiffs from the other 49 states. As the dissent notes, it is hard to harmonize the Daimler court’s rejection of “grasping” and “exorbitant” assertions of jurisdiction with the holding of Anderson.

The Doctor’s Advocate is published by The Doctors Company to advise and inform its members about loss prevention and insurance issues.

The guidelines suggested in this newsletter are not rules, do not constitute legal advice, and do not ensure a successful outcome. They attempt to define principles of practice for providing appropriate care. The principles are not inclusive of all proper methods of care nor exclusive of other methods reasonably directed at obtaining the same results.

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