US Supreme Court may limit where companies can be sued
U.S. Supreme Court is seen in Washington, U.S., October 3, 2016. REUTERS/Yuri Gripas

U.S. Supreme Court justices on Tuesday signaled a willingness to place limits on where corporations can be sued in a dispute involving drug maker Bristol-Myers Squibb Co, a potential setback to plaintiffs' lawyers who try to bring suits in friendly courts.

The justices heard arguments in Bristol-Myers' appeal of a California Supreme Court ruling allowing that state's courts to hear claims related to its blood-thinning medication Plavix even though most plaintiffs do not live in the state and the company is not based there.

The justices on Monday also were set to hear a similar appeal by Texas-based BNSF Railway Co of a 2015 Montana Supreme Court ruling allowing out-of-state residents to sue there over injuries that happened anywhere in BNSF's nationwide network.

Companies and plaintiffs are engaged in a fight over where lawsuits seeking compensation for injuries should be filed. Companies typically can be sued in a state where they are headquartered or incorporated, as well as where they have significant ties.

The nine-member court's conservative majority appeared to side with the companies' view while its liberals wondered how it would be unfair to add out-of-state claims to a case that would go ahead anyway.

Conservative Justice Anthony Kennedy expressed skepticism over California handling matters for residents of all other states. "That's a very patronizing view of federalism," Kennedy told the plaintiffs' lawyer, Thomas Goldstein.

Liberal Justice Elena Kagan suggested Bristol-Myers did not want to face multiple trials in California specifically because of plaintiff-friendly juries or the possibility of punitive damages.

"All of the above," the company's lawyer Neal Katyal said, adding that it is harder to get cases thrown out of court before trial in California.

The underlying lawsuits filed in 2012 against Bristol-Myers and California-based drug distributor McKesson Corp involved 86 California residents and 575 non-residents, alleging Plavix increased their risk of stroke, heart attack and internal bleeding.

The California Supreme Court ruled in August 2016 that it could preside over the Plavix case because Bristol-Myers Squibb conducted a national marketing campaign and sold nearly $1 billion of the drug in the state.

Bristol-Myers and other industry groups have argued that the ruling allows plaintiffs to bring lawsuits in states with more favorable laws and it hamstrings their ability to mount a full and fair defense.

Bristol-Myers is incorporated in Delaware and headquartered in New York.

(Reporting by Andrew Chung; Editing by Will Dunham)