Prescott v. Bayer HealthCare Pharmaceuticals Inc.

Background

Steven Prescott and Mike Xavier, both California residents, brought a proposed class action against Bayer HealthCare LLC and Beiersdorf, Inc. They asserted claims for unfair and unlawful business practices, deceptive advertising, violation of California’s Consumers Legal Remedies Act, breach of express warranty, and unjust enrichment. They alleged that they bought Coppertone sunscreen lotions in 2017 because the products were labeled and advertised as “mineral based,” but the products contained chemical active ingredients. They alleged that they would not have bought the lotions had they known that.

Bayer HealthCare LLC is identified as a Delaware company with its principal place of business in Whippany, New Jersey. Beiersdorf, Inc. is identified as a Delaware corporation with its principal place of business in Wilton, Connecticut. Both conduct business in California. The opinion states that Bayer owned, manufactured, or distributed the Coppertone products and created or authorized their labels, while Beiersdorf later acquired, owned, manufactured, and distributed the products and created or authorized their labels.

The defendants moved to dismiss for lack of personal jurisdiction and to transfer the case to the District of New Jersey. After that motion was filed, the plaintiffs amended their complaint and removed Bayer HealthCare Pharmaceuticals, Inc., Bayer AG, Beiersdorf North America, Inc., and Beiersdorf AG as defendants.

Personal Jurisdiction

The plaintiffs conceded that the court did not have general jurisdiction over the defendants, meaning jurisdiction based on a company’s particularly strong and lasting connection to the state. They argued instead that the court had specific jurisdiction, which applies when the lawsuit arises from a defendant’s conduct connected to the forum.

The defendants argued that the court could not exercise specific jurisdiction over claims brought by absent class members who lived outside California. They relied on the Supreme Court’s decision in Bristol-Myers Squibb Co. v. Superior Court of California. The court distinguished that decision because it involved a mass tort in which each plaintiff was named, whereas this case was a class action in which only the proposed class representatives were named. Following its prior decisions, the court held that it had specific jurisdiction over the claims of out-of-state class members. It therefore denied the motion to dismiss for lack of personal jurisdiction.

The defendants also challenged jurisdiction over Bayer HealthCare Pharmaceuticals, Inc. and Beiersdorf North America, Inc. Because the amended complaint had removed those entities from the case, the court denied as moot the motion concerning them.

Transfer of Venue

The court agreed that the case could have been brought in the District of New Jersey. Beiersdorf submitted a declaration stating that it had two offices there and that some employees involved in labeling and formulating Coppertone products worked in those offices. The court found that this was enough to establish specific jurisdiction over Beiersdorf in New Jersey for this lawsuit.

The court nevertheless concluded that the defendants had not shown that New Jersey was a more convenient and fair forum. The convenience of witnesses weighed in favor of transfer, but only slightly, because the defendants did not specifically identify the third-party witnesses or describe their testimony. Access to evidence was neutral because most evidence would consist of documents and laboratory reports that could be transmitted electronically. Familiarity with the governing law weighed slightly against transfer because several claims were based on California law. The court found local interest neutral and concluded that the connection between the action and California also weighed against transfer.

Balancing these factors, the court determined that the defendants had not shown that New Jersey was more convenient than the Northern District of California. It therefore denied the motion to transfer venue. Judge Nathanael M. Cousins also stated that the defendants did not need to answer the original complaint because they had already moved to dismiss the First Amended Complaint.