April 29, 2019 Practice Points

Post-Bristol Myers: Personal Jurisdiction in Nationwide Class Actions Over Non-Resident Class Members Remains in Flux

It appears that until the federal courts of appeals or the U.S. Supreme Court weighs in, uncertainty over whether plaintiffs must establish personal jurisdiction for the claims of absent class members will persist.

By Scott Carlton

The U.S. District Court for the Northern District of Illinois weighed in this month on the U.S. Supreme Court’s holding in Bristol-Myers Squibb Co. v. Superior Court of California, 137 S. Ct. 1773 (2017).  In Bakov v. Consolidated World Travel, Inc., No. 15 C 2980, 2019 WL 1294659 (N.D. Ill. Mar. 21, 2019), the district court considered the open question of whether Bristol -Myers, which held California lacked personal jurisdiction over non-resident plaintiffs with no meaningful connection to the forum, applies with equal force to absent class members in a class action lawsuit.

After granting Bristol-Myers’s writ of certiorari, the U.S. Supreme Court concluded that the California Supreme Court erred in finding that the plaintiffs established specific jurisdiction over the non-California residents’ claims by relying on the defendant’s conduct in connection with the California residents’ claims. The Court held that California lacked either general or specific jurisdiction over those non-California residents’ claims. Writing for the majority, Justice Alito reasoned that California’s approach “resembles a loose and spurious form of general jurisdiction” that was not consistent with the Court’s precedents.

Since Bristol-Myers, federal district courts have been grappling with the question of whether the jurisdictional limitations of Bristol-Myers apply to absent class members in federal class actions. The U.S. District Court for the Northern District of California, for example, held that Bristol-Myers was not applicable because absent class members are not parties or “present” for purposes of personal jurisdiction. Fitzhenry-Russel v. Dr. Pepper Snapple Group, Inc., No. 17-cv-00564, 2017 WL 4224723 (N.D. Cal. Sept. 22, 2017); see also Sloan v. General Motors, LLC, 287 F. Supp. 3d 840 (N.D. Cal. 2018). Likewise, the U.S. District Court for the Eastern District of Louisiana held that procedural differences between mass actions and class actions rendered Bristol-Myers inapplicable to class actions. See In re Chinese-Manufactured Drywall Prod. Liab. Litig., No. MDL 09-2047, 2017 WL 5971622 (E.D. La. Nov. 30, 2017). However, other federal district courts have held that the holding in Bristol-Myers is not limited to mass actions. See, e.g., Practice Management Support Services, Inc. v. Cirque du Soleil, Inc., 301 F. Supp. 3d 840 (N.D. Ill. 2018) (“[I]t is not clear how Practice Management can distinguish the Supreme Court’s basic holding in Bristol–Myers simply because this is a class action.”).

Bakov follows the latter trend of federal district court cases. In Bakov, the district court was asked to certify a nationwide class of plaintiffs that allegedly received phone calls from the defendant in violation of the Telephone Consumer Protection Act. The district court held that the defendant lacked any systematic contacts in Illinois to establish general jurisdiction. With respect to specific jurisdiction, the district court noted that the Bristol-Myers decision was limited to state court jurisdiction. Nevertheless, the action brought by plaintiffs was predicated on the federal court sitting in diversity jurisdiction, and therefore the court was required to look to state law for jurisdictional scope. Although a close question, the district court then held that Bristol-Myers applies to class actions, and therefore found that the court lacked personal jurisdiction over the nonresident, absent class members’ claims.

Bakov serves to further deepen the split between federal district courts regarding the application of Bristol-Myers to nationwide class actions. It appears that until the federal courts of appeals or the U.S. Supreme Court weighs in—unless claims are filed in venues where corporate defendants are headquartered—uncertainty over whether plaintiffs must establish personal jurisdiction for the claims of absent class members will persist.

Scott Carlton is an attorney with Paul Hastings in Los Angeles.

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