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March 31, 2016 Practice Points

Juiced-Up Personal Jurisdiction Theory Rejected by TRT MDL

Mass tort practitioners should revisit their personal jurisdiction and removal strategies subsequent to a February 18, 2016, decision by the Testosterone Replacement Therapy (TRT) multidistrict litigation (MDL) court. In an MDL first, the Northern District of Illinois concluded that joined plaintiffs’ claims lacking independent bases for personal jurisdiction cannot rely on “pendent” or “supplemental” personal jurisdiction derived from co-plaintiffs’ procedurally proper claims. In addition to being the first MDL to consider the issue, it is the first court in the Eighth Circuit and explicitly departs from two trial courts in the Seventh. In light of the decision, plaintiff attorneys should reassess whether all joined plaintiffs can establish personal jurisdiction and defense attorneys should employ the court’s reasoning as an alternative or supplemental (pun intended) argument to fraudulent joinder when seeking removal. Additionally, junior attorneys, often delegated the task of drafting complaints, should familiarize themselves with the opinion’s impact on their respective forums.

Young lawyers will recall from CivPro that pendent or supplemental jurisdiction refers to a federal court’s subject-matter jurisdiction to adjudicate claims it does not otherwise have authority to hear because they arise from the same “nucleus of operative fact” as another claim properly before the court. See United Mine Workers of America v. Gibbs, 383 U.S. 715 (1966); see also 28 U.S.C. § 1367 (codifying the concept). Recently, however, some courts have cited pendent personal jurisdiction as a court’s ability to exercise jurisdiction over claims unrelated to a defendant’s in-state conduct because at least one other plaintiff’s claims arose in-state from “substantially related” acts. See e.g., Bradshaw v. Mentor Worldwide, LLC, No. 4:15-CV-332 SNLJ, 2015 WL 3545192, at *2 (E.D. Mo. June 4, 2015).

In In re Testosterone Replacement Therapy Prods. Liab. Litig., ___ F. Supp. 3d ___, 2016 WL 640520 (N.D. Ill. Feb. 18, 2016), ten plaintiffs from nine states filed suit in Missouri alleging injuries caused by the defendants’ TRT products. The defendants, Delaware corporations with headquarters in Illinois, removed the case to the Eastern District of Missouri and filed a motion to dismiss nine of the plaintiffs for lack of personal jurisdiction. The plaintiffs responded with a motion to remand for lack of diversity, citing plaintiff Charlie Bernaix’s Illinois citizenship. Before the court ruled on the motions, however, the Judicial Panel on Multidistrict Litigation transferred the case to the TRT MDL in the Northern District of Illinois. There, the court took up whether Bernaix’s claims benefited from theoretical supplemental personal jurisdiction, rather than engage in the “complicated” fraudulent joinder analysis raised by the opposition to remand. See TRT,2016 WL 640520, at *4.

The court first rejected the plaintiffs’ argument that Keeton v. Hustler Magazine, Inc., 465 U.S. 770 (1984) and Walden v. Fiore, 134 S. Ct. 1115 (2014) establish that only a defendant’s contacts are relevant to jurisdictional analysis. See TRT, 2016 WL 640520, at *4. While those decisions emphasized the importance of defendants’ contacts, the Supreme Court never indicated that specific jurisdiction could be exercised over claims unrelated to the defendants’ in-state conduct. To the contrary, in Keeton the plaintiff’s injuries included in-state dissemination of libelous statements and in Walden SCOTUS wrote that the plaintiff’s contacts could not be “the only link” establishing personal jurisdiction. See id. at *5.

The court thereafter observed that the First, Third, and Fifth Circuits have held that jurisdiction must independently exist for each of a plaintiff’s claims. See Seiferth v. Helicopteros Atuneros, Inc., 472 F.3d 266 (5th Cir. 2006); Remick v. Manfredy, 238 F.3d 248 (3d Cir. 2001); Philips Exeter Acad. v. Howards Philips Fund, 196 F.3d 284 (1st Cir. 1999). Although those appellate decisions involved separate claims by a single plaintiff, the court saw no reason not to extend the principle to joined plaintiffs’ claims. In so doing, the court explicitly rejected two Missouri district-court decisions. See TRT, 2016 WL 640520, at *5; see also Bradshaw, 2015 WL 3545192; Gracey v. Janssen Pharm., Inc., No. 4:15-CV-407 CEJ, 2015 WL 2066242 (E.D. Mo. May 4, 2015).

Lastly, pendent personal jurisdiction would effectively subject a manufacturer to general jurisdiction in any state in which it marketed or sold a product that caused any plaintiff’s injury regardless of the forum’s distance or inconvenience. While left unsaid, that result would probably fall into the category of “exorbitant exercises of all-purpose jurisdiction” rejected in Daimler AG v. Bauman. 134 S. Ct. 746, 761 (2014). Thus, the court rejected the theory as offensive to the “traditional notions of fair play and substantial justice” underlying personal jurisdiction. TRT, 2016 WL 640520, at *6.

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