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August 13, 2019 Article

Personal Jurisdiction over Unnamed Class Members

This year, the Fifth, Seventh, and D.C. Circuits are set to determine whether Bristol-Myers Squibb applies to class actions.

By Joan R. Camagong

While the Supreme Court’s opinion in Bristol-Myers Squibb Co. v. Superior Court (BMS), 137 S. Ct. 1773 (2017), provides clear guidance for mass tort actions involving nonresident plaintiffs, district courts are increasingly divided as to its application to unnamed, nonresident plaintiffs in class actions. 

The federal courts declining to extend BMS to class actions rely on a distinction between mass tort actions, in which all plaintiffs are named in the complaint and are thus considered real parties in interest, and class actions, in which a plaintiff injured in the forum seeks to represent a class of similarly situated but unnamed individuals. In other words, the status of the party is determinative. For example, in Fizhenry-Russel v. Dr. Pepper Snapple Group, Inc., No. 17-cv-00564, 2017 WL 4224723 (N.D. Cal. Sept. 22, 2017), the citizenship of the unnamed plaintiffs was not taken into account when examining personal jurisdiction regardless of the fact that 88 percent of the purported class members were not California residents. These courts reason that functional differences set class actions apart (i.e., plaintiffs must meet the requirements of Federal Rule of Civil Procedure 23) such that the fairness required by due process is satisfied. See, e.g., Allen v. ConAgra Foods, Inc., No. 3:13-cv-01279, 2018 WL 6460451 (N.D. Cal. Dec. 10, 2018). The federal district courts within the Ninth Circuit appear to be aligning with this position. Other district courts entering similar decisions include the Northern District of Alabama, Middle District of Tennessee, Northern District of Georgia, and Eastern District of Michigan.

On the other side of the equation are federal courts applying BMS to class actions. These courts have made clear that whether specific jurisdiction is proper depends not on the status of the class members as parties but on the status of their claims in relation to the defendant. This reasoning squares with the principle that the Due Process Clause’s protections cannot be overridden by the federal rules of civil procedure. Indeed, Rule 23’s procedural safeguards are designed “to protect the rights of absent class members” and offer nothing in terms of protecting the due process rights of defendants. See Ortiz v. Fiberboard Corp., 527 U.S 815, 847 (1999). Such reasoning is not new and was readily applied even before BMS brought this issue to the forefront. See, e.g., DeMaria v. Nissan N. Am., Inc., No. 15-c-3321, 2016 WL 374145 (N.D. Ill. Feb. 1, 2016) (dismissing out-of-state plaintiffs and nationwide claims). The court in DeBernardis v. NBTY, Inc., No. 17-C-6125, 2018 WL 461228, at *2 (N.D. Ill. Jan. 18, 2018), later predicted that “it is more likely than not based on the Supreme Court’s comments about federalism that the courts will apply Bristol-Myers Squibb to outlaw nationwide class actions in a forum . . . where there is no general jurisdiction over the Defendants.” Northern District of Illinois decisions have done just that. Notably, the Northern District of Illinois is not an outlier as several other jurisdictions have applied BMS in a similar fashion. See, e.g., Howe v. Samsung Elecs. Am., Inc., No. 1:16-cv-386, 2018 WL 2212982 (N.D. Fla. Jan. 5, 2018); Spratley v. FCA US LLC, No. 3:17-cv-0062, 2017 WL 4023348 (N.D.N.Y. Sept. 12, 2017); In re Dental Supplies Antitrust Litig., No. 16-civ-696, 2017 WL 4217115 (S.D.N.Y. Sept. 20, 2017); Wenokur v. AXA Equitable Life Ins. Co., No. 17-00165, 2017 WL 4357916 (D. Ariz. Oct. 2, 2017); Plumbers’ Local Union No. 690 Health Plan v. Apotex Corp., No. 16-665, 2017 WL 3129147 (E.D. Pa. July 24, 2017).

This divide over applying BMS to class actions has come to a head and is making its way to the U.S. courts of appeals. For example, the D.C. Circuit is set to hear Molock v. Whole Foods, No. 18-8006, this fall. In Molock, the trial court dismissed two named plaintiffs who had no connection with the District of Columbia but allowed the nationwide class to proceed. The trial court, disagreeing with the defendant that BMS governed the claims of the absent class members who did not live in D.C., reasoned that the fairness required by the Due Process Clause is satisfied through application of Rule 23. Accordingly, the trial court found it did not need to assess personal jurisdiction with regard to all nonresident putative class members. Whole Foods brought the matter to the D.C. Circuit via interlocutory appeal. Now the D.C. Circuit is set to decide “whether the jurisdictional limits proscribed in Bristol-Myers Squibb extend to unnamed, nonresident members of a putative nationwide class in federal court.” The matter is fully briefed and set for oral argument on September 25, 2019.

The Seventh and Fifth Circuits are considering similar issues on appeal. Mussat v. IQVIA, Inc., No. 19-1204 (7th Cir.); Cruson v. Jackson Nat’l Life Ins., No. 18-40605 (5th Cir.). In Mussat, the trial court cited BMS and held that it lacked personal jurisdiction over nonresident class members because the defendant was not at home in Illinois. The plaintiff in Mussat appealed the decision to the Seventh Circuit. Oral argument is set for September 6, 2019.

In Cruson, the trial court certified a class and determined Jackson National Life Insurance waived its personal jurisdiction objection as to the unnamed class members by not raising it in its motion to dismiss. Jackson National Life Insurance sought an interlocutory appeal of the class certification decision. One of the issues the Fifth Circuit will decide is whether an objection to personal jurisdiction with respect to the claims of unnamed members of a putative class is “available” for purposes of Rule 12 before the class has been certified. The Fifth Circuit heard oral argument in April.

These cases have each garnered significant attention as evidenced by the amicus interest on both sides. They are important cases to watch as they will be among the first to decide the issue of whether BMS applies to class actions. 

Joan R. Camagong is an associate at Shook, Hardy & Bacon LLP in San Francisco, California. 

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