While the Supreme Court’s opinion in Bristol-Myers Squibb Co. v. Superior Court (BMS), 137 S.Ct. 1773 (2017) curtailed the reach of litigation tourists in multi-plaintiff litigation, it did not expressly state that its holding applies to class actions. Naturally, district courts are now divided as to its application to unnamed, non-resident plaintiffs in class actions.
Federal courts in California appear to be leading the charge in declining to extend BMS in this context. These courts rely on a distinction between mass tort actions, where all plaintiffs are named in the complaint and are thus considered real parties-in-interest, and class actions, where a plaintiff injured in the forum seeks to represent a class of similarly situated but unnamed individuals. In Fizhenry-Russel, for example, 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. Fizhenry-Russel v. Dr. Pepper Snapple Group, Inc., No. 17-cv-00564, 2017 WL 4224723 (N.D. Cal. Sept. 22, 2017).
Recently, the Northern District of California reasoned that functional differences set class actions apart (i.e. plaintiffs must meet Rule 23 requirements) such that the fairness required by due process is satisfied. Allen v. ConAgra Foods, Inc., Case No. 3:13-cv-01279, 2018 WL 6460451 (N.D. Cal. Dec. 10, 2018).
By contrast, federal courts in Illinois have rejected the exercise of personal jurisdiction over claims of unnamed, non-resident class members. These courts rely on the Supreme Court’s emphasis that a sufficient nexus between the defendant, the forum and the underlying claims is required. Even before BMS was decided, the Northern District of Illinois recognized the due process concerns and dismissed out-of-state plaintiffs and nationwide claims because they were brought on behalf of non-residents whose claims did not arise out of the defendant’s activities in Illinois. DeMaria v. Nissan N. Am., Inc., No. 15-c-3321, 2016 WL 374145 (N.D. Ill. Feb. 1, 2016). The DeBernardis court 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.” DeBernardis v. NBTY, Inc., No. 17-C-6125, 2018 WL 461228, at *2 (N.D. Ill. Jan. 18, 2018). Federal courts in Illinois have done just that. See e.g., Chavez v. Church & Dwight Co., 17-cv-1948, 2018 WL 2238191 (N.D. Ill. May 16, 2018); Am’s Health & Res Ctr., Ltd. v. Promologics, Inc., No. 16-cv-9281, 2018 WL 3474444 (N.D. Ill. July 19, 2018).
As the Northern District of Illinois reasoned, the Supreme Court’s due process concerns about federalism “suggest that it seeks to bar nationwide class actions in forums where the defendant is not subject to general jurisdiction,” particularly given that under the Rules Enabling Act a defendant’s due process interest should be the same in the class context as it is in individual or mass actions. Chavez, 2018 WL 2238191, at *10. Federal courts in other jurisdictions generally align with the Northern District of Illinois and have applied BMS to class actions. See e.g. 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., 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).
Other courts have circumvented application of BMS by holding that federalism concerns in BMS apply only to state court claims. See e.g. Sloan v. General Motors LLC, 287 F. Supp. 3d 840 (N.D. Cal. 2018); Swamy v. Title Source, Inc., No. 17-01175, 2017 WL 5196780 (N.D. Cal. Nov. 10, 2017); Sanchez v. Launch Technical Workforce Solutions LLC, 297 F. Supp. 3d 1360 (N.D. Ga. 2018).
Finally, at least one court has avoided application of BMS under the pendent personal jurisdiction doctrine—i.e. exercising jurisdiction over a claim that itself lacks a connection to the federal forum because it arises out of a common nucleus of operative facts with other claims properly before the court. Sloan, 287 F. Supp. 3d at 861-62. The court reasoned that there would only be a de minimis burden on defendant who would otherwise face piecemeal litigation.
This divide over applying BMS to class actions will continue to evolve and likely make its way to the U.S. Courts of Appeals. Until then, defendants should continue to raise and preserve their personal jurisdiction arguments, even if they find themselves before a court that has already declined to extend BMS.
Joan R. Camagong is an associate at Shook, Hardy & Bacon LLP in San Francisco, California.