In decisions issued a day apart, two federal appellate courts addressed the issue of whether a court can exercise specific jurisdiction over a nationwide class action. The U.S. Court of Appeals for the Seventh Circuit answered that question in the affirmative in Mussat v. IQVIA, Inc., reasoning that putative class members need not establish personal jurisdiction over a defendant. The U.S. Court of Appeals for the District of Columbia Circuit concluded that question should not be answered until the class certification stage in Molock v. Whole Foods Market Group, Inc., but agreed that absent class members are not part of the jurisdictional analysis. In so holding, both courts declined to extend to class actions the U.S. Supreme Court’s ruling in Bristol-Myers Squibb Co. v. Superior Court of California, which held that a state court lacked jurisdiction over mass tort claims filed by non-resident plaintiffs against a nonresident defendant.
In Bristol-Myers, more than 600 plaintiffs filed a lawsuit asserting California state law claims for injuries suffered from taking a drug manufactured by the defendant. Most of the plaintiffs were not California residents, and California courts did not have general jurisdiction over the defendant. The issue was whether California could exert specific jurisdiction over the defendant for the claims involving plaintiffs who were not California residents.
Bristol-Myers was not a class action. It was a coordinated mass action under California Civil Procedure Code § 404—a procedural device that has no analogue in the Federal Rules of Civil Procedure. The Court’s analysis, therefore, was straightforward. Applying long-standing principles of due process, the Court determined that California courts could not exercise specific jurisdiction over nonresident plaintiffs because their claims did not arise out of or relate to the defendant’s contacts with California.
The Court was careful to limit its holding in Bristol-Myers, stating “since our decision concerns the due process limits on the exercise of specific jurisdiction by a State, we leave open the question whether the Fifth Amendment imposes the same restrictions on the exercise of personal jurisdiction by a federal court.” Justice Sotomayor, in dissent, put it more bluntly: “The Court today does not confront the question whether its opinion here would also apply to a class action.”
Despite this, Bristol-Myers prompted class action defendants to contest personal jurisdiction, arguing that unnamed class members lacked the requisite connection to the class representatives’ chosen forum. They argued that principles of due process prohibited federal courts from exercising jurisdiction over the defendant for class members whose claims lacked the requisite connection with the forum.
Mussat and Molock are the first federal appellate decisions addressing the applicability of Bristol-Myers to class actions under Rule 23 of the Federal Rules of Civil Procedure. At issue in both cases was whether putative class representatives could bring claims on behalf of nonresident class members in a court that could only exercise specific jurisdiction over the defendant. Neither the Seventh Circuit nor the D.C. Circuit extended Bristol-Myers to class actions.
In Mussat, the defendant moved to strike from the complaint the definition of the proposed nationwide class. The defendant argued that the district court did not have jurisdiction over the defendant with respect to the nonresident members of the proposed class. The Seventh Circuit disagreed, noting the general consensus before Bristol-Myers that a plaintiff could represent a nationwide class in a federal court that did not have general jurisdiction, and the many times the Supreme Court entertained such cases without raising jurisdiction issues. As the circuit court explained, Rule 23 class actions are designed to have lead plaintiffs who earn the right to represent the interests of unnamed class members by satisfying the criteria of Rule 23(a) and (b). Further, the unnamed class members are not treated as parties for many purposes, including diversity of citizenship, subject matter jurisdiction, and venue.
In Molock, the defendant moved to dismiss the case with the same Bristol-Myers argument: the district court lacked personal jurisdiction to hear the claims of the nonresident putative class members. The D.C. Circuit signaled that it would not apply Bristol-Myers to class actions, but declined to answer the question on the basis of ripeness. As the court explained, putative class members are not parties to the action for any purpose prior to class certification so it could not yet consider whether the court had jurisdiction over their claims.
“It is well established that the claims of the class are tested through the class representatives, and that there are due process protections built into Rule 23,” explains Adam E. Polk, San Francisco, CA, cochair of the ABA Section of Litigation’s Class Action & Derivative Suits Committee. “The D.C. Circuit zeroed in on the fact that mass torts and class actions are different in kind, correctly finding that putative class members are always treated as nonparties,” Polk continues.
Section of Litigation leaders agree that disputes like Mussat and Molock that challenges to class scope will continue for the foreseeable future. “It is too early to tell if other circuits will follow the Seventh Circuit,” opines Lindsay D. Breedlove, Philadelphia, PA, cochair of the Section’s Class Action & Derivative Suits Committee. “Courts have grappled with absent class member claims in a variety of ways before Bristol-Myers. The U.S. Court of Appeals for the Third Circuit, for example, decided in Neale v. Volvo that only the named class member needs standing to bring a claim. The lack of standing of absent class members was not dispositive of the claims,” Breedlove concludes.
