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Litigation News | 2022

Rule of Civil Procedure Does Not Bar Personal Jurisdiction

Michael Stefanilo Jr


  • In Waters v. Day & Zimmerman NPS, Inc., over 100 employees filed consent forms to join a collective action lawsuit for overtime wages under the Fair Labor Standards Act (FLSA).
  • The defendant employer argued that out-of-state employees without a connection to Massachusetts should be dismissed from the case due to lack of personal jurisdiction.
  • The U.S. Court of Appeals for the First Circuit affirmed that Rule 4(k)(1) does not independently limit a federal court's exercise of personal jurisdiction in collective actions.
Rule of Civil Procedure Does Not Bar Personal Jurisdiction
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A divided federal appellate court affirmed that Federal Rule of Civil Procedure 4(k)(1) governs service of process only and is not an independent prerequisite to establishing personal jurisdiction in federal court when federal claims are asserted. The decision breaks from appellate precedent in two other federal circuits. ABA Litigation Section leaders are likewise split on the import of the holding and whether it is likely to be considered by the Supreme Court of the United States.

A Challenge to Collective Actions and Personal Jurisdiction

In Waters v. Day & Zimmerman NPS, Inc., the plaintiff employee sued for reimbursement of overtime wages under FLSA in the U.S. District Court for the District of Massachusetts. In accordance with FLSA’s procedures governing collective actions, over 100 current and former employees, many of whom who worked for the employer outside of Massachusetts, filed consent forms opting into the proceeding.

The defendant employer moved to dismiss the out-of-state employees’ claims for lack of personal jurisdiction. The employer argued that the Fourteenth Amendment precludes out-of-state plaintiffs with no connection to the forum state from opting in to a federal collective action, even though a federal court’s jurisdiction is determined by the Fifth Amendment’s due process clause. In support, the employer relied upon the U.S. Supreme Court’s decision in Bristol-Myers Squibb v. Superior Court of California (BMS), which held that state courts cannot entertain a state-law mass action that includes out-of-state plaintiffs absent a sufficient connection between the forum state and claims at issue.

The district court concluded that BMS did not apply to federal claims brought in federal court and denied the employer’s motion.

Rule 4(k)(1) Does Not Bar Collective Actions for Want of Personal Jurisdiction

The U.S. Court of Appeals for the First Circuit affirmed, rejecting the employer’s argument that Rule 4(k)(1) “independently limits a federal court’s exercise of personal jurisdiction with respect to out-of-state opt-in claimants added after service of process has been effectuated.” The appellate court distinguished BMS, which held that the Fourteenth Amendment limits state courts’ jurisdiction over state law claims. However, the First Circuit noted that with respect to purely federal-law claims, it is the Fifth Amendment’s due process clause, not the Fourteenth Amendment, that governs the scope of federal court jurisdiction. It stated that “[t]he Fifth Amendment does not bar an out-of-state plaintiff from suing to enforce their rights under a federal statute in federal court if the defendant maintained the “requisite ‘minimum contacts’ with the United States.”

The First Circuit also rejected the employer’s argument that Rule 4(k) “incorporates the Fourteenth Amendment’s limits on the jurisdiction of federal courts wherever a federal statute does not provide for nationwide service of process.” As the appellate court explained, the argument required interpreting Rule 4(k)(1) as governing service of summons and federal court jurisdiction after proper service of summons, which was not supported by either the text or history of the rule. It reasoned that “[t]he fact that 4(k)(1)(A) provides that “service of a summons” establishes personal jurisdiction over defendants by utilizing a given state’s long-arm statute incorporating Fourteenth Amendment requirements does not show that the Fourteenth Amendment applies to federal-law claims after service is satisfied.” The appellate court further noted that Rule 20 already defined federal courts’ authority for adding plaintiffs, and that the defendants’ reading of the rules would effectively frustrate the goal of efficient enforcement underlying collective actions.

By contrast, the dissent would have dismissed the interlocutory appeal as premature, having come for review on a motion to dismiss and before a motion to certify the putative class of similarly situated employees. It voiced concern that the majority’s decision was overbroad and “will be binding in our Circuit not only in cases that concern collective actions under the FLSA but also in a whole range of cases that also implicate Rule 4(k)(1)(A) but that have nothing to do with FLSA collective actions at all.” The dissent also noted that the First Circuit’s decision marked a split from the U.S Court of Appeals for the Sixth Circuit and the U.S. Court of Appeals for the Eighth Circuit, which both held that Rule 4 limits the court’s jurisdiction.

A Controversial Break from Other Circuits?

Litigation Section leaders disagree about the import of the Waters decision and whether the U.S. Supreme Court might grant certiorari. “The First Circuit got this right as a matter of rule interpretation,” opines Adam Polk, San Francisco, CA, cochair of the Section’s Class Actions & Derivative Suits Committee. “Rule 4(k)(1) is focused on the ability of service of summons to establish personal jurisdiction. The rule, by its plain language, does not focus on personal jurisdiction at large,” Polk explains. Otherwise, “federal jurisdiction would be inappropriately limited, and piecemeal litigation in alternate forums would ensue,” he warns.

Other leaders see more nuance. “This is a difficult issue, with reasonable textual and policy-based arguments on both sides and competing law developed in federal district courts,” explains Jeff Wilkerson, Charlotte, NC, member of the Section’s Class Actions & Derivative Suits Committee. “The defendants in Waters have taken the position, in their pending petition for certiorari, that Waters reasoning, taken to its logical end, could lead to an expansion of federal courts’ personal jurisdiction that expands far beyond the FLSA collective-action context,” cautions Wilkerson. For this reason, Wilkerson predicts that the Supreme Court will “give this case a serious look. It cleanly presents an important personal jurisdiction issue, and there is a clear circuit split.”

By contrast, Polk believes that “[w]hile SCOTUS review is possible, the interpretation of the rule applied by the First Circuit appears relatively uncontroversial rendering high court review unlikely.”