D.C. Circuit and Seventh Circuit Address Applicability of Bristol-Myers Squibb’s Personal Jurisdiction Ruling to Putative Class Actions

King & Spalding

  • Predominant Issues has been tracking district court decisions across the country addressing whether the Supreme Court’s decision in Bristol-Myers Squibb v. Superior Court of California—which reiterated that a plaintiff’s claims must “arise out of or relate to” the defendant’s contacts with the forum state to confer specific personal jurisdiction—applies in putative class actions. As we have reported, this issue has divided district courts. Some courts have concluded that it does, and have held that a defendant cannot be compelled to defend nationwide class claims in a state where it is not subject to general jurisdiction. Other courts, however, have reached the opposite conclusion. Now, the D.C. Circuit and the Seventh Circuit have become the first two appellate courts to weigh in on this issue, with more to follow soon.
  • In Molock v. Whole Foods Market Group, Inc., a split panel of the D.C. Circuit held that it is premature to assess personal jurisdiction over the claims of putative absent class members before a class is certified, because putative class members are not treated as parties to the lawsuit before a class is certified, and “personal jurisdiction entails a court’s ‘power over the parties before it.’”
    • In Molock, the district court denied Whole Foods’s motion to dismiss the claims of the out-of-state absent class members for lack of personal jurisdiction, and certified its order for interlocutory appeal, which the D.C. Circuit accepted.
    • The panel majority affirmed the district court’s order but did not reach the ultimate issue of whether Bristol-Myers Squibb applies in the context of multi-state class actions. Instead, the majority held that this issue should be deferred unless and until a class is certified.
    • The majority observed that, although class members are considered parties for some purposes if a class is certified, putative class members “are always treated as nonparties”—relying primarily upon the Supreme Court’s decision in Smith v. Bayer Corp., 564 U.S. 299 (2011). Because personal jurisdiction is a question of the court’s jurisdiction over a party, “it is class certification that brings unnamed class members into the action and triggers due process limitations on a court’s exercise of personal jurisdiction over their claims.” Accordingly, “[a]ny decision purporting to dismiss putative class members before that point would be purely advisory.”
    • The court did not address how personal jurisdiction over the claims of the absent class members would be decided if a class is eventually certified, leaving the door open for Whole Foods to renew its argument that the nationwide class claims should be dismissed.
    • In a robust dissent that may influence the D.C. Circuit to grant en banc review, Judge Silberman rejected the majority’s finding that Whole Foods’s motion was premature and went on to find that the court lacked personal jurisdiction over the claims of the putative nationwide class. Judge Silberman found no material difference between the due process considerations raised by the mass joinder of the claims of individual plaintiffs in Bristol-Myers Squibb and the “virtual joinder” of the claims of absent class members under Rule 23.
  • In Mussat v. IQVIA, Inc., by contrast, the Seventh Circuit reached the ultimate personal jurisdiction question and concluded that “the principles announced in Bristol-Myers do not apply to . . . a nationwide class action filed in federal court under a federal statute.”
    • In Mussat, the district court granted the defendant’s motion to strike the nationwide class allegations in a case involving alleged violations of the Telephone Consumer Protection Act (“TCPA”), concluding that the court lacked personal jurisdiction over the claims of the out-of-state putative class members.
    • After granting the plaintiff’s interlocutory petition, the Seventh Circuit first assessed whether an order striking class allegations was properly appealable under Rule 23(f). Although the order was not “an order granting or denying certification under [Rule 23],” the court reasoned that it was “functionally equivalent” to a class certification order. Relying on Microsoft v. Baker, 137 S. Ct. 1702 (2017), the court concluded that the order was immediately appealable.
    • As to the merits of the personal jurisdiction issue, the Seventh Circuit relied heavily on the fact that Bristol-Myers Squibb was expressly based on “settled principles” of personal jurisdiction and, long before that decision was rendered, courts routinely allowed nationwide class actions to proceed in states where the defendant was not subject to general jurisdiction. The court also emphasized that absent class members are treated as nonparties for purposes of diversity jurisdiction, and reasoned that this calculus should not change for purposes of personal jurisdiction.
  • Cases presenting this question remain pending before the Fifth Circuit and the Ninth Circuit. And, notably, neither the Seventh Circuit nor the D.C. Circuit called into question the generally prevailing view after Bristol-Myers Squibb that non-resident named plaintiffs may not pursue claims in jurisdictions where the defendant is not subject to general jurisdiction.
  • Ultimately, until the Supreme Court provides clarity, this issue will continue to present itself whenever defendants face putative nationwide class actions in states where they are not subject to general jurisdiction.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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