Vacating District Court’s Decision Certifying Nationwide Classes, Ninth Circuit Rules Defendant Did Not Waive Bristol-Myers Squibb Defense

King & Spalding

On August 10, 2021, the Ninth Circuit vacated a California district court’s order certifying two nationwide classes under the Telephone Consumer Protection Act (“TCPA”). The district court had rejected the defendant’s argument that, under Bristol-Myers Squibb, personal jurisdiction over the claims of non-California putative class members was lacking, reasoning that the defendant had waived that defense by not asserting it at the pleading stage. The Ninth Circuit reversed the district court’s waiver decision and remanded the case to the district court for consideration of the defendant’s Bristol-Myers Squibb defense in the first instance. [Note: King & Spalding represented the defendant in the Ninth Circuit.]

  • The plaintiff filed suit in California federal district court alleging that Benefytt made unwanted sales calls in violation of the TCPA. The parties did not dispute that the California court had specific personal jurisdiction over named plaintiff Kenneth Moser’s claims, as his claims arose in California.
  • Further, while Benefytt did not file a motion to dismiss challenging the district court’s personal jurisdiction, it did argue in its opposition to the plaintiff’s motion for nationwide class certification that under Bristol-Myers Squibb the court lacked personal jurisdiction over the claims of non-California putative class members. Specifically, Benefytt argued it was not subject to general jurisdiction in California (as it is incorporated in Delaware and has its principal place of business in Florida), and that the claims of the out-of-state class members did not arise from or relate to its contacts with California.
  • The district court held that the defendant waived its personal jurisdiction defense because it did not raise that defense at the pleading stage. As a result, the court did not consider whether Bristol-Myers Squibb applied to the claims of absent class members. The court then found that the requirements of Rule 23 were otherwise satisfied, and certified two nationwide classes. Benefytt sought interlocutory review of that decision under Rule 23(f).
  • The Ninth Circuit first determined that the interlocutory appeal was proper under Rule 23(f) because certification of the nationwide classes depended on the proper exercise of personal jurisdiction over the absent class members’ claims.
  • The court then determined that Benefytt did not waive the personal jurisdiction argument by not raising it in an initial Rule 12(b) motion. The court reasoned that the personal jurisdiction argument was not “available” to Benefytt at the pleading stage because the unnamed class members were not yet parties to the case. According to the court, “there were no claims the district court could have dismissed on personal jurisdiction grounds when it decided [Benefytt]’s motion to dismiss because Moser was the only plaintiff and there was specific personal jurisdiction over his claims against [Benefytt].”
    • In reaching this decision, the court relied on decisions from the Fifth Circuit and D.C. Circuit that had reached simiar results. You can find our coverage of the Fifth Circuit decision here D.C. Circuit decision here.
  • The court also rejected Moser’s argument that Benefytt should have raised the personal jurisdiction defense at the pleading stage because it had “reasonable notice” of that defense, stating that defendants are under no obligation to raise premature objections at the Rule 12 stage.
  • Having concluded that Benefytt did not waive its Bristol-Myers Squibb defense, the court remanded the case to the district court for consideration of that defense.
  • This case continues the trend of circuit court cases declining to require defendants to assert jurisdictional defenses against unnamed members of a putative class at the pleading stage. Nevertheless, the issue has not yet been addressed by most of the circuits. Accordingly, outside the Fifth, Ninth, and D.C. Circuits, defendants should still consider moving to dismiss the claims of putative absent class members on personal jurisdiction grounds in the first filed Rule 12 motion to avoid any risk of waiver.
  • The case is Moser v. Benefytt, Inc., No. 19-56224. Read more here.

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.

© King & Spalding | Attorney Advertising

Written by:

King & Spalding

King & Spalding on:

Reporters on Deadline

"My best business intelligence, in one easy email…"

Your first step to building a free, personalized, morning email brief covering pertinent authors and topics on JD Supra:
*By using the service, you signify your acceptance of JD Supra's Privacy Policy.
Custom Email Digest
- hide
- hide

This website uses cookies to improve user experience, track anonymous site usage, store authorization tokens and permit sharing on social media networks. By continuing to browse this website you accept the use of cookies. Click here to read more about how we use cookies.