United States: You Can Use BMS To Oppose Class Certification, Too

Last Updated: March 22 2018
Article by Steven Boranian

We have written a lot about personal jurisdiction and class actions, and we have particularly questioned how, after BMS, anyone could proceed with a nationwide class action applying state law in a forum where there is no general personal jurisdiction over the defendant. We are not the only ones posing this question, but as has so often been the case, Bexis has led the way with two extraordinarily useful posts surveying the cases. You can review these must-read posts here and here. You can also get Bexis' Washington Legal Foundation white paper on the topic here.

The issue is whether a court can exercise specific personal jurisdiction over claims asserted on behalf of out-of-state class members. Take for example a putative nationwide class action in which a California class representative sues a New York defendant in California in connection with goods purchased in California. Can this class representative purport to represent absent class members who reside and purchased goods outside California? We think the answer clearly is no, since those non-Californians cannot establish specific personal jurisdiction over the New York defendant in California.

Most courts agree with us, and judging from our prior posts, the issue is often decided on a motion to dismiss. But is a motion to dismiss the only way to invoke BMS and its limitations on specific personal jurisdiction in a nationwide class action? If you move fast, you can probably use BMS to oppose class certification, which is what happened last week in another Illinois case, Practice Management Support Services, Inc. v. Cirque du Soleil, Inc., No. 14 C 2032, 2018 WL 1255021 (N.D. Ill. Mar. 12, 2018). In Practice Management, an Illinois company filed a nationwide class action in Illinois under the Telephone Consumer Protection Act ("TCPA") against a Canadian company after received a fax advertising a circus performance in Illinois.

The case had been proceeding in federal court for several years, apparently including briefing on the plaintiffs' motion for class certification, when the Supreme Court decided BMS. The defendants therefore filed a supplemental brief asserting that BMS "prevents this Court from asserting personal jurisdiction over the Defendants with respect to the claims of putative class members located outside of Illinois" and that the case was therefore relevant to class certification. Id. at *15.

The district court agreed with the defendants, and its marquee holding is that BMS's limitations on specific personal jurisdiction apply to class actions in federal court. After citing other district judges who had so found, the district court made this broad ruling:

This Court agrees with these courts. Indeed, it [is] not clear how [Plaintiff] can distinguish the Supreme Court's basic holding in Bristol-Myers simply because this is a class action. The Supreme Court has emphasized that "Rule 23's [class action] requirements must be interpreted in keeping with Article III constraints, and with the Rules Enabling Act, which instructs that the [federal court] rules of procedure 'shall not abridge, enlarge, or modify any substantive right.'" Amchem Prods. v. Windsor, 521 U.S. 591, 592 (1997) . . . The Supreme Court held in Bristol-Myers that the Fourteenth Amendment's due process clause precludes nonresident plaintiffs injured outside the forum from aggregating their claims with an in-forum resident. Bristol-Myers, 137 S. Ct. at 1781. Under the Rules Enabling Act, a defendant's due process interest should be the same in the class context.

Id. at *16. This reasoning is essentially bulletproof, and the district court's holding is bookended by another significant ruling—that the defendants did not waive their personal jurisdiction challenge. Id. at *17. Remember, the defendants litigated this case in the Illinois federal court for years, and they did not raise personal jurisdiction in their answers. But here, BMS was a game changer. The district ruled that a personal jurisdiction challenge would have been futile before BMS and that the defendants "timely raise[d] their personal jurisdiction defense in a motion that timely followed the Supreme Court's decision." Id. Because other defendants sued before BMS are surely in a similar position, the district court's no-waiver holding should not be overlooked.

If you stopped reading here, you would have the gist of Practice Management. But the plaintiffs made other arguments, too. They argued that the district court could exercise jurisdiction over a nationwide class under Phillips Petroleum Co. v. Shutts, 472 U.S. 797 (1985), where the Supreme Court held that courts could exercise personal jurisdiction over absent class member's claims without violating the class members' due process rights. Id. at *16. But that is apples and oranges. The issue in Practice Management was the defendants' due process rights. An absent class member has the right to notice and opt out before being bound to a class judgment. A defendant whose objection to jurisdiction is overruled is being compelled to answer the out-of-staters' claims and has no choice. That's a big due process difference.

The plaintiffs also argued that BMS left open the question of whether the Fifth Amendment's due process clause imposed the same restrictions on the exercise of personal jurisdiction by a federal court. We are aware of a handful of district judges who have bought this argument, and suffice it to say that we do not agree that due process under the Fifth Amendment is fundamentally different from due process under the Fourteenth Amendment when it comes to personal jurisdiction. In Practice Management, it did not matter: The TCPA does not authorize nationwide service of process and looks to state law for limitations on personal jurisdiction in any event. Id. at *16. Thus, BMS applies.

The district court therefore followed BMS and ruled that it did not have jurisdiction over nonresidents' claims: "Because these nonresidents' claims do not relate to defendants' contacts with Illinois, exercising specific personal jurisdiction over defendants with respect to them would violate defendants' due process rights." Id. at *18.

The practical impact of this ruling is that this class action is now limited to Illinois only. In the portion of the order that we have not discussed, the district court granted class certification. But instead of a class of fax recipients from anywhere, the district court redefined the class to include Illinois residents who received faxes in Illinois. Maybe that is small consolation, but it is consolation nonetheless, and by raising their challenge when they did, the defendants created a published order on personal jurisdiction that will help us all. We will be sure to thank them when the circus is over.

This article is presented for informational purposes only and is not intended to constitute legal advice.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Authors
Similar Articles
Relevancy Powered by MondaqAI
 
In association with
Related Topics
 
Similar Articles
Relevancy Powered by MondaqAI
Related Articles
 
Related Video
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
 
Email Address
Company Name
Password
Confirm Password
Position
Mondaq Topics -- Select your Interests
 Accounting
 Anti-trust
 Commercial
 Compliance
 Consumer
 Criminal
 Employment
 Energy
 Environment
 Family
 Finance
 Government
 Healthcare
 Immigration
 Insolvency
 Insurance
 International
 IP
 Law Performance
 Law Practice
 Litigation
 Media & IT
 Privacy
 Real Estate
 Strategy
 Tax
 Technology
 Transport
 Wealth Mgt
Regions
Africa
Asia
Asia Pacific
Australasia
Canada
Caribbean
Europe
European Union
Latin America
Middle East
U.K.
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.

Disclaimer

The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.

General

Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions