United States: Bristol Myers & Multi-State Class Actions – A Reply

Last Updated: August 2 2018
Article by James Beck

The other day Law 360 published a piece, "Bristol-Myers Unlikely To Shake Up Class Action Landscape," which opined that, "in the end, the effect of Bristol-Myers on the national class action landscape is likely to be minimal." One basis for that conclusion was "[I]t is unlikely that a majority of federal appellate courts will find that Bristol-Myers applies in class action cases." To support that proposition, the article states:

To date, an apparent majority of district courts, including in the Eleventh, Fifth, Ninth and District of Columbia Circuits, have held that Bristol-Myers has no application to a class action, as opposed to a mass tort action.

The article cites: Becker v. HBN Media Inc., ___ F. Supp.3d ___, 2018 WL 3007922, at *2 (S.D. Fla. June 6, 2018) ("The Court is persuaded [that] . . . Bristol-Myers does not apply to class actions"); Sanchez v. Launch Technical Workforce Solutions LLC, 297 F. Supp.3d 1360, 1369 (N.D. Ga. 2018) ("Bristol-Myers simply reaffirms controlling due-process law and does not apply to federal class actions"); Molock v. Whole Foods Market, Inc., 297 F.Supp.3d 114, 126 (D.D.C. 2018) ("the court agrees with Plaintiffs and concludes that Bristol-Myers does not apply to class actions"); In re Morning Song Bird Food Litigation, 2018 WL 1382746, at *5 (S.D. Cal. March 19, 2018) ("the Court finds Bristol-Myers inapplicable to this suit which involves a class action"); Casso's Wellness Store & Gym LLC v. Spectrum Laboratory Products Inc., 2018 WL 1377608, at *5 (E.D. La. March 19, 2018) ("the Court does not construe Bristol-Myers as barring its exercise of jurisdiction over the purported nonresident plaintiffs' claims in the instant putative class action").

As contrary authority, the article cites two cases: DeBenardis v. NBTY Inc., 2018 WL 461228, at *2 (N.D. Ill. Jan. 18, 2018) ("it is more likely than not based on the Supreme Court's comments about federalism that the courts will apply BMS to outlaw nationwide class actions . . . where there is no general jurisdiction over the Defendants"), and Wenokur v. AXA Equitable Life Insurance Co., 2017 WL 4357916, at *4 n.4 (D. Ariz. Oct. 2, 2017) ("The Court . . . lacks personal jurisdiction over the claims of putative class members with no connection to Arizona").

We found that sort of odd, as in our last look at this issue – way back on January 26, 2018 – found the caselaw to stand at 12-2 in favor of applying Bristol-Myers Squibb Co. v. Superior Court, 137 S. Ct. 1773 (2017), to curtail multi-jurisdictional class actions where the effect of certification would be a class of non-resident plaintiffs suing a non-resident corporate defendant. None of the cases cited in the 360 article as restricting BMS due process principles was decided at that point, whereas both of the cases extending BMS due process to all state-law litigation had been and therefore were cited in our prior post.

Could the law really have shifted so drastically over the last few months?

The answer is no.

The first thing we need to do is not compare apples and oranges. This blog is concerned, first and foremost, with product liability litigation. That means we're interested mostly in litigation that has its roots in state – not federal – law and is in federal court due to diversity jurisdiction. Thus, our most recent post was about "the issue of BMS and nationwide class actions under state law." Our previous post likewise examined "our prediction . . . that personal jurisdiction would become a major obstacle to nationwide class actions based on state laws." The emphasis added in both instances is to underscore that we're not concerned with class action litigation brought under federal statutes. We have a separate post examining the caveat in BMS about federal Due Process under the Fifth Amendment. Our main takeaway from that post is that due process in diversity cases is analyzed under the Fourteenth Amendment as construed in BMS.

Of the six cases cited in the 360 article, 3½ involved federal statutory claims: Becker, 2018 WL 3007922 (Telephone Consumer Protection Act), Sanchez, 297 F. Supp.3d 1360 (Fair Credit Reporting Act), Casso, 2018 WL 1377608 (Telephone Consumer Protection Act), and Morning Song Bird, 2018 WL 1382746 (RICO & state consumer protection statutes). So right there, we subtract three of the six from the article's list because they don't involve what we care about. We also chide the court in Morning Song Bird for failing to distinguish between the state and federal claims in its analysis.

By contrast, almost all (but two) of the cases we cited in our prior posts involve state-law causes of action:

In favor of applying BMS to state-law class actions:

DeBernardis v. NBTY, Inc., 2018 WL 461228 (N.D. Ill. Jan. 18, 2018) (consumer protection); LDGP, LLC v. Cynosure, Inc., 2018 WL 439122 (N.D. Ill. Jan. 16, 2018) (consumer protection and common law); McDonnell v. Nature's Way Products, LLC, 2017 WL 4864910 (N.D. Ill. Oct. 26, 2017) (consumer protection); Wenokur, 2017 WL 4357916 (D. Ariz. Oct. 2, 2017) (insurance); Spratley v. FCA US LLC, 2017 WL 4023348 (N.D.N.Y. Sept. 12, 2017) (economic loss product liability); Plumbers' Local Union No. 690 Health Plan v. Apotex Corp., 2017 WL 3129147 (E.D. Pa. July 24, 2017) (consumer fraud); Famular v. Whirlpool Corp., 2017 WL 2470844 (S.D.N.Y. June 7, 2017) (consumer protection and warranty); Demedicis v. CVS Health Corp., 2017 WL 569157 (N.D. Ill. Feb. 13, 2017) (consumer fraud); Bauer v. Nortek Global HVAC LLC, 2016 WL 5724232 (M.D. Tenn. Sept. 30, 2016) (economic loss product liability); Matus v. Premium Nutraceuticals, LLC, 2016 WL 3078745 (C.D. Cal. May 31, 2016) (consumer protection); Demaria v. Nissan N.A., Inc., 2016 WL 374145 (N.D. Ill. Feb. 1, 2016) (consumer protection).

Opposed to applying BMS to class actions:

In re Chinese-Manufactured Drywall Products Liability Litigation, 2017 WL 5971622 (E.D. La. Nov. 30, 2017) (product liability); Fitzhenry-Russell v. Dr. Pepper Snapple Group, Inc., 2017 WL 4224723 (N.D. Cal. Sept. 22, 2017) (consumer protection).

So, before we commence any new research of our own, the tally is 11 (2d, 3d 6th, 7th, & 9th Circuits) to 4 (5th, 9th & DC Circuits) in favor of applying a single due process standard to personal jurisdiction questions to all courts applying state law.

The research isn't hard to do. Look at all cases that cite BMS and mention "class action," and separate the wheat (state-law claims) from the chaff (everything else).

We found six additional cases supporting application of BMS due process principles to state-laws class actions not cited in the 360 article. In an OTC drug case, the court declared:

Nothing in Bristol-Myers suggests that it does not apply to named plaintiffs in a putative class action; rather, the Court reaffirmed a generally applicable principle − that due process requires a "connection between the forum and the specific claims at issue." That principle applies whether or not the plaintiff is a putative class representative.

Al Haj v. Pfizer Inc., 2018 WL 1784126, at *6 (N.D. Ill. April 13, 2018). In Chavez v. Church & Dwight Co., 2018 WL 2238191 (N.D. Ill. May 16, 2018), a food-related, consumer fraud action, the court determined that "[n]othing in Bristol-Myers suggests that its basic holding is inapplicable to class actions; rather, the Court announced a general principle − that due process requires a 'connection between the forum and the specific claims at issue." Id. at *10 (citation and quotation marks omitted). Chavez also rejected the notion that absent class members should simply be ignored:

Further, the Court is unpersuaded by the reliance of some district courts on the fact that the citizenship of unnamed class members is disregarded for purposes of determining diversity − that is, subject matter − jurisdiction. The question here is not whether this Court has subject matter jurisdiction, but whether, consistent with due process, this Court may exercise specific personal jurisdiction over a defendant with regard to claims that have no connection with this state beyond their similarity to claims asserted by other plaintiffs who are residents of this state.

Id. at *11. See Hickman v. TL Transportation, LLC, 2018 WL 3388307, at *7 & n.2 (E.D. Pa. July 12, 2018) ("Plaintiffs have not presented any reason for distinguishing Bristol-Myers from this [state-law] action"; distinguishing federal-law class actions); In re Samsung Galaxy Smartphone Marketing & Sales Practices Litigation, 2018 WL 1576457, at *2 (N.D. Cal. March 30, 2018) (dismissing non-resident named plaintiffs under BMS); Anderson v. Logitech, Inc., 2018 WL 1184729, at *1 (N.D. Ill. March 7, 2018) ("[A] nationwide class action is not significantly different from a mass tort suit involving a multitude of individual claims. The putative nationwide class action claims are stricken."); Howe v. Samsung Electronics America, Inc., 2018 WL 2212982, at *4 (N.D. Fla. Jan. 5, 2018) ("Rule 23 does not expand a court's personal jurisdiction over a defendant. Absent a statute providing otherwise, a defendant who is not subject to personal jurisdiction on an individual claim also is not subject to jurisdiction on a class-action claim.").

What about additional courts refusing to apply BMS to state-law class actions?

Zero, zilch, nada.

Beyond the 3½ cases in the 360 article, we found nothing – at most, plaintiffs managed to delay consideration of personal jurisdiction until some later time, such as class certification. E.g., Blitz v. Monsanto Co., 2018 WL 1785499, at *2 (W.D. Wis. April 13, 2018).

So the tally now stands at 17 (from the 2d, 3d 6th, 7th (lots), 9th & 11th Circuits) to the same 4 (5th, 9th & DC Circuits).

Moreover, even as to federal statutory class actions, it's breakeven, at best for class action plaintiffs seeking to evade BMS. Our additional results are:

Pro-BMS: Practice Management Support Services, Inc. v. Cirque du Soleil, Inc., 301 F. Supp.3d 840, 864-66 (N.D. Ill. 2018); Garcia v. Peterson, No. CV H-17-1601, 2018 WL 3496740, at *8 (S.D. Tex. July 20, 2018); America's Health & Resource Center, Ltd. v. Promologics, Inc., 2018 WL 3474444, at *4 (N.D. Ill. July 19, 2018); Jackson v. Bank of America, N.A., 2018 WL 2381888, at *6-7 (W.D.N.Y. May 25, 2018); Horowitz v. AT&T, Inc., 2018 WL 1942525, at *15-16 (D.N.J. April 25, 2018). That's five additional cases.

Anti-BMS: Garcia v. Peterson, ___ F. Supp.3d ___, 2018 WL 3496740, at *8 (S.D. Tex. July 20, 2018); Tickling Keys, Inc. v. Transamerica Financial Advisors, Inc., 305 F. Supp. 3d 1342, 1350-51 (M.D. Fla. 2018); Morgan v. U.S. Xpress, Inc., 2018 WL 3580775, at *5-6 (W.D. Va. July 25, 2018); Weisheit v. Rosenberg & Assocs., LLC, 2018 WL 1942196, at *5 (D. Md. April 25, 2018). Four more cases.

We strongly agree, however, with the second premise of the 360 article, that BMS might not have much additional overall effect because it is already "extremely difficult" for plaintiffs to pursue multi-state class actions under the predominance criteria of Rule 23. Indeed, the recent opinion in Langan v. Johnson & Johnson Consumer Cos., ___ F.3d ___, 2018 WL 3542624 (2d Cir. July 24, 2018), underscores precisely that point:

We are not convinced that the district court here undertook the requisite considered analysis of the variations in state law and the potential need for subclasses that might result from those variations. Although both parties submitted complicated and conflicting summaries of the state consumer protection laws in eighteen states, the district court's analysis consisted of one paragraph. In that paragraph, it is our view that the district court did not sufficiently engage with [defendant's] arguments about reliance, instead concluding that "it appears" that none of the states' high courts have insisted on reliance. The other identified differences − including whether intent to deceive is required, and whether causation can be presumed − were not discussed. . . . We believe that more precise and greater depth of analysis is required to comport with the "close look" required by the precedent. Accordingly, we remand the case to the district court to conduct a more thorough analysis.

Id. at *8 (citations omitted).

The practical difference is, however, significant. Dismissal for lack of personal jurisdiction is a Rule 12 motion, which may be made before a defendant has to incur the time and expense of discovery. Application of BMS to class actions is largely a legal question, so we on the defense side have an obligation to our clients to try to get rid of as much of a case as possible as early as possible. So even if the net result wouldn't be much different, we'd rather not have to wait until Rule 23 comes into play.

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

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