United States: Three Recent Federal Circuit Court Decisions Address Whether A Lead Plaintiff Must Establish Personal Jurisdiction Over The Claims Of Absent Class Members

In 2017, in Bristol-Myers Squibb Co. v. Superior Court,¹ the Supreme Court of the United States held that, in federal cases involving multiple plaintiffs, each plaintiff must establish that the court has personal jurisdiction over each of its claims.² This severely limited the forums where plaintiffs could bring multiple-plaintiff cases against defendants.

Since then, there has been an open question as to whether Bristol-Myers, which involved a mass tort case, applies to nationwide class actions and requires a lead plaintiff to establish that the court has personal jurisdiction over each absent class member's claim. Relying heavily on Bristol-Myers, defendants in nationwide class actions have been frequently bringing motions to dismiss absent class members without sufficient contacts with the forum to warrant the exercise of personal jurisdiction. As a practical matter, if courts were to begin granting such motions, they would likely eviscerate most nationwide class actions because, in most cases, a good portion of the absent class members likely could not establish personal jurisdiction in the relevant forum. Three recent decisions by the United States Court of Appeals, for the Fifth, Seventh, and District of Columbia Circuits, demonstrate the different ways appellate courts have been dealing with such motions.

On March 11, 2020, in Mussat v. IQVIA, the Seventh Circuit rejected application of Bristol-Myers to class actions and held that, for federal question claims, district courts need not have personal jurisdiction over the claims of absent class members because, for purposes of personal jurisdiction, only the named plaintiffs matter.

In contrast, in Molock v. Whole Foods Market Group, decided the day before Mussat, the District of Columbia Circuit held that the defendant's Rule 12(b)(2) motion to dismiss the absent class members was premature, as those class members are not parties to the case unless and until a class is certified. On March 25, 2020, in Cruson v. Jackson, the Fifth Circuit reached a similar conclusion and held that the question of whether a court has jurisdiction over the claims of absent class members is appropriately addressed at the class certification stage because that is when absent class members become part of the case. These decisions leave for another day the question decided in Mussat – namely, whether absent class members can be dismissed for lack of personal jurisdiction in a nationwide class action.

I. Background

Since 2014, the Supreme Court has issued a trilogy of decisions that have dramatically changed the law of personal jurisdiction and, in doing so, limited the forums in which an out-of-state or foreign company can be sued.

In Daimler AG v. Bauman, ³ the Court addressed general jurisdiction (i.e., whether there is personal jurisdiction over a defendant regardless of whether the underlying dispute has a connection with the forum) and rejected the practice of exercising general jurisdiction over companies if they conducted substantial business activities in the forum.⁴ Instead, the Court limited general jurisdiction over a company to only those forums where it is "at home," which, absent extraordinary circumstances, generally means where a company is incorporated or has its principal place of business.⁵

In Walden v. Fiore, ⁶ the Court addressed specific jurisdiction (i.e., whether there is jurisdiction over a particular dispute) and clarified that the inquiry must be focused on "the relationship among the defendant, the forum, and the litigation," and that relationship must arise out of contacts that the "defendant himself creates with the forum," as opposed to those created by the plaintiff or third parties.⁷

Finally, in Bristol-Myers Squibb Co., the Court clarified how the principles of Daimler and Walden apply to cases involving multiple plaintiffs. In Bristol-Myers, residents and non-residents of California sued Bristol-Myers, a New York company incorporated in Delaware, in California state court, alleging that the company's drug Plavix had damaged their health. The nonresident plaintiffs did not allege that they obtained Plavix from a California source, were injured in California, or were treated for their injuries in California but sued in California anyway because of Bristol-Myers' extensive activities marketing and selling Plavix to other plaintiffs.

The Court rejected the non-resident plaintiffs' attempt to establish jurisdiction, holding that California courts lacked specific jurisdiction over the non-residents' claims because there was not an adequate link between California and the non-residents' claims.⁸ That other plaintiffs were prescribed, obtained, and ingested Plavix in California did not sufficiently establish jurisdiction over the non-residents' claims.⁹ In doing so, the Supreme Court extended its ruling in Walden to multi-plaintiff cases by mandating that each plaintiff must establish that the court has personal jurisdiction over each of its claims.¹⁰

II. The Fifth, Seventh, and District of Columbia Circuits Consider Personal Jurisdiction over the Claims of Absent Class Members

While Bristol-Myers held that each plaintiff in a multiple-plaintiff case must establish personal jurisdiction over each of its claims, the Supreme Court left unanswered whether in a class action a lead plaintiff must establish that the court has jurisdiction over each absent class member's claim.¹¹ Three recent appellate decisions, by the United States Court of Appeals for the Fifth, Seventh, and D.C. Circuits address this recurring issue.

In Mussat v. IQVI, the Seventh Circuit held that, at least with respect to federal claims, a court need not establish jurisdiction over absent class members, notwithstanding the Supreme Court's ruling in Bristol-Myers. The plaintiff, Florence Mussat, an Illinois physician, received two unsolicited faxes from IQVIA, a Delaware corporation, and brought a nationwide putative class action in the Northern District of Illinois, alleging that IQVIA violated the Telephone Consumer Protection Act by sending the faxes. IQVIA moved to strike the class definition, arguing that the district court did not have personal jurisdiction over the non-Illinois members of the proposed nationwide class because there was no connection between the faxes sent to them and Illinois. The district court granted the motion, holding that, under Bristol-Myers, each absent class member needed to establish jurisdiction over its claims, and the non-Illinois residents could not do so because their claims had no connection to Illinois.¹²

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Footnotes

1. 137 S. Ct. 1773 (2017).

2. Id. at 1781, 1783.

3. 571 U.S. 117 (2014).

4. Id. at 137-38.

5. Id. at 139.

6. 571 U.S. 277 (2014).

7. Id. at 284.

8. 137 S. Ct. at 1784.

9. Id. at 1781.

10. Id. (Absent an "affiliation between the forum and the underlying controversy, principally [an] activity or occurrence that takes place in the forum state . . . specific jurisdiction is lacking regardless of the extent of a defendant's unconnected activities in the [forum].").

11. Id. at 1789 n.4 (Sotomayor, J., dissenting) ("The Court today does not confront the question whether its opinion here would also apply to a class action.").

12. Mussat v. IQVIA, Inc., 2020 WL 1161166, at *1 (7th Cir. Mar. 11, 2020).

Originally published 07 April, 2020

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