In less than two years, nearly 60 federal district courts have grappled with a previously unaddressed issue — are class actions exempt from personal-jurisdiction scrutiny? This river of litigation springs from the Supreme Court’s decision in Bristol-Myers Squibb Co. v. Superior Court of California.1 Bristol-Myers Squibb involved a “mass tort” where all plaintiffs asserted identical personal injury claims against a defendant. The Court ultimately dismissed all the non-California residents’ claims (representing over 87% of the total plaintiffs) because their claims had no factual connection to California.
Within weeks of that decision, defendants across the country began challenging federal courts’ jurisdiction to hear nationwide class actions on similar grounds. The issue raised is novel and the legal considerations are complex. But the question itself is succinct: Does a federal court have personal jurisdiction as to nonresident, unnamed class members’ claims when the court would otherwise lack personal jurisdiction if those claims were brought individually?
Four federal circuits have now grappled with this question, with markedly different results. The Seventh Circuit addressed the issue head on, holding that the Federal Rules of Civil Procedure do not require courts to have personal jurisdiction over unnamed class members, at least for claims asserted under federal law. The D.C. Circuit and Fifth Circuit held that, before class certification, courts cannot determine whether they have personal jurisdiction as to claims asserted on behalf of nonresident putative class members. In contrast, the Sixth Circuit indicated that a defendant may waive the issue by not raising it until class certification. With these disparate rulings, this question is now one step closer to a likely resolution by the Supreme Court.
The Supreme Court’s decision in Bristol-Myers Squibb could critically reshape nationwide class actions litigation and potentially end forum-shopping by plaintiffs. But as more district courts and appellate circuits reach different conclusions as to Bristol-Myers Squibb’s impact, class action defendants with potential challenges to personal jurisdiction must be cognizant of the shifting landscape. This paper addresses the substance of district courts’ diverging opinions, the outcome of four federal appeals, and the potential implications for nationwide class actions going forward. While the dust settles, defendants should consider raising and preserving potential personal jurisdiction arguments at the earliest opportunity, or else risk waiving the defense.
OVERVIEW OF PERSONAL JURISDICTION
Bristol-Myers Squibb is one in a series of recent Supreme Court opinions that have significantly clarified—and arguably redefined—the standards for analyzing personal jurisdiction. This recent trend helps explain both Bristol-Myers Squibb’s analysis, as well as the lack of historical precedent applying personal-jurisdiction jurisprudence to class actions.
1 137 S.Ct. 1773 (2017).