Trial Magazine

The U.S. Supreme Court has shown a renewed interest in the law of personal jurisdiction after Justice John Paul Stevens’s retirement in 2010. After decades of silence, the Court has issued six decisions in this area in the last seven years. In each, the Court has refused to find personal jurisdiction.¹

Most recently, in Bristol-Myers Squibb Co. v. Superior Court of California, the Court held that the U.S. Constitution’s Fourteenth Amendment due process clause prohibits injured people from multiple states from bringing a coordinated mass action in a forum where the defendant is not subject to general jurisdiction.² In dissent, Justice Sonia Sotomayor expressed alarm that Bristol-Myers would result “in piecemeal litigation and the bifurcation of claims.”³

Several federal district courts, with encouragement from corporate defendants, have extended Bristol-Myers to class actions.⁴ These rulings bar nationwide class actions or multistate class actions that include non-forum class members. But other federal district courts have reached the opposite conclusion—that Bristol-Myers does not apply to class actions.⁵ As of this writing, no federal appellate court has addressed the issue; the D.C. Circuit may be the first.⁶

These conflicting federal trial-level opinions signal that confusion in the law will be with us for some time. Looking closely at this split of authority will help you respond to overly expansive readings of Bristol-Myers that could threaten access to justice.

What Bristol-Myers Says

The jurisdiction ruling in Bristol-Myers arose out of separate personal injury suits filed by 86 California residents and 592 residents of 33 other states in California state court.⁷ These suits alleged that Bristol-Myers Squibb’s prescription drug Plavix, a blood thinner, caused serious side effects that outweighed any benefit.⁸ Bristol-Myers is incorporated in Delaware and headquartered in New York. These products liability suits were consolidated into a mass action under longstanding California procedures for coordinating cases arising out of the same course of conduct—here, the promotion and sale of an allegedly defective drug. The issue was whether California courts could exercise personal jurisdiction over Bristol-Myers in the suits brought by non-California residents.

The California Supreme Court concluded that the drug company was not subject to general, or “all-purpose,” jurisdiction because it was not “at home” in California.⁹ However, the state court was divided on the question of specific (or “case-linked”) jurisdiction, with a slim majority determining that a sufficient connection between the state forum and the suit existed to support an exercise of specific personal jurisdiction.

The court applied a “sliding scale approach” under which “the more wide ranging the defendant’s forum contacts, the more readily is shown a connection between the forum contacts and the claim.”¹⁰ Taking this approach, the state court found that Bristol-Myers’s “extensive contacts with California” allowed the court to exercise specific jurisdiction.¹¹

But the U.S. Supreme Court disagreed. In an 8-1 decision by Justice Samuel Alito (Justice Sotomayor was the lone dissenter), the Court rejected the sliding scale approach, likening it to a form of general jurisdiction because it shrinks to the vanishing point “the requisite connection between the forum and the specific claims” to exercise specific jurisdiction.¹²

What Bristol-Myers Does Not Say

Bristol-Myers is undoubtedly a blow to nationwide mass actions. Going forward, it will not be possible to sustain a nationwide mass action in a single state forum against multiple defendants who are “at home” in different states based on general jurisdiction.¹³

But Bristol-Myers should not otherwise portend a sea change in the law of personal jurisdiction. The Court did not announce a new test for specific jurisdiction. It did not definitively resolve “what sort of tie between a cause of action and a defendant’s contacts with a forum is necessary to a determination” that a plaintiff’s claim arises out of or relates to the defendant’s forum conduct.¹⁴ Rather, the decision was a “straightforward application . . . of settled principles of personal jurisdiction”¹⁵—specifically, that for “specific jurisdiction, a defendant’s general connections with the forum are not enough.”¹⁶

While the Court noted that specific jurisdiction requires courts to consider a “variety of interests”—primarily, the burden on the defendant but also federalism, which could potentially be decisive in certain cases—it did not explain how California’s exercise of jurisdiction either burdened Bristol-Myers or infringed on other states’ interests.¹⁷ What’s more, Bristol-Myers addressed personal jurisdiction only as applied to state courts, so it left “open the question whether the Fifth Amendment imposes the same restrictions on the exercise of personal jurisdiction by a federal court.”¹⁸

Finally, plaintiffs may yet be able to allege (or prove) in certain mass or class actions that the link between a defendant’s activity in the forum—such as clinical trial activity¹⁹—and the plaintiffs’ injuries suffice to authorize specific jurisdiction. So consider whether you can allege that the conduct that causes injuries nationwide—for example, clinical trials, manufacturing, and marketing—occurred in a single state where the defendant is not at home. If those facts are present, then arguably there is a sufficient jurisdictional connection between the defendant’s forum activities and the plaintiffs’ injuries.

Split on Bristol-Myers’s Effect on Class Actions

Corporate defendants have sought to extend the reasoning of Bristol-Myers regarding personal jurisdiction to class actions, and courts are divided on the issue. Decisions favorable to defendants take two forms. Some courts have held that Bristol-Myers forecloses a nationwide or multistate class action composed of non-forum class members and raising only state law claims.²⁰ Other courts have held that Bristol-Myers forecloses a nationwide federal class action raising a federal law claim if the federal law does not explicitly authorize nationwide service of process and if the nonresidents’ claims do not relate to the defendants’ contacts with the forum.²¹

By contrast, decisions favorable to plaintiffs have held that nonresident absent class members are not parties for purposes of determining personal jurisdiction over the defendant because the connection between an out-of-state absent class member’s claim and the forum is not relevant to the personal jurisdiction inquiry. Rather, it suffices that the named plaintiff can show the requisite link between the forum and the claim.²²

Responding to Class Action Jurisdictional Challenges

If your class action is met with a motion to dismiss for lack of personal jurisdiction, your chances of defeating this motion may depend on the type of class action you filed.²³

Federal claims in federal court. Take, for example, a nationwide class action raising only federal claims in federal court, and assume the federal law you are seeking to enforce does not authorize nationwide service of process.²⁴ You could argue that the Fifth Amendment’s due process clause—not the Fourteenth Amendment’s—applies and that the Fifth Amendment “requires only that the defendant possess sufficient contacts with the United States.”²⁵ This is because “when the national sovereign is applying national law, the relevant contacts are the contacts between the defendant and the sovereign’s nation.”²⁶

You also can argue that the Court’s opinion in Bristol-Myers does not foreclose the exercise of specific jurisdiction. The Court identified federalism, fairness, and convenience as due process interests that may limit a state court’s exercise of authority to decide claims of nonresidents, but a federal court presented with a federal question represents a federal sovereign regardless of where it sits.²⁷ Federalism concerns are thus “absent.”²⁸ This leaves fairness and convenience—inquiries that focus on the burden on the defendant. That requires you to answer the familiar question of whether “the maintenance of the suit . . . offend[s] ‘traditional notions of fair play and substantial justice.’”²⁹

Federal and state claims in federal court. Now consider the same example, but imagine that your complaint also alleges state law claims on behalf of named plaintiffs from the forum state and from out of state. Assume also that the state law claims arise from the laws of the named plaintiffs’ respective states. The defendant may argue, based on Bristol-Myers, that the court cannot exercise personal jurisdiction over the out-of-state plaintiffs’ state law claims because such claims lack a connection to the forum.

In response, consider whether the law of your jurisdiction permits the trial court to exercise pendent personal jurisdiction over these state law claims.³⁰ These plaintiffs, you may remind the court, are not “strangers” to the litigation but already members of the putative class for purposes of the federal claim.³¹ Considerations of efficiency and fairness should support the exercise of pendent jurisdiction.³²

If all else fails, you could argue that the court has the discretion to assert “pendent personal jurisdiction over a defendant with respect to a claim for which there is no independent basis of personal jurisdiction.”³³ If such a claim “arises out of a common nucleus of operative facts with a claim in the same suit over which the court does have personal jurisdiction,”³⁴ then in certain jurisdictions, the trial court may exercise pendent personal jurisdiction to advance judicial economy, avoid piecemeal litigation, and serve the convenience of the parties.³⁵

State-only claims in federal court. Next, consider a scenario involving a nationwide or multistate class action raising only state law claims in federal court. In this scenario, the federal court is sitting in diversity, so the forum state’s long-arm statute and the Fourteenth Amendment’s due process clause will control whether personal jurisdiction exists. Assume further that you have a single named plaintiff who is a resident of the forum state.

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In response to a personal jurisdiction challenge, you may argue that specific jurisdiction requires an assessment of a connection between the forum and the named plaintiff's claims—but not each absent class member's claims.

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In response to a personal jurisdiction challenge, you may argue that specific jurisdiction requires an assessment of a connection between the forum and the named plaintiff’s claims—but not each absent class member’s claims. The claims of absent class members are irrelevant to the analysis.³⁶

In Devlin v. Scardelletti, the Supreme Court considered whether unnamed class members are parties for purposes of determining whether there is complete diversity of citizenship.³⁷ The Court held that absent class members are not to be considered in assessing subject-matter jurisdiction, reasoning that this rule is “justified by the goals of class action litigation.”³⁸ The “ease of administration of class actions would be compromised by having to consider the citizenship of all class members, many of whom may even be unknown, in determining jurisdiction.”³⁹

In Devlin, the Court also observed that whether absent class members are parties for purposes of a particular procedural rule depends on the context: “Nonnamed class members . . . may be parties for some purposes and not for others.”⁴⁰

Along with diversity of citizenship, absent class members are not parties for purposes of

• the amount in controversy under the Class Action Fairness Act⁴¹
• Article III standing⁴²
• venue.⁴³

By comparison, absent class members are parties for purposes of

• tolling for statutes of limitations⁴⁴
• being bound by a judgment or a court-approved settlement⁴⁵
• filing an appeal to challenge court approval of a class settlement.⁴⁶

The first set of circumstances all concern “a court’s ability, constitutional or statutory, to adjudicate a particular person’s or entity’s claim against a particular defendant.”⁴⁷ Personal jurisdiction most comfortably fits in this category because it also relates to the power of a court to adjudicate a claim.⁴⁸

Last, you may decide to argue—again, borrowing from Devlin—that if the claims of absent class members were relevant to personal jurisdiction, it would compromise the administration of class actions.⁴⁹

As you face motion practice at the pleading stage suggesting that Bristol-Myers now requires a plaintiff in a class action to establish specific jurisdiction over absent class members, pay close attention to the opinion’s federalism, fairness, and convenience rationales—and whether the policy aims of class actions would be compromised by this new and controversial ¬understanding of personal jurisdiction.

Time and again, the Supreme Court has warned lower federal courts not to anticipate that it will change existing law.⁵⁰ And yet a few lower courts are not heeding that admonition when it comes to Bristol-Myers. Explain that Bristol-Myers applied settled principles of specific jurisdiction, and the interests that courts traditionally consider when determining whether personal jurisdiction is present do not compel the conclusion that all mass and class actions are no longer viable outside of a defendant’s “home” state.

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Andre M. Mura is a partner at Gibbs Law Group in Oakland, Calif. He can be reached at amm@classlawgroup.com.

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Notes

1. For an excellent overview, see Adam Steinman, State Court Jurisdiction in the 21st Century, Pound Civil Justice Institute 2017 Forum for State Appellate Court Judges, https://tinyurl.com/y85cvkxv. 

2. 137 S. Ct. 1773, 1781–82 (2017).

3. Id. at 1784 (Sotomayor, J., dissenting).

4. Many of these decisions are from the Northern District of Illinois. E.g., Chavez v. Church & Dwight Co. Inc., 2018 WL 2238191, at *11 (N.D. Ill. May 16, 2018); DeBernardis v. NBTY, Inc., 2018 WL 461228, at *2 (N.D. Ill. Jan. 18, 2018). See also In re Dental Supplies Antitrust Litig., 2017 WL 4217115, at *9 (E.D.N.Y. Sept. 20, 2017).

5. Molock v. Whole Foods Mkt., Inc., 297 F. Supp. 3d 114, 126–27 (D.D.C. 2018); see also In re Chinese-Manufactured Drywall Prods. Liab. Litig., 2017 WL 5971622, at *14 (E.D. La. Nov. 30, 2017).

6. Whole Foods Mkt. Grp., Inc. v. Molock, No. 18-7162 (D.C. Cir. filed Oct. 31, 2018).

7. Bristol-Myers, 137 S. Ct. at 1778.

8. Id.

9. Id. This aspect of the decision was uncontroversial given recent U.S. Supreme Court precedent holding that a corporate defendant is amenable to general jurisdiction only when its “affiliations with the State are so ‘continuous and systematic’ as to render it essentially at home in the forum State”—the paradigm examples being a company’s state of incorporation or principal place of business. Daimler AG v. Bauman, 571 U.S. 117, 127 (2014) (citation omitted).

10. Bristol-Myers, 137 S. Ct. at 1778–79 (citing 377 P.3d 874, 889 (2016)).

11. Id. at 1779 (citing 377 P.3d at 889).

12. Id. at 1781.

13. Id. at 1784 (Sotomayor, J., dissenting) (explaining that the “majority’s rule . . . will make it impossible to bring a nationwide mass action in state court against defendants who are ‘at home’ in different States”).

14. See Helicopteros Nacionales de Colombia, S.A. v. Hall, 466 U.S. 408, 414, n.10 (1984).

15. Bristol-Myers, 137 S. Ct. at 1783.

16. Id. at 1781.

17. See id. at 1780–81. Language in Bristol-Myers mentioning federalism as a potentially decisive interest is in tension with the Court’s earlier rejection of federalism as an independent restriction on the sovereign power of a state court. See Ins. Corp. of Ireland v. Compagnie des Bauxites de Guinee, 456 U.S. 694, 702, n.10 (1982).

18. 137 S. Ct. at 1784.

19. E.g., Dubose v. Bristol-Myers Squibb Co., 2017 WL 2775034, at *4 (N.D. Cal. June 27, 2017).

20. E.g., Chavez, 2018 WL 2238191, at *11.

21. Practice Mgmt. Support Servs., Inc. v. Cirque du Soleil, Inc., 301 F. Supp. 3d 840, 864 (N.D. Ill. 2018) (concluding that if a federal law does not authorize nationwide service of process, the relevant contacts are those with the forum state rather than the nation as a whole). 

22. E.g., Sanchez v. Launch Technical Workforce Solutions, LLC, 297 F. Supp. 3d 1360, 1365–68 (N.D. Ga. 2018) (“individual members of a plaintiff class, aside from named representatives, need not satisfy the ‘minimum contacts’ test in order for the forum court to exercise personal jurisdiction over them”).

23. This is not intended as an exhaustive list of arguments you may need to make to support personal jurisdiction. As always, research the case law in your jurisdiction, and make your own judgment on how best to address jurisdiction.

24. See Omni Capital Int’l v. Rudolf Wolff & Co., 484 U.S. 97 (1987). Although state law controls whether personal jurisdiction exists even in a federal question case, when Congress authorizes nationwide service of process, courts assess jurisdiction based on a defendants’ contacts with the United States rather than the forum state. 

25. In re Oil Spill by Amoco Cadiz Off Coast of France Mar. 16, 1978, 954 F.2d 1279, 1294 (7th Cir. 1992) (internal citation omitted).

26. Id.; see also In re Poseidon Concepts Sec. Litig., 2016 WL 3017395, at *6–7 (S.D.N.Y. May 24, 2016) (considering defendant’s contacts with the United States as a whole rather than just with New York).

27. Sloan v. Gen. Motors LLC, 287 F. Supp. 3d 840, 858–59 (N.D. Cal. 2018), order clarified, 2018 WL 1156607 (N.D. Cal. Mar. 5, 2018) (“In contrast to Bristol-Myers, the due process right does not obtain here in the same manner because all federal courts, regardless of where they sit, represent the same federal sovereign, not the sovereignty of a foreign state government.”).

28. SEC v. Carrillo, 115 F.3d 1540, 1543 (11th Cir. 1997) (citation omitted).

29. Int’l Shoe Co. v. Washington, 326 U.S. 310, 316 (1945) (citations omitted).

30. E.g., Robinson Eng’g Co., Ltd. Pension Plan & Trust v. George, 223 F.3d 445, 449 (7th Cir. 2000).

31. Sloan, 287 F. Supp. 3d at 861.

32. See id. at 859–60.

33. Action Embroidery Corp. v. Atl. Embroidery, Inc., 368 F.3d 1174, 1180 (9th Cir. 2004).   

34. Id. at 1180.

35. E.g., Vasquez v. Whole Foods Mkt., Inc., 302 F. Supp. 3d 36, 48 n.2 (D.D.C. 2018); Sloan, 287 F. Supp. 3d at 859–60. 

36. In a mass action, by contrast, each plaintiff is a real party in interest. Sanchez, 297 F. Supp. 3d at 1365. 

37. 536 U.S. 1 (2002).

38. Id. at 10.

39. Id.

40. Id. at 9–10.

41. 28 U.S.C. §1332(d) (2019); Al Haj v. Pfizer Inc., 338 F. Supp. 3d 815, 820 (N.D. Ill. 2018) (citing Travelers Prop. Cas. v. Good, 689 F.3d 714, 717 (7th Cir. 2012)).

42. Id. at 820 (citing Neale v. Volvo Cars of N. Am., LLC, 794 F.3d 353, 367 (3d Cir. 2015) (“Quite simply, requiring Article III standing of absent class members is inconsistent with the nature of an action under Rule 23.”)).

43. Id. (citing 7A Charles A. Wright et al., Federal Practice & Procedure §1757 (3d ed. 2018) (“The general rule is that only the residence of the named parties is relevant for determining whether venue is proper.”)).

44. Id. at 819 (citing Am. Pipe & Constr. Co. v. Utah, 414 U.S. 538 (1974)).

45. Id. at 820 (citing Phillips Petroleum Co. v. Shutts, 472 U.S. 797, 808 (1985)).

46. Id. (citing Devlin, 536 U.S. at 14).

47. Id. at 820.

48. Id.

49. 536 U.S. at 10.

50. See Rodriguez de Quijas v. Shearson/Am. Express, Inc., 490 U.S. 477, 484 (1989).