Roughly around this time last year, the U.S. Supreme Court issued its ruling in Bristol-Myers Squibb v. Superior Court, 137 S. Ct. 1773 (2017), wherein the Court rejected the California Supreme Court’s finding of specific jurisdiction over mass tort claims filed by nonresidents.
There, plaintiffs consisted of mostly non-California residents who were injured outside of California. As Bristol-Myers is incorporated in Delaware and headquartered in New York and maintains substantial operations in both New York and New Jersey, the U.S. Supreme Court found that the California courts lacked specific jurisdiction over the company in regards to nonresidents. “The mere fact that other plaintiffs were [harmed in] California does not allow the State to assert specific jurisdiction over the nonresidents’ claims.” Id. at 1776 (emphasis added). However, Bristol-Myerswas a mass tort case, and its application in a class action context was not discussed.
Application to the Class Action Matters:
Last month, on March 12, 2018, U.S. District Judge Thomas M. Durkin applied the Bristol-Myersreasoning to a Telephone Consumer Protection Act (TCPA) class action matter. In Practice Management v. Cirque Du Soleil, 2018 WL 1255021 (N.D. Ill. Mar. 12, 2018), the district court considered whether to certify a nationwide class under the TCPA, given that the court lacked general jurisdiction over the defendant; specific jurisdiction depended entirely on a fax received by the named plaintiff in Illinois.
The Cirque Du Soleil court found “that the Fourteenth Amendment’s due process clause precludes nonresident plaintiffs injured outside the forum from aggregating their claims with an in-forum resident.” Id. at *47. And given 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 federal procedural rules may not abridge substantive rights . . . a defendant’s due process interest should be the same in the class context.” Id. at *48. Therefore, the court held the Bristol-Myers reasoning applied in the class action context and prevented the court “from exercising personal jurisdiction over defendants with respect to the claims of non-Illinois-resident class members.” Id. at *7. The court dismissed the claims of non-Illinois residents and limited class certification to include only Illinois residents who received the faxes.
This is a great ruling from the perspective of defendants that are defending TCPA class actions. Both Cirque du Soleil and Bristol Myers-Squibb should be raised at class certification, as they are useful tools for limiting the size of the potential class. To avoid these hurdles, Plaintiffs’ counsel will now need to either find named plaintiffs and file a suit in every state or sue the defendant corporation on its home turf.