Earlier today the Czar brought us with the breaking news that the Seventh Circuit Court of Appeals determined that the Supreme Court’s Bristol-Myers decision does not apply to Rule 23 class actions. And as promised, here is a further review of the court’s decision.
In Mussat v. IQVIA, Inc., No. 19-1204 (7th Cir. March 11, 2020), Mussat, an Illinois physician doing business as a corporation, brought a class action in the Northern District of Illinois, against IQVIA, a Delaware corporation, for alleged violations of the TCPA. Mussat asserted claims on behalf of the corporation itself and a nationwide class who had received unconsented faxes from IQVIA in the four previous years. 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. The district court granted the motion under Bristol-Myers Squibb Co. v. Superior Court, 137 S. Ct. 1773 (2017). The court reasoned that, under Bristol-Myers, not just the named plaintiff, but also the unnamed members of the class, each had to show minimum contacts between the defendant and the forum state. And such contact was just not found there when the court analyzed the issue following Bristol-Myers.
The Court of Appeals granted Mussat’s petition to appeal from the district court’s above order, and held that Bristol-Myers do not apply to the case of a nationwide class action filed in federal court under a federal statute.
The court first gave a brief review on the scope of Rule 23(f) and the appealability of an order striking class allegation under Rule 23(f). The court found that “Rule 23(f) grants the courts of appeals jurisdiction to hear interlocutory appeals of orders that expressly or as a functional matter resolve the question of class certification on way or the other.” Mussat, No. 19-1204 at 4.
The court then spent the remaining 8 pages of its 12-page order analyzing the Supreme Court’s decision in Bristol-Myers and its applicability to the personal jurisdiction issue here in the Rule 23 class action. It started with the general consensus before Bristol-Myers. First, the court noted that due process principles did not prohibit a plaintiff from seeking to represent a nationwide class in federal court, even if the federal court did not have general jurisdiction over the defendant. See, e.g., Al Haj v. Pfizer, Inc., 338 F. Supp. 3d 815, 818019 (N.D. Ill. 2018). Further, for cases relying on specific jurisdiction over the defendant, minimum contacts, purposeful availment, and relation to the claim were assessed only with respect to the named plaintiffs. Before Bristol-Myers came into the play, the class’s affiliation with a forum depends only on the named plaintiffs, and once certified, the class as a whole is the litigating entity.
The court then gave a thorough review of the Bristol-Myers decision.
In Bristol-Myers, 600 plaintiffs, most of whom were not California residents, sued Bristol-Myers Squibb (“BMS”), asserting state-law claims based on injuries they suffered from Plavix, a blood thinning drug sold by BMS in the state. The Plaintiffs brought their case as a coordinated mass action under section 404 of the California Civil Procedure Code. Except for the sales of Plavix in California, BMS had no other contacts with the state. The Supreme Court agreed with BMS’s argument that the California courts did not have jurisdiction over it with respect to the claims of the plaintiffs who were not California residents and had not purchased, used, or been injured by Plavix in California. It noted that its holding constituted a “straightforward application … of settled principles of personal jurisdiction.” Bristol-Myers, 137 S. Ct. at 1783.
When the court turned to the current case, it indicated that the district court actually realized, that if it were to extend the Bristol-Myers approach to personal jurisdiction to certified class actions, the nationwide class action would, as a practical matter, be impossible any time the defendant is not subject to general jurisdiction, which would have been far from the routine application of personal jurisdiction rules. Nonetheless, as the Court of Appeals stated, the district court felt compelled to reach that result.
The court continued its analysis by pointing out that, “Class actions, in short, are different from many other types of aggregate litigation, and that difference matters in numerous ways for the unnamed members of the class.” Mussat, No. 19-1204 at 8. The court stated, “Bristol-Myers neither reached nor resolved the question whether, in a Rule 23 class action, each unnamed member of the class must separately establish specific personal jurisdiction over a defendant.” Id. at 9.
The court further cited to Devlin v. Scardelletti, 536 U.S. 1 (2002) and a few other cases, and came to the conclusion that personal jurisdiction should not be treated any differently from subject-matter jurisdiction and venue: The named representatives must be able to demonstrate either general or specific personal jurisdiction, but the unnamed class members are not required to do so.
As to IQVIA’s second major point that allowing the non-Illinois unnamed class members to proceed would be inconsistent with Federal Rule of Civil Procedure 4(k), which governs service of process, the Court of Appeals stated that, “IQVIA is mixing up the concepts of service and jurisdiction.” Mussat, No. 19-1204 at 11. The court pointed out that rule 4(k) addresses how and where to serve process; it does not specify on whom process must be served. Further, the court stated, “as discussed above, a district court need not have personal jurisdiction over the claims of absent class members at all.” Id. Based on Federal rules of Civil Procedure 17(a)(1), and the same principle with class actions like this one: if the court has personal jurisdiction over the defendant with respect to the class representative’s claim, the case may proceed. Id.
Finally, the court pointed out that, the Supreme Court in Bristol-Myers expressly reserved the question whether its holding extended to the federal courts at all. 137 S. Ct. at 1784. The court thus is convinced that there is no need to locate each and every one of the unnamed class members and conduct a separate personal-jurisdiction analysis of their claims.
The court therefore reversed the district court’s judgment and remanded for further proceedings.
Wow… this is ________ (I don’t know… My mixed feeling right now makes me unable to decide which word to use to fill out this blank…) I need more time to digest this…
I,too,need more time to digest this!! Isn’t interpretation of law a wonderful thing?