Ninth Circuit Weighs In On When To Challenge Personal Jurisdiction Over Claims of Absent Class Members

Yesterday, in line with holdings from the Fifth and DC Circuits, the Ninth Circuit held in Moser v. Benefytt, Inc., 2021 U.S. App. LEXIS 23661 (9th Cir. Aug. 10, 2021), that the time to challenge a court’s personal jurisdiction over the claims of absent class members is when a plaintiff moves to certify a class.  Specifically, a divided panel of the Ninth Circuit held that the defendant did not waive its personal jurisdiction defense as to the claims of absent class members by not raising it in its motion to dismiss and instead waiting to do so until its opposition to the motion for class certification.

Moser is a TCPA class action.  The named plaintiff is a resident of California, and there is no dispute that the California court has personal jurisdiction over the defendant as to the named plaintiff’s claims.  However, the defendant disputes whether under Bristol-Myers Squibb Co. v. Superior Court of California, 137 S. Ct. 1773 (2017), the California court can exercise personal jurisdiction over the claims of non-California putative class members.  It did not, however, raise this objection in its motion to dismiss; rather, in response to plaintiff’s motion for class certification, the defendant argued that the district court could not certify nationwide classes because it lacked personal jurisdiction over the claims of non-California putative class members.  The district court did not address the merits of the personal jurisdiction objection because it found that the defendant had waived this defense under Fed. R. Civ. P. 12(h)(1) by not raising it in its motion to dismiss.  The Ninth Circuit granted defendant’s Fed. R. Civ. P. 23(f) petition.

As an initial matter, the majority addressed the Court’s jurisdiction to hear the challenge under Rule 23(f).  Rule 23(f) provides that “[a] court of appeals may permit an appeal from an order granting or denying class action certification under this rule.”  The dissent argues that Rule 23(f) does not confer appellate jurisdiction over an exercise of personal jurisdiction; Rule 23(f) “appeals are limited to those issues that bear on the soundness of the class certification decision.”  The majority found, however, that the district court’s decision on the personal jurisdiction defense did go to the question of whether the Rule 23 requirements could be met for the nationwide classes.  Specifically, the “defendant maintained that nationwide classes could not be certified because the district court lacked personal jurisdiction over the claims of non-California class members. The personal jurisdiction and waiver questions thus go directly to the scope of the classes that the district court certified.”  The majority thus concluded that the district court’s finding that the defendant waived the personal jurisdiction defense as to the claims of absent class members did fall within the scope of Rule 23(f) and proceeded to address the merits of the appeal.

Relying on the Fifth Circuit’s decision in Cruson v. Jackson Nat’l Life Ins. Co., 954 F.3d 240 (5th Cir. 2020), and the D.C. Circuit’s decision in Molock v. Whole Foods Market Group, 952 F.3d 293 (D.C. Cir. 2020), the majority quickly dispatched with the waiver issue, finding that the personal jurisdiction defense for absent class members was not “available” at the Rule 12 stage because “a class action, when filed, includes only the claims of the named plaintiff.”  Thus, the majority found that the defense only became available when plaintiff moved to certify the classes.  “To conclude otherwise would be to enforce ‘ the novel and surely erroneous argument that a nonnamed class member is a party to the class-action litigation before the class is certified.”

The good news is that the defendant won a battle here – the Ninth Circuit vacated the class certification order (which is always a good thing) and remanded the case back to the district court to address the merits of the defendant’s personal jurisdiction objection.  But now, the fight to win the war begins, which is convincing the district court that Bristol-Myers Squibb Co. v. Superior Court of California, 137 S. Ct. 1773 (2017) applies to class actions.  Stay tuned.

 

 

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