In 2017, the Supreme Court decided Bristol-Myers Squibb Co. v. Superior Court of California (BMS), holding that a California state court could not exercise personal jurisdiction over a defendant as to the claims being asserted by nonresident plaintiffs in a sprawling mass tort proceeding. 582 U.S. –––, 137 S. Ct. 1773 (2017). As Justice Sonia Sotomayor’s dissent in that case noted, the Supreme Court expressly left open whether the ruling would apply to claims being asserted by members of putative nationwide classes in federal court.
In the immediate aftermath of the decision, district courts split somewhat evenly on this question. By one court’s count, as of the one-year anniversary of BMS, approximately nine cases had ruled that BMS does apply to nationwide class actions, while another nine or so cases had “gone the other way.”1 As the courts in the former camp explained, the general principle outlined in BMS applies just as much to absent class members as to the mass action plaintiffs in BMS for several reasons. For starters, federalism burdens persist notwithstanding the federal forum and status of the litigation as a putative class action.2 This is so because the forum has no legitimate interest in a dispute between nonforum class members and a nonforum defendant any more than it would in a dispute between out-of-state plaintiffs and defendants. In addition, these courts recognized that the Rules Enabling Act — under which substantive rights cannot be abridged by procedural rules — also compels the application of BMS to putative class actions pending in federal court both as to the claims of named and unnamed class members.3
The first two federal appeals courts to weigh in on this recurring and nettlesome question issued their opinions in March 2020. The U.S. Court of Appeals for the Seventh Circuit held that BMS does not apply to putative nationwide class actions, while the U.S. Court of Appeals for the District of Columbia Circuit punted on the issue and deemed the question premature prior to class certification. Although the cases reached slightly different conclusions, they both found that nonresident putative class members are not “parties” before the court. This reasoning has since been followed by district courts elsewhere in the United States, signaling that the U.S. Supreme Court itself might have to intervene and clarify once and for all whether the dictates of BMS apply with equal force to nationwide class actions.
In Mussat v. IQVIA, Inc., the plaintiffs brought a putative class action, alleging that the defendant violated the Telephone Consumer Protection Act (TCPA) by mailing unsolicited “junk faxes” to the putative class members.4 The district court granted the defendant’s motion to strike the class definition, finding that under BMS, the court did not have personal jurisdiction over the out-of-state members of the proposed class. On appeal, the Seventh Circuit reversed, holding that BMS did not extend to class actions because nonresident putative class members are not parties to the action for purposes of personal jurisdiction. The Mussat court distinguished BMS on the basis that consolidation of individual cases into a mass action is different from a federal class action because all plaintiffs in a mass action are parties to the action, whereas in class actions, “[n]onnamed class members ... may be parties for some purposes and not for others.” According to the Mussat court, in some contexts — like diversity of citizenship analysis or determination of proper venue — courts do not consider unnamed class members, and the same should obtain with the question of personal jurisdiction.
In Molock v. Whole Foods Market Group, Inc., a putative class of current and former Whole Foods employees sued the company for lost wages, alleging that the company unfairly manipulated its bonus program.5 Relying on BMS, Whole Foods moved to dismiss the claims of the nonresident potential class members, arguing that the court lacked personal jurisdiction over it with respect to those specific claims. The district court denied the motion and Whole Foods appealed. On appeal, the D.C. Circuit affirmed, but on alternative grounds. Unlike the district court, the D.C. Circuit did not reach the merits of the motion; instead, the court concluded that the motion should have been denied as premature, holding that the unnamed putative class members were not parties before the court during the period prior to class certification. The court explained that “[i]t is class certification that brings unnamed class members into the action and triggers due process limitations on a court’s exercise of personal jurisdiction over their claims.” On that basis, the court concluded that “[b]ecause the class in this case has yet to be certified, Whole Foods’ motion to dismiss the putative class members is premature.”
In the wake of these appellate decisions, district courts across the country have been tasked with deciding whether to follow Mussat and Molock or chart their own course. The early returns indicate that many district courts have been persuaded by Mussat, expressly relying on that case in declining to apply the requirements of BMS to nationwide class actions.6 For example, in Lacy v. Comcast Cable Communications, LLC, the U.S. District Court for the Western District of Washington applied Mussat in denying a motion to dismiss the claims of nonresident putative class members in a TCPA action.7 Like the Seventh Circuit, the Lacy court found BMS inapplicable because “a plaintiff in a mass tort action is named as a plaintiff, making each ‘a real party in interest[;]’ [i]n contrast, only the proposed class representative is actually named on the complaint in a class action.” In addition to that rationale, the Lacy court also found BMS distinguishable because “Federal Rule of Civil Procedure 23 imposes additional due process safeguards on class actions that do not exist in the mass tort context.” In sum, the Lacy court held that “[t]his [c]ourt will not upend the traditional approach to personal jurisdiction in class actions absent an express ruling from the Supreme Court.”8
Unlike the largely positive reception of Mussat by the lower courts, the Molock decision has garnered a more mixed reaction. For example, one judge in the U.S. District Court for the Southern District of Ohio explicitly declined to follow Molock in another case brought under the TCPA.9 In Progressive Health & Rehab Corp. v. Medcare Staffing, Inc., the court reasoned that addressing the question left open by BMS is not “premature” before class certification because “the issue ... is not whether this court retains personal jurisdiction over absent class members, but whether th[e] court has personal jurisdiction over [d]efendant for claims relating to a nationwide class.” In rejecting the key premise from Molock, the court explained that “[t]he distinction is important because jurisdiction over parties is a threshold issue and because district courts have the power to adjudicate a named plaintiff’s ability to represent a class of individuals pursuant to [Rule 23].” Nonetheless, the court followed the Seventh Circuit’s reasoning in Mussat and denied the motion to dismiss the claims of the absent class members on the ground that BMS simply does not apply to “Rule 23 class actions.”
However, the Molock decision has not been completely rejected or ignored, with at least one district court following it and the majority of district courts that relied on Mussat also citing Molock for additional support or as an alternative ground for denying a motion to dismiss on personal jurisdiction grounds.10 Moreover, the U.S. Court of Appeals for the Fifth Circuit recently indicated an inclination to follow Molock as well. In Cruson v. Jackson National Life Insurance Co., the court considered whether the defendant had waived its personal jurisdiction challenge against nonresident putative class members by failing to timely raise it at the outset of the case.11 As the Fifth Circuit put...
