In a recent decision, the Northern District of Illinois held the U.S. Supreme Court’s seminal decision in Bristol-Myers Squibb Co. v. Superior Court of California, 137 S. Ct. 1773 (2017) applied to jurisdiction determinations in class actions. In so holding, the court in DeBernardis v. NBTY, Inc. No. 1:17-cv-06125 (N.D. Ill. Jan. 18, 2018) placed itself squarely on one side of a circuit split that should have forum-shopping plaintiffs concerned.
In August 2017, DeBernardis, an Illinois resident, filed his putative class action against two New York dietary supplement companies on behalf of himself and all similarly situated individuals. DeBernardis’s four-count complaint alleges the companies made “false and misleading” claims about their products’ health benefits. Three of the counts allege claims by class members nationwide and the fourth involves only Illinois members. The defendants filed a motion to dismiss the nationwide counts, primarily based on Bristol-Myers, arguing that the court did not have jurisdiction to hear the case of non-resident class plaintiffs.
In Bristol-Myers, 86 California residents and 592 residents of other states sued Bristol-Myers, a company headquartered in New York and incorporated in Delaware, in a mass action in California state court alleging the company’s drug Plavix caused injuries. The California Supreme Court concluded the state had specific jurisdiction due to Bristol-Myers’ significant contacts in California. The U.S. Supreme Court disagreed, and in an 8-to-1 decision held that the out-of-state claimants could not sue Bristol-Myers in California because there was no nexus to their claims and California.
Courts across the country were quick to apply Bristol-Myers to similarly filed mass tort actions but some courts have been more hesitant to apply the holding to class actions. A mass tort action alleges that a single tort results in an individual injury to many victims, and therefore involves many individual plaintiffs suing one (or multiple) defendants. This is different from a class action, where one individual represents a class of plaintiffs and the claims of the entire class are treated as those of the one representative plaintiff. Class actions also have to meet additional due process standards for class certification under Federal Rule of Civil Procedure 23- namely numerosity, commonality, typicality, adequacy of representation, predominance and superiority.
Recently, the Eastern District of Louisiana and the Northern District of California have both held that Bristol-Myers’ jurisdictional holding is inapplicable to class actions. See e.g., Fitzhenry-Russell v. Dr. Pepper Snapple Group, Inc., 2017 WL 4224723 (N.D. Cal. Sept. 22, 2017); In re Chinese-Manufactured Drywall Products Liab. Litig., 2017 WL 5971622, at *1 (E.D. La. Nov. 30, 2017). In holding that Bristol-Myers only applied to mass tort actions, the Chinese Dry Wall court explained the distinction between mass and class actions in great detail, specifically highlighting the additional due process standards.
In contrast, the Northern and Eastern Districts of New York, as well as the District of Arizona, have held that the Bristol-Myers decision applies to class actions in the same manner it applies to mass tort actions. See, e.g., Spratley v. FCA US LLC, 2017 WL 4023348, (N.D.N.Y. Sept. 12, 2017); In re Dental Supplies Antitrust Litig., 2017 WL 4217115 (E.D.N.Y. Sept. 20, 2017); Wenokur v. AXA Eq. Life Ins. Co., , 2017 WL 4357916 (D. Ariz. Oct. 2, 2017). The court in Dental Supplies specifically held, “[t]he constitutional requirements of due process does not wax and wane when the complaint is individual or on behalf of a class. Personal jurisdiction in class actions must comport with due process just the same as any other case.” 2017 WL 4217115, at *9
The Northern District of Illinois in DeBernardis noted this current circuit split, stating that whether Bristol-Myers was applicable to the putative class action was a “close question.” However, the DeBernardis court stated it believes the Supreme Court’s rationale in Bristol-Myers will “outlaw nationwide class actions in a form . . . where there is no general jurisdiction over the defendants” and dismissed all counts seeking to recover on behalf of classes comprised of out-of-state plaintiffs. The court specifically noted that the issue of forum shopping, which was a primary consideration in the Bristol-Myers holding, was prevalent in both class actions and mass torts and made the Bristol-Myers decision undoubtedly applicable to class actions.
The Northern District previously held that Bristol-Myers applied to a remarkably similar case involving a putative class action brought by the purchasers of a vitamin supplement. See, McDonnell v. Nature’s way Products, LLC, 2017 WL 4864910 (N.D. Ill. October 26. 2017). However, the McDonnell court’s opinion contains little rationale and explanation of its holding.
Based on the clear language of the DeBernardis court, the door to contrary interpretation of Bristol-Myers appears closed.