Bexis saw Bohemian Rhapsody last week and, as a result, is suffering from multiple Queen earworms. One is from the title song itself – “Caught in a landslide, no escape from reality.” Come to think of it, that one may also be due to the recent election. Another one is that great bass riff – da-da-dum dum dum, da-da dum-dum-dum de-de – from “Another One Bites the Dust.”
Speaking of another one biting the dust, the recent decision in Mussat v. IQVIA Inc., 2018 WL 5311903 (N.D. Ill. Oct. 26, 2018), makes mincemeat of a purported nationwide class action against a non-resident defendant under Bristol-Myers Squibb Co. v. Superior Court, 137 S. Ct. 1773 (2017) (“BMS”). It does so not in the context of a tort claim, but against a suit brought under a federal statute – something called the Telephone Consumer Protection Act (“TCPA”). Since the TCPA has no provision permitting nationwide service of process, “this Court looks to Illinois law and the Due Process Clause of the Fourteenth Amendment for the applicable limits on its exercise of personal jurisdiction.” Mussat, 2018 WL 5311903, at *4.
First, the plaintiffs tried to avoid the issue with a waiver argument. But as we discussed in our post on waiver and personal jurisdiction, one can’t waive an unknown defense. Here, until the aftermath of BMS, class action plaintiffs got away with nationwide class actions against non-resident defendants. Thus, no waiver occurred:
[Defendant’s] personal jurisdiction defense was not available to it when it moved to dismiss. . . . [N]o court applied the Supreme Court’s [BMS] holding or reasoning to a class action under the Telephone Consumer Protection Act until two days before [defendant] filed its motion to dismiss on other grounds. . . . Following that decision, [defendant timely amended its first responsive pleading. . . . [Plaintiff] could not seriously expect [defendant] to know this defense was available to it at the time it could have first raised it.
Id. at *2 (citations omitted). Dynamite with a laser beam. Guaranteed to blow your mind. Anytime!
On the merits, the court in Mussat saw no reasons to distinguish between class actions and mass torts – or between federal and state law – under post-BMS Due Process analysis. “Taking heed of the Supreme Court’s admonition that the primary concern of the analysis is the burden on the defendant, other district courts applied these principles of specific jurisdiction to federal class actions. It appears that those courts agree that [BMS] generally applies to bar nationwide class actions in federal court where the defendant allegedly injured the named plaintiff outside the forum.” Id. at *4. But Mussat involved a harder case; the plaintiff was injured in the forum. The issue was whether an in-state plaintiff seeking to be a class representative could “represent the absent claims of the nonresident and unnamed putative class members who the defendant injured outside the forum.” Id. (citations omitted).
The answer was a resounding “no.”
“[T]he mere fact” that [plaintiff] received two faxes in Illinois “does not allow” for an exercise of “specific jurisdiction over the nonresidents’ claims” with respect to faxes received outside of Illinois because those absent class members’ claims do not relate to [defendant’s] contacts with Illinois. It follows, then, that exercising specific jurisdiction over [defendant] with respect to the nonresidents’ claims would violate [defendant’s] due process rights. Therefore, the Court must strike the class definition to the extent it asserts claims of nonresidents.
Id. at *5 (citations to BMS omitted).
Mussat then distinguished a couple of Supreme Court cases: Califano v. Yamasaki, 442 U.S. 682 (1979), which assumed personal jurisdiction rather than deciding it, and Phillips Petroleum v. Shutts, 472 U.S. 797 (1985), on the same grounds that the Supreme Court had distinguished Shutts in BMS. 2018 WL 5311903, at *5. Read Mussat if you require any more detail about that.
Then we get to the central holdings. First, to put it bluntly, BMS prohibits nationwide class actions against non-resident corporations.
Following the Supreme Court’s lead in [BMS] and applying its core reasoning here, due process, as an “instrument of interstate federalism,” requires a connection between the forum and the specific claims at issue. This recognition bars nationwide class actions in fora where the defendant is not subject to general jurisdiction. Whether it be an individual, mass, or class action, the defendant’s rights should remain constant.
Id. at *5 (BMS citation omitted) (emphasis added). Second, filing suit as a class action under Fed. R. Civ. P. 23 cannot change the scope of personal jurisdiction. That would put Rule 23 outside the scope of the Rules Enabling Act:
[T]he Constitution and state law guide the personal jurisdiction analysis, which affects only the forum where this suit may be brought. That consequence does not run afoul of the Rules Enabling Act. Conversely, faithfully interpreting the Act here ensures the consistent and uniform application of defendants’ due process rights in class actions under Rule 23, as compared to the maintenance of individual or mass actions. This construction ensures that Rule 23 − a rule of procedure subject to the Act’s limitations − does not violate the Act by extending the personal jurisdiction of the federal courts to “abridge, enlarge or modify” a “substantive right.”
Id. at *6 (quoting 28 U.S.C. §2072(b)) (emphasis added).
Boom-boom BAM! Boom-boom BAM! Boom-boom BAM! Boom-boom BAM! We will, we will rock you…..