23 and Me: Bristol-Myers Squibb, Federal Class Actions & the Non-Party Approach.

AuthorSaunders, Bryce

Contents INTRODUCTION I. PERSONAL JURISDICTION TODAY A. General Personal Jurisdiction B. Specific Personal Jurisdiction 1. Authorization by the Appropriate Legislative Body 2. Due Process Standards a. Fourteenth Amendment Due Process b. Fifth Amendment Due Process Personal Jurisdiction Standards II. OVERVIEW OF BRISTOL-MYERS SQUIBB AND RULE 23 CLASS ACTIONS A. Bristol-Myers Squibb: The Beginning of a New Limitation B. Rule 23 Class Actions 1. Four Types of Class Actions 2. Named and Unnamed Plaintiffs: Class Actions Distinguished from Mass Actions III. THE NON-PARTY APPROACH A. Judicial Affirmance of the Non-Party Rule in other Class Action Contexts B. The Non-Party Rule Applied to Personal Jurisdiction: Judicial Efficiency and Ease of Administration IV. COMMON COUNTERARGUMENTS TO THE NON-PARTY APPROACH A. What about Defendant's Due Process Rights? B. Rule 4(h)(1)(A) C. The Rules Enabling Act D. Federal Rule 82 E. Abusive Forum Shopping and Principles of Federalism F. The Supreme Court Has Already Rejected the Non-Party Rule in Shutts CONCLUSION INTRODUCTION

Nationwide class actions have played a significant role in the U.S. legal system. (1) When a company participates in misconduct that affects a large group of people, the class action is one of the best vehicles for vindicating that group's rights. (2) Due to recent developments in personal-jurisdiction jurisprudence, the class-action device is being threatened with a blow that would severely limit its application. To best understand, consider the following hypothetical: Hurricane Katrina decimated much of the lower eastern quarter of the United States. Massive rebuilding efforts--and the Florida housing bubble--caused drywall to be in short supply. (3) To fix the shortage, drywall from China was imported to the U.S. and used in homes throughout the coastal states. (4) Not long after installation, the drywall began to give off unpleasant odors, corrode wiring, and cause homeowners to feel physically ill. (5) Imagine a Florida resident has been adversely affected by the use of the drywall in her home. Meanwhile, a class action based on the same grievances as our Florida resident is filed in a Louisiana federal court and passes the certification process. Assume the Florida resident is one of several thousand unnamed plaintiffs in the class action from out of state. The defendant moves to dismiss for lack of personal jurisdiction under Federal Rule of Civil Procedure 12(b)(2). (6) After Bristol-Myer Squibb Co. v. Superior Court (7) (UBMS")--holding that a California court lacked personal jurisdiction over out-of-state-plaintiff claims in a mass-tort action--should the federal court grant the motion to dismiss?

In her dissenting opinion in BMS, Justice Sotomayor made clear that the Supreme Court did not reach the question of whether its ruling applied to class actions. (8) And after BMS, federal courts are split on the issue. Out of 104 cases, fifty federal courts have held that BMS extends to class actions, forty did not reach a holding, and fourteen held that BMS does not extend to class actions. (9) Some have argued that the question is not whether BMS applies to class actions but rather how it applies. (10) Rather than examining each and every context in which a class action may arise in federal court and altering the analysis accordingly, this Note endorses a simpler resolution to the problem: BMS does not apply to unnamed plaintiffs in class actions in federal court because absent class members are not parties to the lawsuit for personal-jurisdiction purposes. (11)

The non-party approach was previously affirmed by the Supreme Court with regard to subject matter jurisdiction in class actions, and the rationale the Court applied for doing so applies equally in the personal-jurisdiction context. (12) Moreover, the non-party approach to personal jurisdiction in class actions has been adopted by several federal district courts as well as a federal court of appeals. (13) Failure to apply this rule would be contrary to judicial efficiency and conflict with ease of administration--two of the core purposes of the class device. (14) While this Note assumes that BMS likely applies to named plaintiffs, categorizing absent class members as non-parties significantly diminishes BMBs effects on class actions. Under this approach, the out-of-state status of an unnamed plaintiff would be irrelevant. As a result, all the plaintiff class would need to do to satisfy personal jurisdiction would be to file the action in a federal court in any state, (15) a federal court in a state to which the named plaintiff has a connection, or a state where the defendant is incorporated or has its principal place of business. (16)

Part I of this Note discusses modern personal-jurisdiction jurisprudence and highlights recent developments in the law. Part II gives an overview of BMS and a brief description of class actions, detailing the certification process and describing a major difference between class actions and mass tort actions. Part III introduces the non-party approach and its application in other areas of class actions, and explains why it should be extended to personal jurisdiction. Lastly, Part IV responds to common arguments against applying the non-party rule to personal jurisdiction in class actions.


    The modern era of the personal-jurisdiction doctrine began in 1945 with the landmark case of International Shoe Co. v. Washington. (17) In International Shoe, the Court abandoned the territorial sovereignty theory to focus solely on the Due Process Clause of the Fourteenth Amendment. (18) In doing so, the Court developed the well-known minimum contacts test used for specific jurisdiction today. (19)

    Since International Shoe was decided in 1945, the personal jurisdiction doctrine has gone through many changes. The two cases that have attracted the most attention recently--BMS and Daimler A G v. Bauman (20)--were decided by the Supreme Court in 2017 and 2014, respectively. While Daimler concerned issues of general personal jurisdiction and BMS addressed specific personal jurisdiction, both cases narrowed the circumstances in which courts can exercise personal jurisdiction over defendants. To best understand the current state of both specific and general personal jurisdiction, it is best to analyze each separately.

    1. General Personal Jurisdiction

      General personal jurisdiction allows a court to hear "any and all claims" against a foreign defendant regardless of whether those claims arose from the defendant's in-state activity. (21) Prior to 2014, the general personal jurisdiction analysis was primarily "contact-based." (22) The theory was that if a defendant had "continuous and systematic contacts" in the forum state, then general personal jurisdiction over the defendant was warranted. (23) In 2014, the Supreme Court threw a wrench in the general personal jurisdiction framework in its decision in Daimler. (24) Now, for general personal jurisdiction to exist, the defendant must be "at home" in the forum state, or in other words, the forum state must be the defendant's state of incorporation or where its principal place of business is located. (25)

    2. Specific Personal Jurisdiction

      A court that lacks general personal jurisdiction may still have specific personal jurisdiction over a party. Unlike general personal jurisdiction, specific jurisdiction does not allow a court to hear any and all claims against the defendant. Instead, the plaintiff's claims must arise out of the defendant's in-forum activity. (26)

      The specific personal jurisdiction analysis is a multi-step framework that varies depending on whether a case is in state or federal court. The first step of the analysis, however, is usually the same regardless of the forum. That is, courts will determine whether the exercise of personal jurisdiction in a case is authorized by the appropriate legislative body. (27) If a court finds that personal jurisdiction was authorized, the court must then determine "whether the exercise of jurisdiction 'comports with the limits imposed by ... due process.'" (28)

      1. Authorization by the Appropriate Legislative Body

        To determine whether Congress authorized the exercise of personal jurisdiction in a particular instance, federal courts will look to either the federal statute under which the claim arises or the Federal Rules of Civil Procedure. (29) Rule 4 of the Federal Rules of Civil Procedure governs personal jurisdiction in federal court. (30) Under Rule 4(k), there are several ways a federal court can establish jurisdiction over a defendant. First, federal courts may exercise jurisdiction over defendants who are subject to personal jurisdiction in the state in which the federal court sits through service of process or the filing of a waiver of service. (31) If a case is in state court the state's long-arm statute dictates whether the exercise of personal jurisdiction is appropriate. (32) Some states have liberal long-arm statutes that confer jurisdiction to the full extent authorized by the Due Process Clause of the Fourteenth Amendment. For example, California's long-arm statute provides that "[a] court of this state may exercise jurisdiction on any basis not inconsistent with the Constitution of this state or of the United States." (33) Other states may take a more restrictive approach, limiting the scenarios where jurisdiction exists. New York is an example of a state that has a long-arm statute that is more limited in scope. (34)

        Another way for a federal court to establish personal jurisdiction over a defendant is under Rule 4(k)(2), which provides that a federal court has personal jurisdiction in a federal question case if "the defendant is not subject to jurisdiction in any state's courts of general jurisdiction; and exercising jurisdiction is consistent with the United States Constitution and laws." (35)

        The last way for a federal court to...

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