Jurisdiction at Work: Specific Personal Jurisdiction in Flsa Collective Actions After Bristol-myers Squibb

• Publication year: 2022

Jurisdiction at Work: Specific Personal Jurisdiction in FLSA Collective Actions After Bristol-Myers Squibb

Anaid Reyes Kipp
areyeskipp1@student.gsu.edu

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JURISDICTION AT WORK: SPECIFIC PERSONAL JURISDICTION IN FLSA COLLECTIVE ACTIONS AFTER BRISTOL-MYERS SQUIBB

Anaid Reyes Kipp^*

Abstract

In Bristol-Myers Squibb Co. v. Superior Court (BMS), eighty-six California residents and five hundred ninety-two nonresidents from thirty-three different states, who had originally filed eight separate complaints, used ordinary party joinder rules to file a mass tort action in California state court, alleging that Bristol-Myers Squibb's blood-thinning drug made them sick. The Supreme Court held in 2017 that the California state court did not have specific personal jurisdiction over the national pharmaceutical company because its contacts with California were insufficient in relation to the claims by nonresident plaintiffs. Although BMS was a mass action filed in state court, its applicability to other forms of aggregate litigation was left open by the Court. As a result, a growing split among the courts has emerged regarding BMS's effect on the claims of out-of-state plaintiffs in collective actions under the Fair Labor Standards Act (FLSA). To date, three United States Courts of Appeals have addressed the issue, reaching disparate results, while disagreements among the district courts cut across courts within the same judicial districts and circuits. This divided landscape highlights the need for further guidance from Congress and the Supreme Court to define the scope of specific personal jurisdiction in collective actions. This Note argues that to protect workers' rights, promote uniformity and judicial efficiency across the nation, deter forum shopping, and support federalism, the

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Supreme Court, Congress, or both should formulate a clear rule granting district courts specific personal jurisdiction over employers in FLSA collective actions with respect to the claims of nonresident plaintiffs.

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CONTENTS

Abstract................................................................................941

Introduction.........................................................................944

I. Background......................................................................948

A. Personal Jurisdiction.................................................948

1. Bristol-Myers Squibb.............................................952

B. Class Actions, Multidistrict Litigation, and FLSA Collective Actions.......................................................957

1. The FLSA..............................................................959
2. Collective Actions Under the FLSA......................962

C. The Growing Split......................................................964

II. Analysis...........................................................................965

A. The Swamy Line........................................................967

1. Specific Jurisdiction at the Level of the Suit........967
2. Jurisdiction at the Conditional Certification Stage ..............................................................................969
3. Federalism and Forum Shopping.........................971
4. Congressional Intent............................................971

B. The Maclin Line.........................................................973

1. Uniformity............................................................973
2. Textualism ............................................................ 974
3. Similarity of Collective Actions and Mass Actions ..............................................................................975

III. Proposal.........................................................................977

A. Worker's Rights.........................................................978
B. Judicial Efficiency......................................................980
C. Uniformity and Predictability....................................982

1. Forum Shopping...................................................982
2. Multidistrict Litigation and Federal Interest ....... 984

D. Actions from Congress and the Supreme Court ........ 985

Conclusion............................................................................986

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Introduction

In Bristol-Myers Squibb Co. v. Superior Court (BMS), the Supreme Court held that a California state court did not have specific personal jurisdiction over a national pharmaceutical company in a mass tort action because the company's contacts with California were insufficient regarding the claims by nonresident plaintiffs.¹ Justice Alito, writing for the majority, indicated that the Court merely engaged in a "straightforward application . . . of settled principles of personal jurisdiction."² Yet scholars soon noted that the BMS decision was not simply applying unquestioned jurisdictional principles or clarifying a "notoriously hazy doctrine"; in fact, BMS was part of a "stealth revolution" that has narrowed the scope of personal jurisdiction in complex legal actions.³ Moreover, BMS has become the landmark case in a bigger story, one that is defining the balance of power in multi-plaintiff aggregate litigation.⁴

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Dissenting in BMS, Justice Sotomayor expressed fear that "the consequences of the majority's decision . . . [would] be substantial."⁵ She noted, as she had done in other cases, that the majority's opinion had de facto "eliminate[d] nationwide mass actions in any [s]tate other than [the state] in which a defendant is 'essentially at home.'"⁶ As a result, nonresident plaintiffs in those actions could no longer obtain personal jurisdiction in fora outside the place of injury, the defendant's state of incorporation, or the state in which the defendant's principal place of business is located.⁷ Even worse, according to Justice sotomayor, plaintiffs might not be able to proceed jointly in lawsuits against two corporations headquartered and incorporated in separate states when the claims arise in different fora.⁸ This situation, she warned, would effectively "curtail—and in some cases eliminate—plaintiffs' ability to hold corporations fully accountable for their nationwide conduct."⁹

Although some scholars think that such concerns were overstated—and the supreme court's most recent personal jurisdiction opinion from early 2021 suggests that the court might be prepared to take a more flexible, case-by-case approach to specific jurisdiction in certain cases¹⁰ —the BMS opinion left many open

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questions that have split courts across the country.¹¹ One such split, as Justice Sotomayor cautioned, is "the question whether [the BMS] opinion . . . also appl[ies] to a class action in which a plaintiff injured in the forum [s]tate seeks to represent a nationwide class of plaintiffs, not all of whom were injured there."¹² Following Justice Sotomayor's invitation, numerous scholars have since considered the effects of BMS on Multidistrict Litigation (MDL) and class actions.¹³ BMS's impact on other forms of aggregate litigation, however, remains understudied. In particular, the growing split among the courts regarding the effects of BMS on out-of-state plaintiffs in collective actions under the Fair

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Labor Standards Act (FLSA) and to some extent, actions under the Age Discrimination in Employment Act (ADEA), requires attention.¹⁴ To date, despite the rising number of collective actions nationwide, only three U.S. Courts of Appeals have addressed—reaching disparate results—whether the BMS rule regarding personal jurisdiction of nonresident plaintiffs applies to collective actions; furthermore, district courts are equally split.¹⁵

This Note will address the growing split among courts deciding FLSA collective actions after BMS by proceeding in three parts. Part I provides a brief and general overview of personal jurisdiction, focusing on the epistemological shifts in the Court's understanding of

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personal jurisdiction since 2011 as well as the history, development, and specific features of FLSA collective actions, in comparison with other forms of aggregate litigation. Part II analyzes the current split among the various trial and circuit courts regarding the application of BMS to FLSA collective actions, tracing the courts' arguments both in favor of and in opposition to this application. Finally, Part III offers a discussion of the potential negative consequences of extending BMS to collective actions in light of specific policy implications and provides a recommendation on how to best approach personal jurisdiction in the context of FLSA collective actions. Particularly, this Note urges the Supreme Court, Congress, or both to formulate a clear rule granting federal courts personal jurisdiction over defendants in FLSA collective actions regarding the claims of opt-in plaintiffs, regardless of their nonresident status.

I. Background

This Section sets the stage for examining the district courts divergent applications of BMS to FLSA collective actions. First, it looks at how the BMS opinion fits within the larger framework of personal jurisdiction jurisprudence.¹⁶ Second, it offers an overview of the historical developments and procedural specificities of FLSA collective actions, in comparison with other forms of aggregate litigation such as class actions and MDL.¹⁷ Finally, it introduces the two main currents driving the split among the courts.¹⁸

A. Personal Jurisdiction

One of the foundational principles in American jurisprudence is the requirement that courts have personal jurisdiction over the parties to render a binding judgment.¹⁹ When plaintiffs file suit, however, they

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consent to the power of the court, so personal jurisdiction issues typically arise only with defendants.²⁰ At the state level, this power over a nonresident defendant is ordinarily authorized by both state statutory long-arm provisions and the Fourteenth...