Did Bristol-Myers Squibb Kill the Nationwide Class Action?
abstract. Over the last two years, federal courts have confronted a question with profound implications for the future of class actions: When do courts in one state have jurisdiction over a class-action defendant with respect to the claims of unnamed class members in other states? Many commenters have argued that the Supreme Court’s 2017 decision in Bristol-Myers Squibb Co. v. Superior Court made it unconstitutional for courts to proceed in multistate and nationwide class actions in all but a very limited set of circumstances. Some commenters have also suggested that courts have already adopted that conclusion by a wide margin. But up to now, no comprehensive survey has shed light on this major question facing class litigation.
This Essay presents the first such survey, examining every federal district court opinion in the first two years after Bristol-Myers Squibb that addresses the question of personal jurisdiction over unnamed class members. It reveals that, contrary to those commenters, a significant supermajority of cases—fifty of the sixty-four rulings on the issue from June 2017 through September 2019, and four out of every five judges—have rejected the argument that Bristol-Myers Squibb constrains courts’ jurisdiction over defendants with respect to unnamed class members. The survey also demonstrates that the question of Bristol-Myers Squibb’s application is more complicated than many realize, potentially amounting to at least four distinct questions where some courts and commenters have treated it as only one. These findings thus suggest that the future of personal jurisdiction in class actions is more complicated, and possibly more favorable for class actions, than many have thought.
When the Supreme Court handed down its decision in Bristol-Myers Squibb Co. v.
commenters immediately speculated that it might spell “the end of an era” for
class actions.2 BMS
itself was a mass-tort case, in which individual plaintiffs are treated as
distinct, and not a class action, in which a small set of named plaintiffs
represents a broad class of people whose claims rise or fall together. But many
saw BMS’s holding—that plaintiffs
from states around the country could not join together in California to sue the
pharmaceutical company Bristol-Myers Squibb—as plausibly extending to
multistate and nationwide class actions.3
The week after the decision came out, one Illinois law professor told the Chicago Tribune that “the days of a
nationwide class action being filed against a California company in Madison
. . . are over.”4
Such an outcome would, of course, be of immense significance for U.S. civil law enforcement. Multistate and nationwide class actions have been a major structural feature of the legal system, playing a substantial role in the enforcement of laws governing consumer protection, civil rights, antitrust, securities regulation, and more.5 Where a company or a government engages in widespread wrongdoing, class actions provide one of the few mechanisms for compensation and deterrence that operates on a similar scale.6 But in recent years, class actions have been significantly curbed along a variety of dimensions, most notably through the Class Action Fairness Act of 2005 and the Supreme Court’s enforcement of class waivers in arbitration clauses in AT&T Mobility v. Concepcion.7 Extending BMS to class actions would be a new, substantial limit on class litigation around the country, as in most states, defendants would be subject only to much narrower suits than are currently available.8
Some commenters have treated the extension of BMS to class actions as nearly inevitable—and possibly already largely accomplished. In March 2018, after a number of district courts had weighed in on the application of BMS to class actions, the Washington Legal Foundation declared that “[j]udicial trends to date warrant cautious optimism” that BMS will significantly curtail class actions.9 A “practice points” commentary published earlier this year by the American Bar Association’s Section of Litigation stated that federal courts “generally align” with decisions applying BMS to render multistate class actions unconstitutional.10 And one overview of the case law by an industry blog “found the caselaw to stand at 12-2 in favor of applying [BMS] to curtail multi-jurisdictional class actions.”11 To hear these accounts, BMS has already “sound[ed] the death-knell for nationwide class actions . . . unless brought where a corporate defendant is ‘at home.’”12
This Essay demonstrates that the “death” of class actions after BMS has been greatly exaggerated. It presents the first comprehensive survey of federal district court cases that have considered BMS’s application to out-of-state unnamed class members in class actions. It finds that a substantial majority of district courts have not read BMS to prohibit those class members’ participation and have instead permitted class actions to proceed largely as they would have before BMS was decided.
This is an important time for these issues. It has been two years since the Supreme Court handed down its decision in BMS, and many federal district courts have weighed in on this major question. But federal appeals courts have yet to address the issue.13 We are therefore at a unique moment: more than fifty federal judges have addressed a novel issue of national significance, but there is still essentially no binding case law on the matter. There has also been little comprehensive analysis of the reasoning given by the judges who have discussed the issue so far.14
This Essay makes two contributions—one quantitative and one qualitative. First, the Essay provides a complete snapshot of how BMS has played out in federal district courts over the last two years. It finds that, contrary to the assertions of many commenters, a large supermajority of courts to consider the issue have held that the exercise of personal jurisdiction in nationwide class actions continues to be permissible in much the same way as it was before BMS. Of the sixty-four rulings to reach the question of BMS’s application to out-of-state unnamed class members, fifty have held that the exercise of jurisdiction is permissible—a nearly four-to-one ratio in favor of exercising jurisdiction.
This Essay’s second, qualitative contribution is to demonstrate that the question of BMS’s application to class actions is significantly more complex than many courts have acknowledged. The various decisions issued to date reveal that the question of how BMS applies in federal class actions could be treated as at least four distinct questions: (1) How does BMS apply to named plaintiffs serving as class representatives?; (2) How does it apply to unnamed class members?; (3) How does it apply in diversity cases?; and (4) How does it apply in federal question cases? Federal courts have at times confused, elided, or oversimplified these questions, which has resulted in miscitations and vague or potentially flawed holdings.
This Essay proceeds in three parts. Part I provides a brief overview of the Supreme Court’s decision in BMS and the issues it raises. Part II then presents a quantitative summary of the survey results. Finally, Part III discusses the BMS case law qualitatively, illustrating the distinct questions BMS raises and the ways some courts have gone astray.
Personal-jurisdiction doctrine limits the territorial scope of courts’ power.15 The doctrine provides that a defendant who is haled into court may be subject to the court’s power in two different ways. Where the defendant is “at home,” it is subject to “general jurisdiction,” and any suit may be brought against it regardless of where the underlying events giving rise to the suit occurred.16 In any other location, a defendant is only subject to “specific jurisdiction.”17 That is, a defendant may only be sued in the location if the suit “arises out of or relates to” some contact the defendant has had with that location.18
Over the last decade, the Supreme Court has dramatically narrowed the scope of power afforded under personal-jurisdiction doctrine. In Goodyear Dunlop Tires v. Brown and Daimler AG v. Bauman, the Court modified the standard for general jurisdiction, effectively limiting general jurisdiction over a corporate defendant to two locations: the forum state where it is incorporated, and the state where it has its principal place of business.19 As a result, in the years since Bauman, many cases that could previously have been brought under a theory of general jurisdiction must now rely on a specific-jurisdiction rationale.
BMS was one such case.20 In BMS, a group of more than six hundred people living in thirty-four states brought a mass action against the pharmaceutical company Bristol-Myers Squibb in California state court.21 They alleged that they had suffered severe side effects from taking the company’s blood-thinner drug Plavix, and brought claims for products liability, negligent misrepresentation, misleading advertising, and other alleged violations of California law.22 But significantly, the out-of-state plaintiffs did not allege that their injuries had taken place in California, that they had obtained Plavix in California, that the Plavix they took had been manufactured in California, or any other obvious chain of events connecting their individual claims to the state.23
Bristol-Myers Squibb contested the court’s jurisdiction over the out-of-state plaintiffs’ claims on that basis.24 The California state courts upheld the exercise of personal jurisdiction, largely on the rationale that the company’s marketing of Plavix in California meant that the nonresident plaintiffs’ claims were “sufficiently related” to the company’s in-state activity to justify specific jurisdiction.25 But the U.S. Supreme Court reversed, holding that the California courts lacked personal jurisdiction over Bristol-Myers Squibb as to the claims of the nonresident plaintiffs.26
The decision in BMS is not a model of clarity. As in Bauman, the Court purported to apply “settled principles,” but did so in a way that ignored longstanding practice.27 The Court emphasized that the plaintiffs “are not California residents and do not claim to have suffered harm in that State,” and that “all the conduct giving rise to the nonresidents’ claims occurred elsewhere.”28 It stated that “a defendant’s relationship with a . . . third party, standing alone, is an insufficient basis for jurisdiction,” and concluded that it was inappropriate for nonresident plaintiffs to bring their claims in California based on “[t]he mere fact that other plaintiffs were prescribed, obtained, and ingested Plavix in California.”29 It thus held that “California courts cannot claim specific jurisdiction,” a conclusion that it said was based on a “straightforward application . . . of settled principles of personal jurisdiction.”30
BMS was a mass action, in which hundreds of plaintiffs joined together in court but maintained their identity as individual parties. After BMS was handed down, though, it was not long before commenters began discussing its potential application to class actions.31 Some asked whether BMS would spell “the end of an era” for nationwide class actions, speculating that future class actions might only be brought in defendants’ home states.32 Because BMS was a mass action, in which all plaintiffs appear as named individuals with distinct claims, there was also doubt about whether the unnamed members of a class action would be subject to the same strictures.33 Further, the Court in BMS explicitly reserved the question of how its analysis would apply in federal courts, which are limited by the Due Process Clause of the Fifth Amendment rather than the Fourteenth Amendment.34 Could BMS have a certain application to class actions in state courts and a different application in federal courts? Because of the significance of these questions, the last two years have seen a regular stream of reports, analyses, and prognostications, with new decisions in the lower courts frequently reviving the debate.35
To date, however, efforts to analyze the general trend of lower-court decisions have been piecemeal and inconsistent. District courts analyzing the general lay of the land range from concluding that “most of” the cases permit the exercise of jurisdiction with respect to out-of-state unnamed class members, to seeing a “near even split” on the issue,36 to reporting a “litany” of decisions against exercising jurisdiction.37 Outside commentary, meanwhile, presents even more of a contrast, with one industry publication claiming that it “found the caselaw to stand at 12-2 in favor of applying Bristol-Myers Squibb . . . to curtail multi-jurisdictional class actions,”38 and the ABA’s Section of Litigation publishing a commentary stating that federal courts “generally align” with decisions that apply BMS to render multistate class actions unconstitutional.39
As Part III will describe, some of this inconsistency likely stems from the fact that the seemingly simple question “does BMS apply to class actions?” should really be thought of as several distinct questions, which courts and commenters do not always recognize or acknowledge. But regardless of the cause of these disagreements, the last two years have been defined both by the sense that BMS may be an important development for class actions and by inconsistent accounts as to just what BMS has actually meant so far. The following Part attempts to shine a light on the trends of the last two years by reporting the results of the first nationwide survey of federal district courts grappling with whether BMS applies to class actions.
It has now been two years since the Supreme Court’s decision in BMS, and it is a particularly good time to take stock. Dozens of federal district courts have weighed in on the correct application of BMS, but the appellate courts have yet to begin standardizing the law. This Part reports the results of a nationwide survey of federal district court cases, with an eye toward seeing whether any trends emerge as to the legal issues that the courts have identified and the outcomes they have reached.40
From June 2017 through September 2019, one hundred four rulings considered at least to some extent the possibility that BMS could affect the propriety of exercising personal jurisdiction over a defendant with respect to out-of-state unnamed class members.41 Of these, sixty-four reached a firm conclusion. The remaining forty declined to reach the issue for a variety of reasons. Some, for instance, held that the issue had been forfeited;42 others declined to address the issue at the motion-to-dismiss stage and decided instead to reach it at the class-certification stage.43
The sixty-four rulings that did reach the question of BMS’s application to unnamed class members were issued by fifty-six judges across twenty-four districts. Of those rulings, fourteen (about twenty-two percent) held that the court could not exercise jurisdiction over the defendant with respect to the unnamed out-of-state class (or putative class) members.44 The remaining fifty (about seventy-eight percent) held that such an exercise of jurisdiction was permissible.45
That initial breakdown—close to four-fifths of the cases permitting jurisdiction and about one-fifth holding that jurisdiction is improper—corroborates the impression of some judges that a majority of courts to consider the issue have held that BMS does not render multistate class actions impermissible even where general jurisdiction is unavailable.46 It runs contrary to the claims of some commenters that the weight of the case law opposes the exercise of jurisdiction.47
Further analysis reinforces this conclusion. The fourteen “no jurisdiction” rulings are highly concentrated: eleven came from the Northern District of Illinois, and four were from the same judge, Judge Harry Leinenweber.48 If the data are examined district by district, twenty of the twenty-four districts have only cases that permit the exercise of jurisdiction; one district has only cases that decline to exercise jurisdiction; and three districts have cases on both sides of the issue.49 As for breaking down the data judge by judge, of the fifty-six federal district judges who have weighed in on the issue, forty-seven (roughly eight-four percent) have upheld the exercise of jurisdiction with respect to out-of-state absent class members, and nine (roughly sixteen percent) have held the exercise of jurisdiction to be inappropriate.
In sum, thus far a strong supermajority of district court judges favor permitting the exercise of personal jurisdiction over defendants with respect to out-of-state unnamed class members. More than four out of every five judges to consider the issue have come out the same way. Still, the presence of a notable minority of disagreeing judges means that this supermajority rule cannot be termed a consensus. Uniformity will likely only be reached if the federal courts of appeals all choose the same path, or if the Supreme Court takes a new case to clarify BMS’s import.
Cases raising these issues have begun to reach the federal courts of appeals, but no circuit has decided the issue yet.50 Arguments have been heard in the Fifth, Seventh, and D.C. Circuits this year, but opinions have yet to be issued.51 The case law will most likely continue to develop for at least a year, and quite possibly more, before a consensus emerges in the appellate courts or the Supreme Court resolves any splits that may occur. The following Part considers what courts, litigants, and commenters alike can learn in the meantime from the reasoning that judges on both sides have given for their decisions.
In addition to the trend in case outcomes discussed above, several patterns emerged from examining the rulings covered by the survey.
To begin with, many cases organized their approach to BMS’s application by noting what BMS did not say or do.52 The BMS majority opinion explicitly left open “the question whether the Fifth Amendment imposes the same restrictions on the exercise of personal jurisdiction by a federal court.”53 And as Justice Sotomayor wrote in her dissent, BMS did not “confront the question whether [it] would also apply to a class action.”54 From the face of the opinion, then, BMS presented a federal court confronting a class action with two potential grounds for distinction: differences between class and mass actions, and differences between federal and state courts.
The survey revealed that judges were more likely to rest their holdings on the class/mass distinction than on the federal/state distinction. As detailed below, the main way that courts distinguished BMS was by differentiating the unnamed members in class actions from the named plaintiffs in BMS. Judges were less likely to rely on distinctions between state and federal courts, although the difference was noted in several cases.55 The survey also revealed that these two categorical distinctions (class/mass and federal/state) yielded another set of potentially relevant dissimilarities: the difference between unnamed class members and named class representatives, and the difference between federal courts sitting in diversity and federal courts hearing federal questions. In other words, the question “does BMS apply to class actions in federal court?” can be treated as four distinct questions about the case’s significance for (1) unnamed class members; (2) named plaintiffs; (3) diversity jurisdiction; and (4) federal-question jurisdiction.
This Part discusses the lessons that can be learned from identifying and distinguishing each of these questions, which many individual cases have failed to do—resulting in misunderstandings and false generalizations. Examining the BMS case law as a whole thus helps diagnose where courts have gone wrong, understand which issues many courts have agreed on, and see which questions remain open for the future.
As noted above, the most common way courts in the survey distinguished BMS was by differentiating class actions from mass actions. Of the fifty cases permitting class actions to proceed, thirty-two distinguished BMS by relying at least in part on distinctions between named parties (like the plaintiffs in BMS) and unnamed class members. But class actions themselves also have both named and unnamed parties, and some courts did not reliably distinguish between the two.56 This Section first discusses the distinction between unnamed class members and named parties in general, and then discusses the cases that have failed to distinguish between named parties and unnamed class members in the same class action.
Courts that drew a line between the named parties in BMS and unnamed parties in class actions invoked a variety of specific legal differences, both formal and functional, to justify this distinction. Many judges relied on the fact that named plaintiffs in mass-tort actions are real parties in interest, whereas unnamed class members’ claims “are prosecuted through representatives.”57 Real parties, unlike unnamed class members, are “personally named and required to effect service” on a defendant.58 Other cases stressed the “functional differences” between unnamed class members and named parties in a mass tort that result from Rule 23 of the Federal Rules of Civil Procedure.59 As one court put it, Rule 23 means that a class-action defendant faces “a unitary, coherent claim to which it need respond only with a unitary, coherent defense.”60 In contrast, in a mass action there may be “significant variations” in the plaintiffs’ claims, requiring different evidence, legal theories, and so on.61 Other cases drew parallels between the personal-jurisdiction context and other contexts in which the distinction between named and unnamed class members has arisen, emphasizing that absent class members, unlike named parties, are not relevant “for purposes of diversity of citizenship, amount in controversy, Article III standing, and venue.”62
Doctrinally, the relevance of these distinctions was most often grounded either in the Supreme Court’s decision Devlin v. Scardelletti63 or in constitutional due process. Courts regularly invoked Devlin for its statement that unnamed class members “may be parties for some purposes and not for others.”64 Although Devlin does not create a simple rule or test for determining when to treat absent class members as parties, the Supreme Court indicated that the question requires a context-dependent inquiry in which the choice is “justified by the goals of class action litigation.”65 District courts have applied this reasoning in the BMS context; as one court has said, “[t]he efficient administration of class actions would be compromised by requiring [courts] to make personal jurisdiction determinations for every named and potential unnamed plaintiff.”66 Courts have also observed an absence of precedent in favor of treating unnamed class members as parties for purposes of personal jurisdiction,67 concluding that the historical understanding appears to have been that unnamed class members are not relevant to the personal-jurisdiction inquiry.68
As for distinctions grounded in due process, courts generally invoked Rule 23 as providing due-process protections that render class actions materially different from mass actions. As one court put it, “the certification procedures set forth in Rule 23 not only protect absent class members’ due-process rights but also the rights of defendants.”69 By presenting defendants with a unified case to defend against rather than with many varied claims, Rule 23 mitigates the burden placed on them—a primary concern of the personal-jurisdiction analysis.70 In addition to the observation that, as a general matter, class actions require less varied defenses than mass actions, at least one court noted that the marginal burden of defending against additional class claims is particularly low where a defendant would already be in a given state defending against a statewide class action.71 In such a scenario, given the similarity that Rule 23 requires between claims within a given state and those outside the state, the court ruled that “there is little hardship, as a jurisdictional matter, for [a defendant] to also litigate the nationwide class claims.”72
For the most part, the cases holding that BMS does apply with respect to absent class members do not directly respond to these reasons. Only one of the fourteen “no jurisdiction” cases, for instance, mentions or cites Devlin v. Scardelletti, distinguishing it on the basis that Devlin involved a certified class, unlike the putative class in the case at hand.73
Instead, the discussion in the “no jurisdiction” cases has mostly centered around broad invocations of due process, with the most common reasoning being some version of the statement that “a defendant’s due process rights should remain constant regardless of the suit against him, be it an individual, mass, or class action.”74 Some courts have grounded that reasoning in the Rules Enabling Act, “which instructs that the federal court rules of procedure shall not abridge, enlarge, or modify any substantive right.”75 Under this reasoning, if a defendant’s due-process rights would preclude a claim from being brought by individuals without the class device, it would be a violation of the Rules Enabling Act for Rule 23 to change that outcome. This approach is bolstered by reading BMS to stand for a broad holding that “the Fourteenth Amendment’s due process clause precludes nonresident plaintiffs injured outside the forum from aggregating their claims with an in-forum resident.”76 None of the “no jurisdiction” cases addresses the argument that Rule 23 provides safeguards for defendants by streamlining the claims against them and allowing for a single unitary response.77
In contrast to the disagreements about unnamed class members, there is a general consensus that the requirements of personal jurisdiction, including those articulated in BMS, apply to named plaintiffs wherever they bring their case.78 There is no clear reason why they would not. One oft-cited decision on this point, Greene v. Mizuho Bank,is representative in its holding that the normal rules of personal jurisdiction apply to all named plaintiffs in a lawsuit “with equal force whether or not the plaintiff is a putative class representative.”79
This consensus, however, has been misread by several courts as extending to the unnamed-class-member issue. Greene, for instance, has been favorably cited in at least four different cases for the broad statement that “Bristol-Myers extends to federal court class actions,” and then applied indiscriminately to exclude unnamed class members from litigation.80 Greene, which addressed only a named plaintiff, does not support such a conclusion without the additional determination that unnamed class members and named plaintiffs should be treated alike. In fact, Greene’s presiding judge, Judge Feinerman of the Northern District of Illinois, came down against applying BMS to unnamed class members in Al Haj v. Pfizer,issued shortly after Greene.81 Al Haj invoked several of the reasons discussed in the previous section to reach its conclusion: the distinction between a mass and a class action is “critical,” Judge Feinerman wrote, because class actions contain absent class members—individuals who are not treated as parties for many doctrines that govern whether a court may hear a claim, such as determining diversity jurisdiction, Article III standing, and venue.82 Judge Feinerman concluded that personal jurisdiction was analogous to these contexts, and absent class members therefore should not be treated as parties for purposes of personal jurisdiction—particularly when any other decision would result in an “extraordinary sea change in class action practice,” in tension with BMS’s declaration that it applied only settled law.83 Al Haj, which is one of the most thorough and most cited cases declining to apply BMS to unnamed class members, is thus entirely consistent with Greene, but not consistent with subsequent cases’ overbroad reading of Greene as applying to “class actions” in general as opposed to named plaintiffs in particular. This eliding of the distinction between named and unnamed plaintiffs has occurred in commentary discussing BMS as well.84
It is worth noting, too, that even though there is consensus that BMS’s personal-jurisdiction holding applies to the named plaintiffs in a class action, there is still a fair degree of uncertainty in both federal and state courts as to what that application should look like. Some courts have taken the Supreme Court at face value when it said that BMS involved only the application of “settled principles” and did not change the law.85 Others have held that BMS materially changed the standards governing personal jurisdiction, for instance by changing the weight to be given to specific factors when assessing whether personal jurisdiction is permissible,86 or by rejecting a “stream of commerce” approach.87 While these interpretations of BMS are not specific to class actions, they will nonetheless influence class litigation given the consensus that BMS applies to named class representatives.
BMS, which was an appeal from California state court, explicitly left open “the question whether the Fifth Amendment imposes the same restrictions on the exercise of personal jurisdiction by a federal court.”88 The BMS opinion itself was grounded in the Due Process Clause of the Fourteenth Amendment, and emphasized the “federalism interest” protected by that clause via personal-jurisdiction doctrine.89 As BMS notes, personal-jurisdiction doctrine has historically been connected to horizontal federalism—the idea that in a system of coequal state sovereigns, “[t]he sovereignty of each State . . . implies a limitation on the sovereignty of all its sister States,” and requires some rules to referee which state courts may have power to adjudicate any given dispute.90
Numerous decisions considering BMS have since held that these concerns do not apply to the same degree in multistate class actions being heard in federal court.91 As one court put it, BMS protected the “well-rooted principles” that prevent states from “reach[ing] out beyond the limits imposed on them by their status as coequal sovereigns in a federal system.”92 But federal courts “represent the same federal sovereign,” with territorial authority that extends nationwide.93 In other words, a federal court hearing a case in one location does not impinge on the sovereign authority of other federal courts in different locations, because all federal courts represent the same sovereign. BMS’s concerns therefore do not arise.
Nonetheless, as mentioned above, this basis for distinguishing BMS has been much less common than the named-party/unnamed-class-member distinction. That may be true for two reasons. First, where a court decides that unnamed class members do not need to be treated as parties for purposes of personal jurisdiction, it is unnecessary to reach the question of whether BMS applies differently to them in federal court than it would in state court.94 Second, as discussed below, either federal common law or the Federal Rules of Civil Procedure may tie the exercise of jurisdiction in a federal court to the geographic limitations of the state in which it sits, making the distinction between state and federal courts less salient.
Among courts that have raised the state/federal distinction, there is no strict correlation between where courts come down on the unnamed-class-member issue and how they view the federal/state distinction; courts on both sides of the class-member issue have given different weight to the fact that BMS was a state-court case grounded in the Fourteenth Amendment. Several courts have, however, suggested that the correct application of BMS in federal court may turn at least in part on yet another distinction: whether the court is sitting in diversity or exercising federal-question jurisdiction.95 The following Section explores that distinction.
The rationale generally offered by courts emphasizing that they are sitting in diversity is the broad principle that “in diversity jurisdiction cases . . . personal jurisdiction is governed by the law of the forum state.”96 This relatively simple statement is often not elaborated on, but comparing the authorities cited by the various cases that address the federal/state issue demonstrates two distinct rationales on offer for the application of state-court limitations to federal courts in diversity: one common-law rationale and one rationale based on Rule 4 of the Federal Rules of Civil Procedure. Teasing out these two different rationales shows that there are potentially important considerations that have been generally overlooked in the case law so far.
The common-law rationale relies on a longstanding rule of federal common law, with historical antecedents going back to the early nineteenth century, that “a federal district court will not assert jurisdiction over a foreign corporation in an ordinary diversity case unless that would be done by the state court . . . in the state where the court sits.”97 The Rule 4 rationale, in contrast, relies on authority that is ultimately grounded in Federal Rule of Civil Procedure 4(k)(1)(A).98 That rule provides that “[s]erving a summons . . . establishes personal jurisdiction over a defendant . . . who is subject to the jurisdiction of a court of general jurisdiction in the state where the district court is located.”99 As the broadest of Rule 4(k)’s options for serving a summons, this provision is often invoked as the basis for personal jurisdiction in federal-question and diversity cases alike.100
These different rationales raise a few considerations that may be relevant to the proper scope of BMS’s application. First, as long as there is no nationwide service-of-process provision, Rule 4(k)(1)(A) applies in both federal-question cases and diversity cases.101 If that rule is the basis for incorporating BMS’s limitations in the federal class-action context, then, it’s not clear why courts would emphasize the fact that they are sitting in diversity.
But, more importantly, it is also not clear exactly how Rule 4’s provisions for service of process incorporate BMS’s limitations in the class-action context to begin with. Class-action jurisprudence has never required a defendant to be served by unnamed class members, whether before or after certification. And although service-of-process restrictions do apply to named plaintiffs, when those plaintiffs serve a defendant, they do not yet represent out-of-state class members, as there has been no class certification. No case discussing BMS to date has explained the specific mechanism by which Rule 4 would incorporate BMS with respect to absent class members. The trend, instead, has been to rely on broad statements in cases citing Rule 4, without explaining the underlying reasoning.102
The rationale relying on federal common law is similarly underdeveloped. As one foundational case discussing this doctrine notes, “Congress or its rule-making delegate” can always override the federal common law.103 Federal courts depart from the common-law rule in other contexts when doing so is permitted by rule—for instance, when the 100-mile bulge provision of Rule 4(k)(1)(B) extends across state boundaries104—or when a federal statute provides a basis for nationwide service of process.105 As a result, it is not obvious that the rule restricting federal-court jurisdiction applies where a defendant is validly served under Rule 4 and a class is appropriately certified under Rule 23. And, finally, it may be possible to read the common-law rule as simply being codified in Rule 4(k)(1)(A), which would suggest that there would be little meaningful difference between citing case law that invokes the common-law rule as opposed to the Federal Rules of Civil Procedure.106
The application of BMS to federal courts sitting in diversity is thus more complicated than the courts to address the issue so far have acknowledged; and there are at least some reasons to think that neither rationale clearly resolves the question whether BMS should restrict federal courts’ ability to exercise personal jurisdiction over defendants with respect to unnamed class members in multistate or nationwide class actions.
There is even less discussion as to whether BMS applies in some distinct way to federal-question cases.107 The cases that emphasize the significance of diversity jurisdiction may raise the inference that BMS could have a different application where federal district courts are hearing cases that arise from federal questions. It is not always clear, however, what (if any) inference is intended. In one case, for instance, Judge Leinenweber of the Northern District of Illinois said that BMS was “clearly limited . . . to state court jurisdiction,” but that limitation was “no barrier . . . where this Court sits in diversity jurisdiction and accordingly looks to Illinois state law.”108 Such language might suggest that the outcome may be different in a federal-question case. But in another case, Judge Leinenweber concluded that BMS “applies to federal courts, especially where . . . the court sits in diversity jurisdiction,” suggesting that BMS might also apply even outside of diversity jurisdiction.109
The open questions just discussed as to diversity cases may have implications for federal-question cases as well. If BMS’s limitations apply via Rule 4, for instance, rather than a diversity-specific common-law rule, they would apply in federal question and diversity cases alike. Ultimately, then, it may be that focusing on the differences between diversity and federal-question cases is largely a red herring, particularly when compared with the more important distinctions between named and unnamed class members or the Constitution’s limits on state versus federal courts.
Two years after BMS, federal courts have considered on more than sixty occasions whether the decision applies to federal class actions. Examining these decisions illustrates that the question “does BMS apply to class actions?” should really be reframed as “how does BMS apply to class actions?” There are multiple decision points when it comes to applying BMS in multistate class actions in federal court, including whether to treat absent class members the same as named parties and whether to treat litigation in federal court the same as litigation in state court.
Examining the decisions applying BMS to date also suggests that there are better and worse ways to approach these questions. Although some cases have addressed these various questions distinctly, others have failed to recognize them, made false generalizations, or misapplied other cases dealing with the issue. Many judges have failed to respond to the best arguments on the other side of the issue or failed to explain their own reasoning in depth.
As a general matter, there is a consensus that BMS applies to named plaintiffs, as the rules of personal jurisdiction apply generally to named parties in litigation. As for unnamed class members, four out of every five federal district court judges to rule on the question have concluded that BMS does not prohibit a class action from proceeding on a theory of specific jurisdiction, even if it contains unnamed members who reside outside the forum state. Judges reaching that conclusion have most often relied on analogies to other contexts in which unnamed class members are not treated as parties, such as evaluating diversity of citizenship, establishing the monetary threshold for amount in controversy, determining Article III standing, and establishing venue. The minority of judges who have held otherwise, meanwhile, have tended not to engage with this line of argument, and have instead emphasized defendants’ due-process rights, saying that the form that litigation takes should not change whether a court may exercise jurisdiction over a defendant with respect to particular claims.
Taking a look at the last two years of BMS case law as a whole thus tells us where we are in this potentially significant moment in class-action law. Despite some reports to the contrary, a strong supermajority of the federal district judges who have considered the issue have ruled in favor of letting class actions proceed largely as they did before BMS. As federal appellate courts begin to weigh in, we will see whether this clear pattern will continue or whether BMS will be read to curtail multistate and nationwide class actions on grounds of personal jurisdiction. Either way, the interpretation of BMS is likely to have significant consequences for class litigation. How courts read BMS will influence where many class actions get filed in the years to come, and whether some potential class actions get filed at all.
Daniel Wilf-Townsend is of counsel at Gupta Wessler, PLLC; J.D., Yale Law School, 2015. Special thanks to Andrew Bradt, Myriam Gilles, Deepak Gupta, Joshua Matz, Jon Taylor, Matt Wessler, and Rachel Wilf-Townsend for helpful conversations regarding the issues discussed in this Essay, and the editors of the Yale Law Journal Forum for their many excellent suggestions. I would also like to thank Ben Elga, Brian Shearer, and Justice Catalyst for support and advice on an earlier project that led to the idea for this Essay. Disclosure: I have assisted on briefs in cases raising the question of Bristol-Myers Squibb’s application to class actions. The opinions and analysis expressed in this Essay are my own.
To conduct the survey, I began with Westlaw’s “citing references” tool and identified all federal court rulings citing BMS. I then conducted an intentionally overbroad search within those rulings to identify all cases containing any of the phrases “class action,” “class members,” or “class certification.” This resulted in 190 rulings when Westlaw was searched on May 19, 2019.
I then examined each ruling for relevance. Rulings were deemed relevant if they were (1) a certified class action or a putative class action and (2) considered the possibility that BMS could affect the propriety of exercising personal jurisdiction over a defendant with respect to unnamed class members. Rulings were not deemed relevant if they merely referenced other proceedings in the same case in which the Court had considered the issue,110 or if they flagged BMS as a potential issue to be considered in the future but did not discuss it in the ruling at hand.111 Rulings involving collective actions under the Fair Labor Standards Act, as opposed to Rule 23 class actions, were also excluded, as some of the case law addressing BMS’s application to FLSA actions relies on distinctions between the FLSA’s collective-action mechanism and Rule 23.112
Rulings were considered relevant even if the court ultimately deemed the BMS issue to be forfeit, untimely, or otherwise inappropriate to reach. These cases were included because of the possibility that courts would give multiple alternative holdings—for instance holding both that BMS did not deprive the court of personal jurisdiction and also that, in any event, the defendant’s personal-jurisdiction argument had been waived.113 Doubts were resolved in favor of being maximally inclusive at this stage.
After sorting through the 190 rulings for relevance, eighty-four rulings remained. These eighty-four rulings are listed in Appendix B. These rulings were read and coded along a variety of axes, including whether they did or did not uphold the exercise of personal jurisdiction with respect to unnamed, out-of-state class members, as well as which among various common rationales were relied on in support of their holdings. Of the eighty-four rulings, fifty-four issued a holding on the question of whether BMS requires courts to apply the standards of specific jurisdiction to out-of-state unnamed class members in a class action. The main text goes into further detail regarding those cases.
This process was repeated on July 18, 2019. The new search resulted in nineteen new federal district court rulings citing BMS and containing any of the phrases “class action,” “class members,” or “class certification.” Of these nineteen rulings, six were relevant and thirteen not relevant. Of the relevant rulings, five reached a holding on the question of BMS’s application to unnamed out-of-state class members, and were coded and added to the original database.
This process was repeated a final time on October 8, 2019. The new search resulted in twenty-three new federal district court rulings citing BMS and containing any of the phrases “class action,” “class members,” or “class certification.” Of these twenty-three rulings, fourteen were relevant and nine not relevant. Of the relevant rulings, five reached a holding on the question of BMS’s application to unnamed out-of-state class members, and were coded and added to the original database.
Appendix B contains the rulings from the May 19, July 18, and October 8 searches. Altogether, there were 104 relevant rulings; sixty-four rulings reached a holding; and, of the rulings that reached a holding, fifty permitted the exercise of jurisdiction and fourteen did not.
This Appendix contains the rulings that were generated using the methodology described in Appendix A. All of these cases discuss the application of Bristol-Myers Squibb to unnamed out-of-state members of a certified or putative class action. They are sorted into three categories: rulings holding that BMS does not prohibit the exercise of personal jurisdiction over defendants with respect to unnamed out-of-state class members; rulings holding that BMS does prohibit the exercise of jurisdiction with respect to unnamed out-of-state class members; and rulings that do not reach a holding on the issue.
rulings permitting the exercise of jurisdiction
rulings holding that jurisdiction is not permitted
rulings that do not reach a holding