9th Circuit also weighs in on personal jurisdiction at class certification stage

Last year, the 7th and D.C. U.S. Circuit Courts of Appeals addressed the contours of personal jurisdiction in federal class actions after the U.S. Supreme Court's decision in Bristol-Myers Squibb Co. v. Super. Ct. of Cal., San Francisco Cty., 137 S. Ct. 1773 (2017). In Bristol-Myers, the U.S. Supreme Court held that a California state court, pursuant to the 14th Amendment's due process clause, could not exercise specific personal jurisdiction over nonresident plaintiffs' claims in a mass action against a non-resident company.

In Molock v. Whole Foods Market Grp., Inc., 952 F.3d 293 (D.C. Cir. March 10, 2020), "the defendant moved to dismiss all nonresident putative class members for lack of personal jurisdiction." The district court denied the motion on the merits. On appeal, the D.C. Circuit held that "[b]ecause the class in this case has yet to be certified, [defendant's] motion to dismiss the putative class members [for lack of personal jurisdiction] is premature."

Specifically, the court noted "[p]utative class members become parties to an action -- and thus subject to dismissal -- only after class certification." Although the D.C. Circuit refrained from explicitly ruling whether Bristol-Myers applies to federal class actions, Judge Laurence H. Silberman noted, in dissent, that "[a]lthough the Supreme Court avoided opining on whether its reasoning in the mass action context [in Bristol-Myers] would apply also to class actions, it seems to me that logic dictates that it does."

In Mussat v. IQVIA., Inc., 953 F.3d 441 (7th Cir. March 11, 2020), the defendant "moved to strike the class definition, arguing that the district court did not have personal jurisdiction over the non-Illinois members of the proposed nationwide class." The district court agreed, granting the motion to strike, "reasoning that under the Supreme Court's decision in Bristol-Myers [], not just the named plaintiff, but also the unnamed members of the class, each had to show the minimum contacts between the defendant and the forum state."

On appeal, the 7th Circuit reversed, distinguishing Bristol-Myers which concerned a "coordinated mass action" rather than a class action. This distinction, according to the 7th Circuit, made Bristol-Myers inapposite. The 7th Circuit emphasized that "absent class members are not considered parties for assessing whether the requirement of" diversity jurisdiction is met, "[n]or are absent class members considered when a court decided whether it is the proper venue." Thus, the 7th Circuit saw "no reason why personal jurisdiction should be treated any differently from subject-matter jurisdiction and venue: the named representatives must be able to demonstrate either general or specific personal jurisdiction, but the unnamed class members are not required to do so."

Following Molock and Mussat, the 9th Circuit has now joined the mix in Moser v. Benefytt, Inc., __ F.4th __, 2021 WL 3504041 (9th Cir. Aug. 2021). Moser is a nationwide class action in federal court in California involving alleged violations of the Telephone Consumer Protection Act. After the district court denied the defendant's 12(b)(6) motion to dismiss, the plaintiff "asked the district court to certify two nationwide classes." In response, the defendant challenged class certification, arguing the district court lacked personal jurisdiction over all nonresident putative class members "under Bristol-Myers."

The district court, however, did not reach the merits of the defendant's argument. Reasoning the defendant "waived its personal jurisdiction defense by not raising it at the motion to dismiss stage," the district court refused to address the defendant's Bristol-Myers argument and certified "two nationwide classes."

On appeal, after finding that it had jurisdiction under Federal Rule of Civil Procedure 23(f) "to review the personal jurisdiction and waiver issues that form part of the district court's class certification decision," the 9th Circuit reversed. Tracking the reasoning of the D.C. Circuit in Molock and the 5th Circuit in Cruson v. Jackson Nat'l Life Ins. Co., 954 F.3d 240 (5th Cir. 2020), the 9th Circuit found that the defendant "could not have moved to dismiss on personal jurisdiction grounds the claims of putative class members who were not then before the court." To hold otherwise, the 9th Circuit reasoned, "would be to endorse the novel and surely erroneous argument that a nonnamed class member is a party to the class-action litigation before the class is certified."

The 9th Circuit also rejected the plaintiff's argument that the defendant "had to raise its personal jurisdiction defense because it had 'reasonable notice' of a Bristol-Myers-based objection when it moved to dismiss." As the defendant was not "required to seek dismissal of hypothetical future plaintiffs," the 9th Circuit vacated the class certification order and remanded to the district court with instructions to address the merits of the defendant's Bristol-Myers argument.

Like the D.C. Circuit in Moser, the 9th Circuit refrained from explicitly deciding whether Bristol-Myers precludes the exercise of personal jurisdiction over nonresident putative class members in a federal court forum in which a defendant is not "at home." Nevertheless, Moser gives defendants in the 9th Circuit breathing room to challenge personal jurisdiction over putative class members at class certification without fear of waiver. 