Courts are still going both ways on applying Bristol-Myers Squibb to class actions. Two recent decisions highlight this split.

<i>Bristol-Myers Squibb</i> Continues to Be a Mixed Bag in the Class Action ContextThe first—and we’ll always start with the good news—comes out of the District of Massachusetts in Roy v. FedEx Ground Package System, Inc. There, the court held that Bristol-Myers Squibb applies to collective actions under the Fair Labor Standards Act (FLSA) and limited opt-in notices to drivers who worked in the forum state. In doing so, the court rejected the idea that FLSA actions are materially different from the mass tort action in Bristol-Myers Squibb. Although the court hedged a bit on whether Bristol-Myer would apply in every context, it quoted Chavez v. Church & Dwight Co. for the proposition that “[n]othing in Bristol-Myers suggests that its basic holding is inapplicable to class actions.”

Apart from its narrow (but important) application in the FLSA context, Roy aligns with the view that Bristol-Myers Squibb does not announce a limited rule, but rather defines what due process means in the context of personal jurisdiction. It joins these other 2018 decisions:

But not all courts are in agreement. In Jones v. Depuy Synthes Products, Inc., one judge in the Northern District of Alabama declined to apply Bristol-Myers Squibb to a class action at the motion-to-strike stage. While the court in Jones disagreed with many of the arguments class-action plaintiffs have used to avoid Bristol-Myers Squibb (such as the assertion that Bristol-Myers Squibb does not apply to federal courts sitting in diversity), it ultimately concluded that, at least at the early stage of the case, Rule 23 provided adequate procedural safeguards for defendants’ due process rights.

Jones joins with two other cases refusing to apply Bristol-Myers Squibb in the class context:

From these cases, we see a new trend emerging: Many lower courts are taking a “wait and see” approach in addressing the applicability of Bristol-Myers Squibb. That approach was followed in Jones and also in In re Samsung Galaxy Smartphone Marketing and Sales Practices Litigation, where the court dismissed one plaintiff’s claims but also observed, “given that the law is still evolving in this area, the Court is willing to consider any developments that take place during the pendency of the stay [the court was ordering].” Thus, while defendants can and should continue to make early attacks on overbroad, multi-state putative classes, they should also recognize that courts may be more willing to apply Bristol-Myers Squibb to narrow the class at the class certification stage, rather than on the pleadings at the outset. Until the courts of appeal or the U.S. Supreme Court settle this issue, defendants should definitely continue to assert and preserve personal jurisdiction arguments, even if district courts defer consideration of those arguments at the pleading stage.

In the meantime, the battle over applying Bristol-Myers Squibb will shift to the courts of appeal, where we are watching for the first decisions to be handed down. Molock v. Whole Foods Market, currently on interlocutory appeal in the D.C. Circuit, is a likely early candidate. We continue to monitor these developments closely.

Standing in Data Breach Cases Likely Heading Back to the Supreme CourtData breach plaintiffs often have a very difficult time stating a concrete injury, and courts have wrestled with whether these plaintiffs can file suit in federal court. We have been watching this issue and writing about it frequently. The issue is whether plaintiffs have suffered an “injury in fact” that gives them Article III standing. The Supreme Court’s 2016 decision in Spokeo v. Robins took a narrow view of Article III standing where the plaintiffs alleged that their federal statutory rights were violated, but did not allege that they suffered any factual injury beyond the statutory violation. Spokeo gave defendants strong arguments to dismiss data-breach cases for lack of standing, but results have been mixed—perhaps because Spokeo addressed federal claims and not state-law negligence claims that are most commonly asserted after data breaches. Spokeo has proven to be a mixed blessing.

Now the issue looks to be heading back to the Supreme Court in Zappos.com, Inc. v. Stevens. That case highlights how the various circuits have taken divergent views on standing in data breach cases. The Supreme Court has not granted certiorari yet, but court watchers have singled this case out as a likely grant. We are monitoring the case closely, as any ruling from the Supreme Court in the data-breach context would have far-reaching effects on this rapidly developing area of the law.

Stay tuned.

American Pipe? No Cigar: Third Circuit Rejects Tolling for Claims of Named PlaintiffsEarlier this year, the Supreme Court in China Agritech Inc. v. Resh conclusively established that equitable tolling of the statute of limitations for putative class members – known as American Pipe tolling – applies only to class members’ individual claims, and not to later-filed class claims (sometimes referred to as “piggyback” class actions). (We discussed China Agritech and its import in a previous blog post.) Last week, the Third Circuit applied China Agritech and upheld the dismissal of an attempted piggyback class claim in Weitzner v. Sanofi Pasteur, Inc. Of interest, the court also rejected a novel argument advanced by the plaintiffs: that American Pipe tolling can be used to save otherwise time-barred claims by plaintiffs who were named plaintiffs in a previous failed class action.

Weitzner involved a Pennsylvania physician and his wholly owned professional corporation, which were sent two unsolicited faxes in 2004 and 2005. The physician filed a state court class action alleging violation of the Telephone Consumer Protection Act (TCPA); the state court denied class certification in 2008. Rather than continue to pursue his individual claim in state court (a claim that apparently was never finally dismissed), Dr. Weitzner and his P.C. instead filed a TCPA class action in federal court in 2011 against the same defendants and involving the same unsolicited faxes. Recognizing that plaintiffs’ claims were time-barred unless American Pipe tolling applied, the district court granted summary judgment for defendants on limitations grounds, and plaintiffs appealed.

The Third Circuit held that China Agritech foreclosed any argument that the statute of limitations could be tolled as to plaintiffs’ class claims and that summary judgment was properly granted as to those claims. China Agritech requires this result, but we remain gratified that the Supreme Court’s clear rule applies even in courts (such as the Third Circuit) that had allowed piggyback class actions prior to China Agritech.

In light of prior jurisprudence, the Third Circuit’s additional holding is also noteworthy. The court rejected plaintiffs’ arguments that the statute of limitations could be tolled for Dr. Weitzner’s and his P.C.’s individual claims. The court acknowledged that certain language from American Pipe arguably supported plaintiffs’ position. After all, Weitzner and his P.C. were putative class members in the state court class action, and American Pipe ostensibly applies to “all asserted members of the class who would have been parties had the suit been permitted to continue as a class action.” Despite this broad language, the court recognized that applying tolling to a named plaintiff served neither of the rationales for the American Pipe rule, efficiency and protection of the interests of unknowing class members. In the end, the court held, tolling the statute of limitations for a named plaintiff – who had already asserted his claim, and could have pursued it in the earlier litigation – “serves no legitimate purpose.” As for the P.C., the Third Circuit noted that the doctor was its sole shareholder, and held that it was “not the type of unaware, absent class member American Pipe was designed to protect.”

Standing alone, Weitzner can be seen as an unremarkable case: How many plaintiff’s lawyers would try to argue with a straight face that asserting claims on a class basis tolls the statute of limitations and allows for the reassertion of those same claims by the same named plaintiff individually in another case? Still, seeking a second bite at the apple in a different court is far from unheard of, and this argument – illogical as it seems – has been made before.

Even beyond the specifics of the arguments and holdings of Weitzner, the early impact of China Agritech is positive. The Third Circuit got the Supreme Court’s message and quite rightly declined the invitation to expand American Pipe far beyond its original purpose and rationale. We are optimistic that further creative adventures in class action equitable tolling will receive similar treatment in other courts.