We have been closely watching how courts have applied the Supreme Court’s Bristol-Myers Squibb decision in the class action context, and the early results are mixed. But the Northern District of Illinois made a big step in the right direction when it decided America’s Health and Resource Center, Ltd. v. Promologics, Inc. The court granted the defendants’ motion to strike the class allegations because (among other things) the court lacked personal jurisdiction over non-Illinois members of the alleged class.
Promologics is a TCPA case involving alleged junk faxes. While the case’s discussion is not clear on where the allegedly improper faxes originated, they did not come from Illinois. Instead, they were sent to recipients both inside and outside of Illinois.
In response to the defendants’ B-MS jurisdictional objection, the plaintiffs argued that B-MS does not apply to class actions, and in the alternative, that defendants’ challenge was untimely.
The court dealt swiftly and decisively with the threshold question applying Bristol-Myers Squibb to class actions. Grabbing hold of the Supreme Court’s statement that “due process requires ‘a connection between the forum and the specific claims at issue,’” the court expressed its “belief that Bristol-Myers Squibb applies in equal measure to class actions.” It also quoted the Eastern District of New York’s pithy line from In re Dental Supplies Antitrust Litigation: “The Constitutional requirements of due process do[ ] not wax and wane when the complaint is individual or on behalf of a class.”
The court had little trouble applying B-MS to this class action, but wrestled more with the question of timeliness—and the defendants almost certainly experienced a range of emotions as they read the court’s opinion. As we all know from Civil Procedure 101, defendants must raise personal jurisdiction challenges in their first responsive pleading or else the objection is waived. The Promologics defendants did not do so because Bristol-Myers Squibb had not then been decided. After that opinion came down, they argued that it changed the law enough to justify giving them a chance to raise it. The court disagreed. It concluded that B-MS merely clarified the law about personal jurisdiction, but did not so fundamentally change the law as to excuse the defendants’ failure to raise a timely objection. “Without an intervening change in the law and without an earlier, controlling authority blockading such efforts, Defendants’ failure to mount a timely challenge to personal jurisdiction constitutes forfeiture of that challenge.”
At this point, things look pretty bleak, but the court “excuse[d] the forfeiture” on its own initiative by noting that courts have the independent power to apply the proper governing law. Thus, regardless of who raised what issues when, the court found that Bristol-Myers Squibb was the controlling law, and applied it accordingly.
This case helps defendants in three important ways:
First, particularly while we wait for the first appellate court to weigh in on the issue, the more district courts that apply B-MS to class actions the better. Appellate courts will certainly do more than count district court opinions when they decide whether to apply B-MS in the class context, but they will still count cases. And in the task of persuading the first appellate court or another district court, every good case makes the string cite longer and adds another helpful quote to the arsenal available to defendants.
Second, though the passage of time means that fewer pre-B-MS cases are percolating through the system, the court’s willingness to apply B-MS in the face of a finding of forfeiture reminds companies that they may be able to press this argument even if their early case pleadings did not raise it.
Third, note carefully that the court found that B-MS did not radically change the law, a view that defendants should adopt. Instead of treating B-MS as a landmark case, consider that it merely follows on and clarifies personal jurisdiction law going all the way back to International Shoe. Relying on the case in this way puts defendants on the strongest footing to defeat the argument that B-MS does not apply in class actions. There is no special rule for specific personal jurisdiction in class actions or mass actions—there is just one rule for all cases. That is the true rule of B-MS.