The U.S. Court of Appeals for the Seventh Circuit recently held that a putative nationwide class action brought under the Telephone Consumer Protection Act (TCPA) could proceed, finding that it is unnecessary for a district court to establish personal jurisdiction over out-of-state putative class members’ claims.
The plaintiff filed a putative class action in the U.S. District Court for the Northern District of Illinois, alleging the receipt of unsolicited faxes in violation of the TCPA. The plaintiff purported to bring claims on behalf of everyone in the country who had received similar faxes during the last four years. The district court granted the defendant’s motion to strike the class, relying on the Supreme Court’s opinion in Bristol-Myers Squibb Co. v. Superior Court of California, San Francisco Cty., 137 S. Ct. 1773 (2017). As WBK previously reported, the Supreme Court in Bristol-Myers held that non-Californians could not bring mass tort claims in California for their injuries in other states, because allowing such claims would violate the Fourteenth Amendment’s Due Process Clause.
However, the Seventh Circuit found that there are fundamental differences between the mass tort action at issue in Bristol-Myers and a class action. It noted that the mass tort action at issue in that case is a California procedural device, with no federal analogue, that allows coordination of separately-filed civil actions that have common questions of fact or law. The Seventh Circuit reasoned that Bristol-Myers therefore only applied basic rules of civil procedure to find that California courts did not have personal jurisdiction over claims by plaintiffs who were not California residents and were not injured in California.
On the other hand, the Seventh Circuit noted that before Bristol-Myers, courts routinely entertained nationwide class actions in federal court without regard to due process concerns about personal jurisdiction, except as it related to the named plaintiffs. The Seventh Circuit noted that class actions are different from mass tort actions because putative class members are absentee litigants who are not full parties for all purposes of the litigation. For instance, absent class members are not considered for diversity jurisdiction purposes or to decide proper venue.
In addition, the Seventh Circuit rejected the defendant’s argument that allowing out-of-state unnamed class members to proceed would violate the service of process requirements of the Federal Rules of Civil Procedure. The Seventh Circuit observed that the service of process rule does not specify upon whom process must be served. The Seventh Circuit also noted that the Federal Rules of Civil Procedure allow different types of representatives to sue in their own names, such as executors, administrators, guardians, and trustees. If any of those types of representatives were a defendant, personal jurisdiction would be assessed with respect to the representative and not the person being represented. Similarly, a class action can proceed if the court has personal jurisdiction over the claims of the representative of the class. The Seventh Circuit therefore found that only named plaintiffs who are class representatives are required to demonstrate personal jurisdiction, not unnamed putative class members. It reversed the judgment of the district court and remanded the case for further proceedings.