By Gerald L. Maatman, Jr. and Michael L. DeMarino

Seyfarth Synopsis:  The battle continues over the applicability of the U.S. Supreme Court’s decision in Bristol-Myers Squibb v. Superior Court, 137 S.Ct. 1773 (2017), to Rule 23 class actions. Last month, in Mussat v. IQVIA, Inc., 953 F.3d 441, 448 (7th Cir. 2020), the Seventh Circuit refused to apply the reasoning in Bristol-Myers Squibb to class actions, calling that push a “major change in the law of personal jurisdiction and class actions.” Now, on the heels of that decision, the Defendant IQVIA, Inc. has sought rehearing en banc.  IQVIA argues that the question of whether personal jurisdiction protections apply to class actions is critically important, and the panel’s decision “undermines the basic federalism principals underlying longstanding personal-jurisdiction requirements.” Mussat v. IQVIA, Inc., Case No. 19-1204, at 18 (7th Cir. Apr. 8, 2020).

This issue is critical to employers facing class actions because it impacts where an employer may be forced to defend a nationwide class action. District courts remain deeply divided on the impact of Bristol-Myers Squibb on class actions, IQVIA’s petition for rehearing raises complex and fundamental questions about class actions and due process. This case and, more broadly, the issue of the applicability of the Supreme Court’s ruling to class actions should be on every employer’s radar.

IQVIA’s Petition For Rehearing En Banc

IQVIA asks the Seventh Circuit to revisit the panel’s decision that the principles announced in Bristol-Myers Squibb do not apply to the case of a nationwide class action filed in federal court under a federal statute.

In Bristol-Myers Squibb, the Supreme Court ruled that plaintiffs who lived outside of California could not sue Bristol-Myers Squibb in a mass personal injury case in California state court because California does not have specific jurisdiction to hear claims by nonresidents. See Bristol-Myers Squibb Co. v. Superior Court, 137 S. Ct. 1773, 1782 (2017).

IQVIA criticizes the panel’s attempt to draw a distinction between its case and Bristol-Myers Squibb. At the core of the panel’s decision was its conclusion that, unlike in a mass tort action, “absent class members are not full parties to the case” for purposes of personal jurisdiction. Mussat, 953 F.3d at 447.  IQVIA argues that the party status of absent class members is irrelevant to the personal jurisdiction inquiry. 

IQVIA also challenges the panel’s assertion that there was no pre-Bristol-Myers Squibb general consensus that due process principles did not prohibit a plaintiff from seeking to represent a nationwide class in federal court. According to IQVIA, simply because challenges to class actions on personal jurisdiction grounds were not raised before Bristol-Myers Squibb does not mean those challenges lack merit.

IQVIA also takes issue with the panel’s conclusion that Federal Rule of Civil Procedure 4(k) only requires that a plaintiff comply with state-based rules on the service of process, but does not establish an independent limitation on a federal court’s exercise of personal jurisdiction.  Rather, IQVIA asserts that allowing non-Illinois unnamed class members to proceed in the case is consistent with Rule 4(k), which allows personal jurisdiction only when the defendant is subject to a court of general jurisdiction in the state where the district court is located. Because Illinois law would not authorize some the absent class members to sue IQVIA in Illinois, IQVIA posits that Rule 4(k) prohibits a federal district court in Illinois from exercising jurisdiction.  

Implication For Employers

This case has important consequences for employers with national operations. If the panel’s decision remains undisturbed, plaintiffs filing nationwide class actions will be encouraged to forum shop. Nevertheless, as courts across the country are divided on this issue, employers facing nationwide class actions where they are not subject to general jurisdiction should strongly consider challenging personal jurisdiction over the non-resident class members under the rationale of Bristol-Myers Squibb. The filing of the petition for rehearing en banc is a strong signal that future petitions for certiorari on this issue are apt to end up before the U.S. Supreme Court in 2020.