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The federal courts have been grappling recently with a thorny question of major significance to the class action bar: Can courts exercise personal jurisdiction over claims brought by unnamed, out-of-state class members? The answer impacts access to justice as well as the costs of litigation.

In 2017, the U.S. Supreme Court decided Bristol-Myers Squibb Co. v. Superior Court, which involved a California “mass tort” action against an out-of-state defendant. The court held that the state court could not exercise jurisdiction over claims brought by out-of-state plaintiffs for injuries that occurred out of state. Justice Sonia Sotomayor dissented, warning that “[t]he majority’s rule will make it difficult to aggregate the claims of plaintiffs across the country whose claims may be worth little alone,” and that the decision “will result in piecemeal litigation and the bifurcation of claims.” Class actions are designed to alleviate such problems, and the court limited its holding to state “mass actions,” reserving the question of whether its ruling would apply to federal class actions as well. Since then, lower courts have been filling in the blanks.

The courts have not been unanimous. In decisions issued over the last three years, federal judges in districts across the country, including in Colorado, Washington, Maryland and Florida, have all declined to extend Bristol-Myers to class actions, exercising jurisdiction in cases involving out-of-state plaintiffs alleging out-of-state injuries. Those rulings emphasized the court’s narrow holding, observed that absent class members are not formally parties to the lawsuit, and contended that Federal Rule of Civil Procedure accords defendants adequate due process protections. Meanwhile, many cases out of the Northern District of Illinois extended Bristol-Myers to federal class actions, reasoning that the court’s logic compels that result. A 2017 order from the District of Arizona also stated that Bristol-Myers applies to class actions, albeit in a terse footnote with no analysis. The split has trickled into other areas of complex litigation as well. Some courts have had to confront whether Bristol-Myers applies to the “collective action” procedure under the Fair Labor Standards Act. (The Southern District of Texas said no in 2018; the Eastern District of Missouri said yes in 2020.)

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