Olivia Clayton | Revisiting Bristol-Myers Squibb’s Applicability in Collective Lawsuits

Background

In 2017, the Supreme Court in Bristol-Myers Squibb Co. v. Superior Court of California addressed the issue of specific jurisdiction in class action lawsuits. 582 U.S. 255 (2017). The case involved over 600 plaintiffs, including residents and nonresidents of California, who joined a lawsuit alleging product defects in a medication manufactured by Bristol-Myers Squibb (BMS). In response, BMS filed a motion to dismiss the nonresident plaintiffs’ claims for lack of personal jurisdiction. The Court agreed, holding that because the claims would remain the same with the exclusion of the nonresident plaintiffs, there was no basis for asserting specific jurisdiction over them. This decision reinforced the standard established in International Shoe Co. v. Washington that a defendant must have sufficient minimum contacts with the forum state for the court to assert personal jurisdiction. 326 U.S. 310 (1945). Unlike class action lawsuits, collective actions require plaintiffs to “opt in” to join the suit. A notable example is Vanegas v. Signet Builders Inc., a 2022 case from the U.S. Court of Appeals for the Seventh Circuit, where a group of construction workers sought payment for overtime they alleged was owed. 46 F.4th 636 (7th Cir. 2022). The named plaintiff, Jose Luna Vanegas, claimed to represent over 600 employees of the defendant who had opted into the lawsuit; however, only 30 of them were Wisconsin residents. The U.S. District Court for the Western District of Wisconsin ruled in favor of the plaintiffs; however, the defendant appealed, arguing that the court lacked personal jurisdiction over the hundreds of out-of-state plaintiffs. On appeal, the Seventh Circuit reversed, holding that in collective actions, personal jurisdiction must be assessed individually for each plaintiff.

Issue

Does the Bristol-Myers Squibb decision, which requires each plaintiff in a class action to be either from the forum state or have sufficient contacts with it to establish personal jurisdiction, also apply to collective lawsuits?

The Split

Following the Bristol-Myers decision, several circuits have addressed whether out-of-state plaintiffs should be treated equally in class and collective action lawsuits. The Seventh Circuit’s decision in Vanegas joins the Third, Sixth, and Eighth Circuits, which have agreed that the Bristol-Myers standard also applies to collective suits. This requires each plaintiff to either be a resident of or have sufficient contacts with the forum state where the case is bought. Only the First Circuit disagrees, holding that under the Federal Rules of Civil Procedure Rule 4, only the named plaintiff needs to establish personal jurisdiction.

The Third, Sixth, Seventh, and Eighth Circuits

In Vallone v. CJS Solutions Group, the Eighth Circuit concluded that even in collective actions, personal jurisdiction “must be determined on a claim-by-claim basis.” 9 F.4th 861, 865 n.3. (8th Cir. 2022). The court relied on the Bristol-Myers' decision, holding that “unconnected activities” are not sufficient to establish personal jurisdiction, even in collective suits, and dismissed the claims of out-of-state plaintiffs. Id.

The Sixth Circuit echoed this reasoning in Canaday v. Anthem Cos., 9 F.4th 392 (6th Cir. 2022). The court explained that each plaintiff, by “opting in” becomes their own party with a distinct interest and, therefore, must “meet [their own] burden for obtaining relief.” Id. at 397 n.8. While the court acknowledged that, like Bristol-Myers, this holding may make it more difficult to bring collective actions against national companies, it suggested that future lawsuits should be brought in the state of incorporation or headquarters of the company being sued. Id.

In Fischer v. Federal Express Corp., the Third Circuit similarly held that “like the out-of-state plaintiffs in Bristol-Myers," opt-in plaintiffs “must satisfy the personal jurisdiction requirements” on an individual basis. 42 F.4th 366, 387 n.2. (3d Cir. 2022). The Court acknowledges the concerns raised in Justice Sotomayor’s dissent in Bristol-Meyers that this decision could “retain the ability to bring nationwide collective actions in a court”; however, it ultimately agreed that the burden on the defendant is too high to justify an extension of personal jurisdiction. Id. at 388 n.2.

The First Circuit

So far, the only outlier to this interpretation is the First Circuit. The 2024 case Waters v Day & Zimmermann NPS, Inc., 23 F.4th 84 (1st Cir. 2024), cites Brystol-Myers, Vallone, and Canaday in its decision; however, it reaches a different conclusion. It notes that “collective actions are distinct from FRCP 23 class actions” due to the “opt-in” factor. Id. at 91 n.1. The court explains that the Fifth Amendment allows an “out-of-state plaintiff [to sue] to enforce their rights under a federal statute in federal court if the defendant maintained the “requisite ‘minimum contacts’ with the United States,” thus permitting personal jurisdiction, provided that the named plaintiff establishes it. Id. at 92 n.2. To justify this, the court refers to the Federal Rules of Civil Procedure, Rule 4, which only requires the named plaintiff to serve the summons, making them the only party subject to personal jurisdiction.

Looking Forward

With the rise in class and collective lawsuits in recent years, Courts have increasingly grappled with the question of personal jurisdiction involving multiple plaintiffs. With this, Justice Sotomayor’s dissent has returned to the spotlight, questioning how national companies can be held accountable for their activities across many states. So far, only five federal circuits have attempted to address this issue. However, it should not come as a surprise if the U.S. Supreme Court decides to take up a case and provide a definitive ruling in the coming years, making this an issue to keep an eye on.