“In its seminal 2017 Bristol-Myers decision, the U.S. Supreme Court made clear that a plaintiff may not sue a corporate defendant outside of its ‘home’ State unless his claim arises in the forum State. This case demonstrates that some trial courts have not yet gotten the message. They are authorizing nationwide class actions outside the defendant’s home State.”
—Richard Samp, WLF Chief Counsel
WASHINGTON, DC—Washington Legal Foundation (WLF) late yesterday urged the U.S. Court of Appeals for the D.C. Circuit to rule that a defendant may not be forced to defend a nationwide class action outside of its home State. In a brief filed in Whole Foods Market Group, Inc. v. Molock, WLF argued that although the U.S. Supreme Court’s Bristol-Myers decision cut back on the power of state courts to exercise jurisdiction over out-of-state corporations, the lower courts in this and other cases are attempting an end-run around Bristol-Myers by declaring that it is inapplicable to class actions.
This lawsuit involves five employees of Whole Foods stores in the District of Columbia who contend that they were not paid all of the employee bonuses to which they were entitled. They seek to represent a class consisting of thousands of employees in 26 other States who allegedly were similarly shortchanged. The claims of employees in those other States do not bear any relationship to the District of Columbia, which means that Bristol-Myers prevents them from filing their own suits against Whole Foods in the District. The trial court nonetheless denied Whole Foods’ motion to dismiss the class claims; it ruled that Bristol-Myers does not prevent the nonresident claimants from participating in the class action as absent class plaintiffs. In October 2018, the D.C. Circuit agreed to hear an interlocutory appeal from that ruling.
WLF’s brief argues that the Due Process Clause protects a business from being forced to defend a lawsuit outside of its home jurisdiction unless the claim actually arose within the forum State, and that those constitutional protections are fully applicable in the class-action context. WLF argues that if those protections are deemed inapplicable to class actions whenever at least one plaintiff is from the forum State, then plaintiffs’ lawyers will have unlimited licenses to forum-shop and to file class actions in the courts of their choice.
Ever since the Bristol-Myers decision came down in 2017, its applicability to class actions has been hotly debated. Federal district-court decisions are evenly divided on the issue. This case is the first one to reach a federal appeals court.
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