Trend Continues With Courts Striking Out-of-State Class Members

TCPA Connect

A recent decision from the U.S. Supreme Court continues to work in favor of Telephone Consumer Protection Act (TCPA) defendants, with an Illinois federal court judge striking the plaintiff’s class definition with regard to members outside the state.

Two faxes were sent to the office of Florence Mussat, M.D., an Illinois corporation, by IQVIA, Inc., a Delaware corporation with its principal place of business in Pennsylvania. The medical office alleged that IQVIA violated the TCPA by sending junk faxes to recipients across the country and sought to represent the putative class without geographic restriction.

U.S. District Judge Virginia M. Kendall of the Northern District of Illinois certified the class. But after another Illinois federal court applied Bristol-Myers Squibb Co. v. Superior Court of California to a TCPA action, IQVIA moved to strike Mussat’s class definition.

In Bristol-Myers Squibb, a group of plaintiffs brought product liability actions against the company in California state court, claiming that a prescription drug damaged their health. After the California Supreme Court found it had specific jurisdiction to hear the cases, the Supreme Court reversed last June, holding that the defendant has the burden of proof as to whether a court has personal jurisdiction.

The due process clause, “acting as an instrument of interstate federalism, may sometimes act to divest the State of its power to render a valid judgment,” Justice Samuel Alito wrote for the majority. Noting that the plaintiffs were nonresidents and did not claim that they suffered harm in California—and that all conduct giving rise to the nonresident claims occurred elsewhere—the justices held that the court lacked jurisdiction over the case.

IQVIA argued that the Illinois court lacked personal jurisdiction over it with respect to the unnamed putative class members who were not Illinois residents.

Judge Kendall agreed, granting the motion to strike the non-Illinois class members.

“The focus of the personal jurisdiction inquiry … is the defendant’s relationship to the forum state, and because Mussat’s lawsuit does not arise out of or relate to IQVIA’s contacts with this forum, the Court grants its motion to strike Mussat’s class definition,” the court wrote.

Mussat argued that IQVIA forfeited its personal jurisdiction defense by not raising it sooner, in its initial motion to dismiss. But the court had little troubling finding that the defense was not available when the defendant filed its motion in March 2018.

On its face, Bristol-Myers Squibb did not apply to class actions, and no court had applied the opinion’s holding or reasoning to a TCPA class action until two days before IQVIA filed its motion to dismiss. When that decision was issued, IQVIA timely amended its responsive pleading just nine days later.

Even if IQVIA did forfeit its defense, Judge Kendall said she would exercise her discretion to excuse it, noting that other courts that have considered the issue in this context have excused the forfeiture.

Moving to the merits of the personal jurisdiction defense, “this Court joins the litany of other courts in this District and elsewhere to hold that the Due Process Clause of the Fourteenth Amendment precludes the exercise of personal jurisdiction over a defendant in a putative class action where nonresident, absent members seek to aggregate their claims with an in-forum resident, even though the defendant allegedly injured the nonresidents outside the forum,” the court wrote.

The TCPA does not authorize nationwide service of process, leaving the court to look to Illinois law and the Due Process Clause for the applicable limits on its exercise of personal jurisdiction. As IQVIA is a Delaware corporation with its principal place of business in Pennsylvania, the court found it lacked general jurisdiction over the defendant.

While the court had specific jurisdiction with regard to IQVIA based on Mussat’s allegations that it received two junk faxes in Illinois, Bristol-Myers Squibb holds that due process requires the defendant be subject to specific jurisdiction also as to the absent class members’ claims.

“Indeed, ‘the mere fact’ that Mussat received two faxes in Illinois ‘does not allow’ for an exercise of ‘specific jurisdiction over the nonresidents’ claims’ with respect to faxes received outside of Illinois because those absent class members’ claims do not relate to IQVIA’s contacts with Illinois,” the court wrote. “It follows, then, that exercising specific jurisdiction over IQVIA with respect to the nonresidents’ claims would violate IQVIA’s due process rights. Therefore, the Court must strike the class definition to the extent it asserts claims of nonresidents.”

Following the Supreme Court’s lead in Bristol-Myers Squibb and applying its core reasoning, Judge Kendall held that due process required a connection between the forum and the specific claims at issue. “This recognition bars nationwide class actions in fora where the defendant is not subject to general jurisdiction,” the court said. “Whether it be an individual, mass, or class action, the defendant’s rights should remain constant.”

To read the opinion and order in Florence Mussat, M.D. v. IQVIA, Inc., click here.

Why it matters: The Supreme Court’s decision in Bristol-Myers Squibb has been beneficial for class action defendants in all types of cases, including TCPA actions, with federal courts in Illinois leading the way by applying the justices’ ruling to cases filed under the statute. However, the case law in this area is far from uniform, and many of the defendant-favorable decisions have come out of the Northern District of Illinois.