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DeBernardis v. NBTY, Inc.

United States District Court, N.D. Illinois, Eastern Division

January 18, 2018

JOSHUA DeBERNARDIS, individually and on behalf of all others similarly situated, Plaintiff,


          Harry D. Leinenweber, Judge United States District Court.

         A. BACKGROUND

         The Plaintiff, Joshua DeBernardis (“JB”), is attempting to bring a nationwide class action seeking monetary damages and injunctive relief against the distributor of a dietary supplement. The four-count Complaint alleges that Defendants made false and misleading claims concerning the beneficial effects of the product. Count I alleges violations of state consumer fraud acts on behalf of a multi-state class; Count II alleges violation of the Illinois Consumer Fraud Act on behalf of Illinois purchasers; Count III alleges violations of Express Warranty on behalf of the nation-wide class, and Count IV alleges unjust enrichment on behalf of the nation-wide class.

         Defendants make four challenges against Plaintiff's Complaint: (1) most important, Defendants claim that this Court does not have jurisdiction to hear the case involving nonresident class of plaintiffs based on the recent Supreme Court case Bristol-Myers Squibb Co. v. Superior Court of California, 137 S.Ct. 1773 (June 19, 2017) (This involves Counts I, III and IV); (2) Plaintiff lacks Article III standing to claim injunctive relief (Count III); (3) Plaintiff failed to allege that he gave pre-suit notice to Defendants of his breach of warranty claim; and (4) his claim for unjust enrichment fails for the national class for the same reason as his nationwide consumer fraud claim as alleged in Count I fails.


         A. Out-of-State Plaintiffs

         The main issue to be decided in this Motion is the applicability of Bristol-Myers to this putative nationwide class action. In that case, a group of plaintiffs, most of whom were not California residents, brought product liability actions against Bristol-Myers Squibb in California state court. The complaints alleged that Plavix, a prescription drug manufactured by Bristol-Myers, damaged their health. Bristol-Myers is a large company incorporated in Delaware and headquartered in New York. It also engages in business activity in other jurisdictions including California. Among other activities, Bristol-Myers sells Plavix in California.

         The plaintiffs, consisting of 86 California residents and 592 residents from 33 other states, filed 8 separate complaints in California Superior Court. There was no claim that the nonresident plaintiffs obtained Plavix through California physicians or any other California source; nor did they claim that they were injured by Plavix in California or were treated for their injuries in California. Asserting lack of jurisdiction, Bristol-Myers moved to quash service on the nonresidents' claims. The case moved through the California state system and concluded with the California Supreme Court holding that while the California courts lacked general jurisdiction over the non-resident cases, nevertheless the courts had specific jurisdiction over Bristol-Myers to hear the cases. The court adopted a “sliding scale” approach to finding specific jurisdiction, holding that the strength of the connection between the forum and the specific claims at issue is relaxed where a defendant has extensive forum contacts, even though those contacts are unrelated to the specific claims at issue.

         The United States Supreme Court, in reversing, pointed out that a court must consider a variety of interests in determining whether personal jurisdiction is present, including those of the forum state, the defendant, and the plaintiff. However the primary concern is the burden on the defendant. In addition to the practical problems of litigating in the out-of-state forum, the court must consider “the more abstract matter of submitting to the coercive power of a State that may have little legitimate interest in the claims in question, ” i.e., a consequence of territorial limitations on the power of the respective States. The Court went on to find that 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.” The court then noted that the plaintiffs were non-residents and did not claim that they suffered harm in California and all conduct giving rise to the non-resident claims occurred elsewhere. Finally, the court noted that the California and out-of-state plaintiffs were free to join together in a state that had general jurisdiction over the defendant or the out-of-state plaintiffs could join together in their home states to sue Bristol-Myers.

         The Plaintiff, in response to the Defendants' citation of Bristol-Myers Squibb, points out that there is a major distinction between that case and the instant case. Bristol-Myers involved mass tort actions and not putative class actions, a point raised by Justice Sonia Sotomayor in her dissent. Plaintiff cites to a Northern District of California case, Fitzhenry-Russell v. Dr. Pepper Snapple Group, Inc., 2017 WL 4224723 (Sept. 22, 2017) and an Eastern District of Louisiana case, In re Chinese-Manufactured DryWall Products, 2017 WL 5971622, both of which refused to apply Bristol-Myers to nationwide class action cases.

         The Defendants, however, cite a case from this District, McDonnell v. Nature's way Products, LLC, 2017 WL 4864910 (N.D. Ill. October 26. 2017) which applied Bristol-Myers Squibb to a remarkably similar case to the one at bar. This case involved a putative nationwide class action brought by the purchasers of a vitamin supplement that was manufactured outside of the United States contrary to the label which stated that the product was manufactured in the United States. The claim was that this false advertising violated the Illinois Consumer Fraud and Deceptive Practices Act as well as the consumer fraud statutes of seven other states. Relying on Bristol-Myers Squibb the court dismissed the claims of the non-resident class.

         The Court finds that the applicability of Bristol-Myers Squibb to this case is a close question. The Court understands the argument that there is a distinction between a mass tort action that was present in Bristol-Myers Squibb and a nationwide class action that is present here. As noted in the Chinese Dry Wall case to qualify as a class action the plaintiff must meet the requirements of Rule 23, numerosity, typicality, adequacy of representation, predominance and superiority. Mass. torts on the other hand will be hard pressed to establish typicality and predominance due to the almost certain differences in damages.

         The Court believes that it is more likely than not based on the Supreme Court's comments about federalism that the courts will apply Bristol-Myers Squibb to outlaw nationwide class actions in a form, such as in this case, where there is no general jurisdiction over the Defendants. There is also the issue of forum shopping, which was mentioned in the Chinese DryWall case as a basis for distinguishing mass torts from class actions, but possible forum shopping is just as present in multi-state class actions. Consequently, to the extent that Counts I, III and IV seek to recover on behalf of out-of-state plaintiff classes, the Motion to Dismiss is granted.

         B. Count II - ...

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