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Ltd. v. Promologics, Inc.

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

July 19, 2018




         Defendant Promologics moves to strike the class allegations asserted by Plaintiffs America's Health & Resource Center, Ltd. and Affiliated Health Group, Ltd., and to bifurcate discovery. (Dkts. 75, 78.) Defendant Janssen has joined in those Motions. (Dkts. 87, 89.) For the reasons stated herein, the Court grants in part and denies in part the Motion to Strike the class allegations and grants the Motion to Bifurcate.

         I. BACKGROUND

         The Court has previously summarized the facts of this case in an earlier ruling. See, Am.'s Health & Res. Ctr., Ltd. v. Promologics, Inc., No. 16 CV 9281, 2017 WL 5001284, at *1 (N.D. Ill. Nov. 2, 2017). All that is relevant for now is that Plaintiffs allege Defendants sent them, and each member of their proposed class, a fax in violation of the Telephone Consumer Protection Act, 47 U.S.C. § 227. (Am. Compl. ¶¶ 1-10, Dkt. 21.) Defendants contend that this class action is incurably defective, however, and so they move to strike those allegations. Beyond that, Defendants take issue with what they see as a shortage of proof to back up the viability of the named Plaintiffs' individual claims. Defendants accordingly move to bifurcate discovery so they and the Court can first ascertain whether the named Plaintiffs have individual claims before contending, if still necessary, with the proposed class allegations.

         II. ANALYSIS

         A. Motion to Strike Class Allegations

         According to Defendants, the Court should strike the class allegations in part or in whole for three reasons: (1) Under the Supreme Court's decision in Bristol-Myers Squibb Co. v. Superior Court of California, 137 S.Ct. 1773, 1783-84 (2017), this Court lacks personal jurisdiction over the Defendants as to the claims of the non-Illinois-resident class members; (2) due to an imprecise class definition, the named Plaintiffs' claims are not typical of the claims of the other class members; and (3) individualized issues of consent predominate over common questions of law or fact, so the class fails to clear Federal Rule of Civil Procedure 23(b)(3), as required here. The Court finds only the first of these arguments convincing.

         1. Personal Jurisdiction under Bristol-Myers Squibb

         Personal jurisdiction may be “general” or “specific.” General jurisdiction lies only where the defendant has “continuous and systematic” contacts with the forum state. See, Helicopteros Nacionales de Colombia, S.A. v. Hall, 466 U.S. 408, 415-16 (1984). In all but the most exceptional cases, general jurisdiction over a corporation is limited to its place of incorporation and/or principal place of business. Leibovitch v. Islamic Republic of Iran, 188 F.Supp.3d 734, 746 (N.D. Ill. 2016) (citing Daimler AG v. Bauman, 134 S.Ct. 746, 761 n.19 (2014)), aff'd, 852 F.3d 687 (7th Cir. 2017). In contrast, “[s]pecific personal jurisdiction is appropriate where (1) the defendant has purposefully directed his activities at the forum state or purposefully availed himself of the privilege of conducting business in that state, and (2) the alleged injury arises out of the defendant's forum-related activities.” Tamburo v. Dworkin, 601 F.3d 693, 702 (7th Cir. 2010) (citing Burger King Corp. v. Rudzewicz, 471 U.S. 462, 472 (1985)). In either case, the plaintiff must also demonstrate that the exercise of jurisdiction comports with traditional notions of fair play and substantial justice. Int'l Shoe Co. v. Washington, 326 U.S. 310, 320 (1945).

         Despite contending in their Complaint that Defendant Janssen is subject to this Court's general jurisdiction (Am. Compl. ¶ 18, Dkt. 21), Plaintiffs make no general jurisdiction arguments in their present briefing as to either Defendant, both of which are incorporated and maintain their principal places of business outside of Illinois. See, Daimler, 134 S.Ct. at 761 n.19. As such, the remaining jurisdictional inquiry is specific. Here, that inquiry depends on the Supreme Court's ruling in Bristol-Myers Squibb. 137 S.Ct. at 1783-84. That case began as a mass tort action in California state court involving hundreds of individual plaintiffs, most of whom were not California residents. Id. at 1777. On review, the Supreme Court considered the compatibility of the state court's exercise of jurisdiction with the Fourteenth Amendment's due process clause and concluded that the state court lacked specific jurisdiction over the defendant as to the claims of the nonresident plaintiffs. Id. at 1779, 1783-84. In so holding, the Court clearly limited its ruling to state court jurisdiction, thus “leav[ing] open the question whether the Fifth Amendment imposes the same restrictions on the exercise of personal jurisdiction by a federal court.” Id. at 1784 (citation omitted). That limitation is no barrier to the rule's application here, however, where this Court sits in diversity jurisdiction and accordingly looks to Illinois state law. See, LDGP, LLC v. Cynosure, Inc., No. 15 CV 50148, 2018 WL 439122, at *2 (N.D. Ill. Jan. 16, 2018) (applying Bristol-Myers Squibb holding in case of diversity jurisdiction); McDonnell v. Nature's Way Prods., LLC, No. 16 CV 5011, 2017 WL 4864910, at *4 n.7 (N.D. Ill. Oct. 26, 2017) (same).

         But that is not the only possible barrier to Bristol-Myers Squibb's application to this case. What remains is whether that case applies with equal force to class actions as to mass torts and, if so, whether the Defendants' personal-jurisdiction objection predicated on that case is either timely or, if untimely, excusable. The precise membership of the proposed class is still unclear, but the allegations suggest that the proposed nationwide class contains members who neither reside, nor were harmed in, Illinois. It is this group of plaintiffs whose claims Defendants seek to shear from the case, and if the Court answers the questions presented above in the affirmative, Defendants' efforts will prevail.

         As for the first question: Bristol-Myers Squibb left open whether its jurisdictional rule applies in the class action context. See 137 S.Ct. at 1789 n.4 (Sotomayor, J., dissenting) (“The Court today does not confront the question whether its opinion here would also apply to a class action in which a plaintiff injured in the forum State seeks to represent a nationwide class of plaintiffs, not all of whom were injured there.”). District court rulings have begun to fill that vacuum, though with contradictory results. Compare Casso's Wellness Store & Gym, LLC v. Spectrum Lab. Prods., Inc., No. 17 CV 2161, 2018 WL 1377608 (E.D. La. Mar. 19, 2018); In re Morning Song Bird Food Litig., No. 12 CV 01592, 2018 WL 1382746, at *5 (S.D. Cal. Mar. 19, 2018); Sanchez v. Launch Tech. Workforce Sols., LLC, 297 F.Supp.3d 1360, 1365-66 (N.D.Ga. 2018); In re Chinese-Manufactured Drywall Prod. Liab. Litig., No. MDL 09-2047, 2017 WL 5971622, at *12 (E.D. La. Nov. 30, 2017) (cases finding Bristol-Myers Squibb inapplicable to class actions), with Maclin v. Reliable Reports of Tex., Inc., No. 17 CV 2612, 2018 WL 1468821, at *4 (N.D. Ohio Mar. 26, 2018); Wenokur v. AXA Equitable Life Ins. Co., No. 17 CV 00165, 2017 WL 4357916, at *4 n.4 (D. Ariz. Oct. 2, 2017); In re Dental Supplies Antitrust Litig., No. 16 CV 696, 2017 WL 4217115, at *9 (E.D.N.Y. Sept. 20, 2017) (finding the opposite). This Court has also weighed in and agreed with those courts finding Bristol-Myers Squibb applicable to class actions. See, DeBernadis v. NBTY, Inc., No. 17 CV 6125, 2018 WL 461228, at *2 (N.D. Ill. Jan. 18, 2018). That ruling comports with the position taken by the other courts in this District which have answered this question. See, McDonnell, 2017 WL 4864910, at *4; Greene v. Mizuho Bank, Ltd., 289 F.Supp.3d 870, 874 (N.D. Ill. 2017).

         Those decisions finding Bristol-Myers Squibb applicable to class actions have generally observed that due process requirements do not differ between class and non-class actions. In either event, as the Supreme Court articulated, due process requires “a connection between the forum and the specific claims at issue.” Bristol-Myers Squibb, 137 S.Ct. at 1781; see, Greene, 289 F.Supp.3d at 874 (stating same); Maclin, 2018 WL 1468821, at *4 (remarking that the respective due process protections of the Fifth and Fourteenth Amendments engender the same effects as far as personal jurisdiction are concerned); In re Dental Supplies Antitrust Litig., 2017 WL 4217115, at *9 (“The constitutional requirements of due process do[] not wax and wane when the complaint is individual or on behalf of a class.”). This Court agrees with that observation and now endorses it once again, reflecting this Court's belief that Bristol-Myers Squibb applies in equal measure to class actions.

         But answering this first question in the affirmative does not yet give Defendants a victory in their quest to cut down the proposed class. There is also the question of timeliness. Plaintiffs contend that even if this Court believes Bristol-Myers Squibb applies with equal force to class actions, Defendants' Motion still fails because, by challenging this Court's personal jurisdiction, Defendants' filing is nothing more than a 12(b)(2) motion in disguise. And as such, it is susceptible to ...

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