Telephone Consumer Protection Act claim defendants and fans of civil procedure have cause to celebrate as another district court limits the scope of potential class members against out-of-state defendants.  

On May 10, the District Court for the Northern District of Illinois struck non-residents of Illinois from a putative class in a TCPA class action against two Florida corporations. The ruling marks another affirmation of the extension of the Supreme Court’s 2018 decision in Bristol Myers Squibb v. Superior Court of California, San Francisco Cty., 137 S. Ct. 1773 (2017), to limit courts’ jurisdiction over out-of-state TCPA defendants. 

The case, Garvey v. American Bankers Ins. Co. of Fl. et al., No. 17-cv-986 (N.D. Ill. May 10, 2019), concerned alleged telemarketing calls using an automated telephone dialing system to individuals without their prior express consent. The plaintiff, an Illinois resident, sought to certify a class on behalf of “[a]ll persons in the United states and its Territories” that had received similar calls. The defendants – two companies incorporated in and with their principal places of business in Florida – moved to strike any putative members of the class that did not live in Illinois. The Court, relying on the Supreme Court’s decision in Bristol Myers, found that it lacked general personal jurisdiction over the companies with respect to claims by non-residents of Illinois.   

The Court’s decision in Bristol Myers, while involving the not-so-simple subject of mass tort litigation, ultimately dealt with the basic concept of personal jurisdiction that underlies the judiciary’s power over citizens and businesses. In a nutshell, courts must have personal jurisdiction – either general or specific – over a person or entity in order to decide a controversy involving that party. General personal jurisdiction exists, for example, where a person resides in or a company is headquartered in the same forum (e.g., state) as the court. If a court lacks general personal jurisdiction, it may still have specific personal jurisdiction over a person or entity if there are sufficient contacts with the forum. The relevant example here is that when an out-of-state entity causes injury in a state, there is specific personal jurisdiction because of that injury. 

In Bristol Myers, a group of mostly non-Californian plaintiffs injured throughout the country brought a products liability action in California state court against a pharmaceutical manufacturer that was not subject to general jurisdiction in California. The defendant challenged the state court’s jurisdiction over it, and the case made its way to the Supreme Court. Sustaining the defendant’s challenge, the Supreme Court held that the “primary focus of our personal jurisdiction inquiry is the defendant’s relationship to the forum State,” and for specific personal jurisdiction, “the suit must arise out of or relate to the defendant’s contacts with the forum.”  

The Court’s decision in Garvey applies the same logic. Indeed, the Court held that to exercise specific jurisdiction, “the injury of the non-Illinois plaintiffs must arise out of or relate to the defendants’ contacts with Illinois.” There was no alleged harm to non-Illinois class members arising from the defendants’ contacts with Illinois, and thus the Court did not have jurisdiction with respect to claims asserted on their behalf. As a result, the non-Illinois residents were struck from the putative class. 

Bristol Myers was not decided in the context of a Rule 23 class action, but TCPA class actions like Garvey have been on the frontlines of extending the Supreme Court’s decision. Favorable decisions like Garvey are important for out-of-state defendants – not just in the TCPA context – because they limit plaintiffs’ ability to forum shop for a favorable venue to bring nationwide class action lawsuits. Instead, under Bristol Myers, plaintiffs are arguably either limited to a state-specific class or required to file suit in the defendant’s home forum. 

Stay tuned to the Consumer Financial Services Law Monitor blog for continued updates on this topic and much more.