We recently discussed Circuit Court rulings allowing nationwide class actions where the named plaintiffs could satisfy specific personal jurisdiction. Since then, the Fifth Circuit has held that a defendant did not waive its personal jurisdiction defense to plaintiffs’ nationwide class allegations by raising the defense for the first time in opposition to class certification. See Cruson v. Jackson Nat’l Life Ins. Co., ___ F.3d. ___, 2020 WL 1443531 (5th Cir. Mar. 25, 2020). The Court did not go on to reach the merits of the defense, instead finding that plaintiffs failed to make an adequate predominance showing under Rule 23(b)(3). This new ruling deepens the split over when a defendant should raise its personal jurisdiction defense to putative class actions based on specific personal jurisdiction. Here, we explore strategic considerations on timing a personal jurisdiction challenge in the class action context.
In Cruson, the defendant did not raise the lack of personal jurisdiction over nonresident putative class members in its Rule 12 motions, but did so in its answer. In response to the plaintiffs’ class certification motion, “Jackson again raised lack of personal jurisdiction, arguing that specific jurisdiction over Jackson as to claims by non-Texas residents was foreclosed by the Supreme Court’s recent decision in Bristol-Myers Squibb Co. v. Superior Court of California.” The district court ruled that “Jackson had waived any personal jurisdiction defense by failing to raise it in its Rule 12 motions and, alternatively, by litigating on the merits of plaintiffs’ claims.” The Fifth Circuit reversed the waiver ruling because the nonresident putative class members “were not yet before the court when Jackson filed its Rule 12 motions. . . . Thus, at that time, a personal jurisdiction objection respecting merely putative class members was not ‘available,’ as Rule 12(g)(2) requires for waiver.”
Given that the Seventh Circuit reached the merits of a personal jurisdiction challenge on a motion to strike at the pleading stage, what’s a defendant to do if they cannot file a Rule 12(b)(2) motion to dismiss for lack of personal jurisdiction?
One strategic consideration: the filing of a motion to strike class allegations as to nonresident putative class members at the pleading stage. Cowen v. Lenny & Larry’s, Inc., No. 17 CV 1530, 2017 WL 4572201, at *3–5 (N.D. Ill. Oct. 12, 2017) (“Courts may strike class allegations at the pleading stage when they are facially and inherently deficient,” particularly when the dispute is not factual and discovery is unnecessary to resolve it.” (quoting Cholly v. Uptain Group, Inc., 2015 WL 9315557, at *3 (N.D. Ill. Dec. 22, 2015)); Wright v. Family Dollar, Inc., 2010 WL 4962838, *1 (N.D. Ill. Nov. 30, 2010) (considering defendant’s motion to strike class allegations and noting that the “early practicable time” directive indicates that “courts may-and should-address the plaintiff’s class allegations when the pleadings are facially defective and definitively establish that a class action cannot be maintained.”).
A Rule 12(b) motion seeks dismissal of specific “claim[s] for relief” in the complaint. Fed. R. Civ. P. 12(b). Because the claims of nonresident putative class members are not before the court, a precertification Rule 12 motion is premature. A motion to strike, on the other hand, enforces Rule 23’s requirements by only allowing a class to go forward with discovery if it ultimately could be certified. See, e.g., Wright v. Family Dollar, Inc., 2010 WL 4962838, *1. Defendants can couch this motion in a manner as to not per se seek dismissal based on specific Rule 12(b)(2) personal jurisdiction grounds, but still seek to limit the definition of the class to those members that ultimately may be able to satisfy personal jurisdiction. Such narrowing of the class would greatly lower the burden of discovery on the defendant and can find support in analogous case law. See id.; see also In re Wellbutrin XL Antitrust Litig., 260 F.R.D. 143, 155 (E.D. Pa. 2009) (denying plaintiffs discovery when facing analogous issue of lack of standing).
Indeed, “[e]fficiency and economy are strong reasons for a court to resolve challenges to personal or subject-matter jurisdiction before ruling on certification.” Manual on Complex Litigation § 21.13. Defending a class action with potential class members that never will satisfy personal jurisdiction imposes unreasonable burden on defendants. Countless hours of discovery and judicial resources could be squandered for no real reason because no amount of discovery will change the jurisdictional realities of nonresident putative class members.
To be sure, motions to strike class allegations have traditionally met with little success. But that appears to be slowly changing. More courts appear to be recognizing that motions to strike are useful tools to narrow or even dismiss defective class allegations early in the case. See, e.g., Flint v. Ally Financial, Inc., No. 3:19-cv-00189-FDW-DCK, 2020 WL 1492701 (W.D. N.C. March 27, 2020) (granting motion to strike class allegations). In fact, just last month, a federal district court granted a motion to strike claims related to a nationwide class action. Carpenter v. PetSmart, Inc., No. 19-cv-1731-CAB-LL, 2020 WL 996947 (S.D. Cal. March 2, 2020). Other federal district courts have done so as well. See, e.g., Garvey v. Am. Bankers Ins. Co. of Florida, No. 17-CV-986, 2019 WL 2076288 (N.D. Ill. May 10, 2019) (granting motion to strike nationwide class allegations).
One nuance to consider when filing a motion to strike class allegations – which federal rule to file under. Some courts evaluate motions to strike under Rules 23(c)(1)(A) and (d)(1)(D), while others do so under Rule 12(f). Cf. Buonomo v. Optimum Outcomes, Inc., 301 F.R.D. 292, 295 (N.D. Ill. 2014) (“Courts in this District . . . evaluate motions to strike class allegations under Rule 23, not Rule 12(f).”); (Gill v. Nova Biomedical Corporation, 298 F.R.D. 693, 700 (S.D. Fla. 2014) (holding that it is more appropriate “to view the Rule 23 factors through the lens of the Rule 12(f) standard for motions to strike.”). If one files under Rule 12(f), be cognizant of Rule 12(g)(2), which states that “a party that makes a motion under [Rule 12] must not make another motion under this rule raising a defense or objection that was available to the party but omitted from its earlier motion.” In other words, if a defendant files a motion to dismiss for failure to state a claim, and then immediately files a motion to strike under Rule 12(f), courts may deem the latter as waived pursuant to Rule 12(g)(2). Instead, simply combine the motion to strike under Rule 12(f) with the motion to dismiss arguments under Rule 12 into one pleading.
Thus, as the law around this issue develops, defendants should consider whether they can reduce the burden of unnecessary discovery by moving to strike putative nonresident class members from the class definition at the pleading stage—using personal jurisdiction arguments—rather than the pro forma motion to dismiss for lack of personal jurisdiction.