ST. LOUIS – A landmark U.S. Supreme Court decision limiting the scope of mass tort actions does not apply to class filings yet, a Missouri federal court has ruled.
Plaintiff Swinter Group Inc., which is suing Service of Process Agents Inc., can move forward with national class action certification after a judge noted that no appeals court has yet ruled on the full impact of the Bristol-Myers Squibb decision.
The decision, by Judge Ronnie. L. White of the U.S. District Court for the Eastern District of Missouri, is in line with other trial court findings across the country taking a "wait-and-see" approach to the outcome of appeals that may yet land with the U.S. Supreme Court.
Two appeals, one before the D.C. Circuit involving Whole Foods and its employees, and another before the 9th Circuit, are likely to be decided this year.
In the underlying case before the U.S. District Court for the Eastern District of Missouri, Swinter v. Service of Process Agents (SPA), Swinter sued the Virginia-based company for allegedly sending unsolicited faxes in violation of the Telephone Consumer Protection Act.
After plaintiff applied for class action certification, the defendant filed a motion asking the court to dismiss for lack of personal jurisdiction. SPA argued that the action should be limited to Missouri residents only and cited the Bristol-Myers Squibb decision.
"I think this will be an issue nationwide," Ronald J. Eisenberg, of Chesterfield-based Schultz & Associates, the attorney for the plaintiff, told the St. Louis Record. "Different courts may go different ways. Eventually it is going to the Supreme Court."
The Bristol-Myers Squibb decision, by an 8-1 margin, overturned a finding by the California Supreme Court allowing 592 out-of-state residents to be included in a mass action against the pharmaceutical company even though the alleged injuries did not relate to any conduct by the defendants in the state.
California's highest court reasoned it could proceed because of the state's "sliding scale," which calculates damages depending on the degree of contact between the defendants and those allegedly injured.
The Supreme Court reversed, essentially ruling there must be a clear connection between the residence of the injured party, the defendant, and the state where the wrongdoing is alleged to have happened.
Since the ruling, defendants in various class action suits have attempted to persuade courts to apply this ruling to unnamed, out-of-state plaintiffs.
SPA argued that the "putative non-Missouri class members were not injured in Missouri and plaintiff cannot assert a claim against a non-resident defendant in a state with no connection to their claims."
But in his ruling, White stated, "No court of appeals has engaged the question of whether BMS requires a finding of specific personal jurisdiction with respect to unnamed members of a putative class action suit."
He added, "The court agrees that a class action fundamentally differs from a mass tort action, particularly based upon the procedural safeguards present in class actions..."
Eisenberg, who said his client was not just claiming statutory violations of the TCPA but also damage due to sending of the communications, said the case will now move forward where a decision will be made whether to certify the suit as a class action
"I am optimistic that the case will go forward," Eisenberg said. "Up to this point, we have not been able to take discovery. Even though it was filed a while ago, there has been no case management."
Eisenberg said he does believe the case will be settled before any final decision settling arguments over whether Bristol-Myers Squibb applies to class actions.
The attorney noted that, if the District Court had ruled in favor of the defendant, limiting any class to the state of Missouri, then the discovery process would involve finding all the faxes sent to the state's residents.
But SPA in its argument "cites primarily to mass tort, not class action claims from this district," White wrote.
"The court applies the reasoning of at least one other district court from the 8th Circuit (and from various other districts), refusing to extend the holding of BMS to the class action context," White stated, before quoting the core argument behind class actions, one that is likely to repeated right up to the Supreme Court.
"In a mass tort action, each plaintiff is a real party in interest to the complaints; by contrast, in a putative class action, 'one or more plaintiffs seek to represent the rest of the similarly situated plaintiffs, and the 'named plaintiffs' are the only plaintiffs actually named in the complaint."
White concluded, "Accordingly, the court follows the better reasoned decisions declining to extend BMS to class actions and denies defendant's motion to dismiss."