Chicago Business Litigation Lawyer Blog
An Illinois Federal District court recently handed Telephone Consumer Protection Act (“TCPA”) claim defendants a win of sorts by slashing the size of a putative class, striking all out-of-state residents from the putative class on personal jurisdiction grounds. The case, Garvey v. American Bankers Insurance Co. of Florida, is just one of an increasing number of cases limiting the scope of potential class actions filed in states other than the defendant’s home state.
On May 10, District Judge Sharon Johnson Coleman of the District Court for the Northern District of Illinois struck all non-Illinois residents from a putative class in a TCPA class action filed against two Florida corporations. The ruling relied heavily upon the Supreme Court’s 2017 decision in Bristol Myers Squibb v. Superior Court of California, San Francisco Cty., 137 S. Ct. 1773 (2017), which limited California courts’ jurisdiction over an out-of-state defendant in a mass tort action.
Although not a mass tort case, Garvey concerns alleged telemarketing calls using an automated telephone dialing system to individuals without their prior express consent in violation of the TCPA. The plaintiff, who is an Illinois resident, sought to certify a class consisting of “[a]ll persons in the United States and its Territories” who had received similar calls from the defendants. The two defendants, both incorporated in and having their principal places of business in Florida, moved to strike all non-Illinois plaintiffs from the putative class on grounds that the court lacked general or specific personal jurisdiction over the defendants with regard to the claims of those plaintiffs. The defendants, however, did not challenge the court’s jurisdiction to adjudicate the claims brought by Illinois residents. The Garvey court relying on the Supreme Court’s decision in Bristol Myers agreed with the defendants, finding that it lacked personal jurisdiction over the companies to decide claims brought by nonresidents of Illinois.
The Supreme Court’s decision in Bristol Myers, while not a class action, dealt with a concept ultimately fundamental to every case: personal jurisdiction. Courts may hear a case and decide a claim only if it has personal jurisdiction over the defendant or defendants. Personal jurisdiction can be either general or specific. General jurisdiction exists in the defendant’s “home state,” which for a corporation is the state in which the corporation is incorporated or where is headquarters. As its name implies, general jurisdiction provides the broadest basis for a court to decide claims filed against a defendant. When a court has general personal jurisdiction, it can decide any claims against that defendant, assuming the court has subject matter jurisdiction to decide such a claim. Specific jurisdiction, on the other hand, arises out a defendant’s particular actions in a state. Where a court only has specific jurisdiction over a defendant, it may only decide claims that arise out of or relate to that defendant’s particular actions in the state. Continue reading ›