The appeal at issue originated from a class action lawsuit filed by Whole Foods Market’s employees in the United States District Court for the District of Columbia. Molock v. Whole Foods Mkt., Inc., 297 F.Supp. 3d 114 (D.D.C. 2018). Specifically, on June 22, 2017, Whole Foods Market’s employees filed a class action lawsuit for unpaid wages. The class consisted of current and former Whole Foods Market employees from the District of Columbia and several states. The employees claimed that they were not paid their entitled bonuses as a result of managers manipulating certain labor cost and time record numbers to meet Whole Foods Market’s “gainsharing” bonus program. The “gainsharing” program is to incentivize department productivity and revenue. Under the program, and as part of the employee compensation package, Whole Foods Market awarded bonuses to employees whose departments performed under budget by automatically distributing the surplus savings among the employees in that department. Further, the employees asserted that manipulation of these numbers was a nation-wide, systemic practice at Whole Foods Market stores.

Whole Foods Market argued that the class’s claims are not based on any conduct that solely occurred in the forum, the District of Columbia, and thus, the class members should not be able to attach their claims against Whole Foods Market into a single class because the District of Columbia’s class members’ claims are similar to the claims of the non-resident class members. Whole Foods Market asserted that the personal jurisdiction inquiry of the Supreme Court in Bristol-Myers Squibb Co. v. Superior Court of California, San Francisco County, 137 S. Ct. 1773 (2017) controls. In Bristol-Myers, a group of plaintiffs consisting of California residents and residents from 33 other states brought a mass tort action in California state court. Applying settled principles regarding specific jurisdiction, the Supreme Court explained that the California state court’s exercise of specific jurisdiction as to the non-residents’ claims was unconstitutional because there was no connection between the forum and the [non-residents’] specific claims.

Rejecting Bristol-Myers’s reasoning, the District Court denied Whole Food Market’s motion to dismiss the complaint as to non-resident putative class members for lack of personal jurisdiction. The District Court agreed with the Plaintiff’s argument that Bristol-Myers, a mass tort action, should not extend to class actions like this matter because it “would effectively eviscerate all multi-state class actions and the purpose of the Federal Rules of Civil Procedure Rule 23.” Further, the District Court found that the additional elements required to prove in class certification provide the additional due process safeguards not applicable to the mass tort context.

On October 31, 2018, Whole Foods Market filed an interlocutory appeal to the United States Court of Appeals for the District of Columbia Circuit relevant to the District Court’s interlocutory order discussed above. Whole Foods Market Group, Inc. v. Michael Molock, et al., (No. 18-7162).

Whole Foods Market’s appeal highlights a legal issue that has been brewing for some time. Whole Foods Market is challenging the District Court’s refusal to dismiss the claim relevant to the putative class members for lack of personal jurisdiction based on the Bristol-Myers decision. Whole Foods Market is arguing that Bristol-Myers “made clear that each plaintiff, no matter how similarly situated, must independently establish personal jurisdiction over his or her claim.”  Whole Foods Market filed its Reply Brief on May 10, 2019, and a decision remains outstanding. Currently, courts around the country are grappling with the issue as to whether Bristol-Myers applies to cases heard in federal courts since the Supreme Court addressed the state court’s actions in a mass tort case where class certification was not effectuated. Additionally, the Supreme Court has yet to clarify the issue.

If the D.C. Circuit decides that the Bristol-Myers standard applies to federal class actions, plaintiffs may have the ability to engage in extensive forum shopping. In other words, plaintiffs could file class action suits in any federal court across the country if a single individual whose claim has the requisite forum connection is willing to sign up as a named plaintiff. Thus, the due process limitations based on personal jurisdiction would become meaningless.

UPDATE: September 19, 2019

The answers to a Bristol-Myers jurisdictional question are on the horizon. Specifically, can unnamed class members with no connection to the jurisdiction where the class action complaint was filed be prevented from pursuing their claims? With oral arguments scheduled for September 25, 2019 in Whole Foods Market Group, Inc. v. Michael Molock, et al., (No.18-7162) in the D.C. Circuit Court, other federal courts of appeals are also set to hear arguments related to this question.

For example, the Seventh Circuit will hear arguments of a similar jurisdictional issue in a consumer class action against the health-care technology company IQVIA, Inc. on September27, 2019. Mussat v. IQVIA (No. 19-01204). Currently, federal courts are divided on whether the Bristol-Meyers standard applies to class actions. The Circuit Courts’ decisions on this issue could result in corporations facing multistate class actions in the state where they are headquartered or incorporated or restrict workers and consumers as class action plaintiffs.

UPDATE: APRIL 15, 2020

On March 10, 2020, the D.C. Circuit affirmed the District Court’s decision to deny Whole Foods Market’s motion to dismiss on the merits in a 2-1 majority. See Molock v. Whole Foods Mkt. Group, Inc., 952 F.3d 293 (D.C. Cir. 2020). However, the D.C. Circuit sidestepped the jurisdictional question of whether the Bristol-Myers standard applies to federal class actions with multi-state parties. Rather, absent class certification, it found Whole Foods Market’s motion to be premature since putative class members are not currently parties before the court.

The majority applied Supreme Court precedent to posit that only after the putative class members are added to the action by way of class certification under Rule 23 of the Federal Rules of Civil Procedure can the District Court weigh in on Whole Foods Market’s motion to dismiss pursuant to jurisdictional principles. Specifically, “it is class certification that brings unnamed class members into the action and triggers due process limitations on a court’s exercise of personal jurisdiction over their claims.” (citations omitted). Thus, any decision purporting to dismiss putative class members before that point would be purely advisory because the court only has power over the parties before it. Nevertheless, the majority’s decision does not preclude Whole Foods Market from asserting the Bristol-Myers standard once the class is certified.

Note that Judge Silberman rejected the majority’s assertion that Whole Foods Market’s motion was premature in his dissent. Rather, Judge Silberman contends that Whole Foods Market’s interlocutory appeal was not based on the Court’s jurisdiction over the unnamed putative class members, but rather the named plaintiffs’ ability to bring its claims on behalf of the putative class. Further, he states that Whole Foods Market’s motion is a “run-of-the-mill attack on class certification at the pleading stage, and such a motion was not premature.” Thus, he would have reached the Bristol-Myers question and held that the class’ claims are not premised upon Whole Foods Market’s contacts with the District of Columbia, and consequently, the matter cannot proceed in the jurisdiction.

Given the D.C. Circuit’s opinion in Molock, it remains unclear whether the Bristol-Myers standard applies in the class action context. There are a number of Circuits currently grappling with the issue, and if a Circuit split occurs, the Supreme Court will likely take the opportunity to clarify its stance with respect to the issue, which may give rise to a potential alteration to the class action landscape from a jurisdictional perspective.