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.