CHICAGO — A recent ruling by a federal judge that non-Illinois residents cannot participate in a class-action suit has far-reaching implications, according to a local attorney. The ruling came in the case of Joshua DeBernardis v. NBTY and United States Nutrition, the makers of the supplement Body Fortress 100 percent Glutamine Powder.
Judge Harry Leinenweber relied on the June 19, 2017, U.S. Supreme Court decision in Bristol-Myers Squibb Co. v. Superior Court of California (BMS) in granting the defendants’ motion to dismiss the non-resident plaintiffs with state law claims from the DeBernardis suit.
“For businesses and employers facing nationwide class action lawsuits, this ruling is instructive in regards to strategies to fracture and minimize the class size, and limit potential liability," said Alex Karasik, an associate attorney at Seyfarth Shaw’s Chicago office.
Karasik noted the reasoning underlying this decision and how the BMS ruling impacted it.
“The court explained that in the U.S. Supreme Court’s landmark ruling in Bristol-Myers Squibb, the U.S. Supreme Court pointed out that a variety of interests must be considered in determining whether personal jurisdiction is present, including those of the forum state and the plaintiff, but primarily, those of the defendant," Karasik said. "Acknowledging it was a close call here, the court followed Bristol-Myers Squibb and outlawed the nationwide class action since there was no general jurisdiction.”
Businesses should be pleased with this ruling, Karasik said, as it may discourage class action suits against companies.
“The plaintiffs’ class-action bar isn’t likely to change their strategies based on one district court’s opinion," he said. "But if courts across the country consistently interpret and apply the Bristol-Myers Squibb framework in the manner that it was applied here, it is certainly possible that the plaintiffs’ class-action bar may be less inclined to assert similar nationwide class actions.”
However, Karasik said that businesses besieged by class actions still should fight back.
“Businesses and their counsel should be aggressive in regards to attacking nationwide class action lawsuits that involve state law claims of non-resident classes of plaintiffs," he said. "Fracturing these nationwide class actions minimizes the impact of these 'bet-the-company' cases by making them more manageable to defend and reduces businesses’ potential financial exposure.”