WDVA: Class jurisdiction extended to non-resident claims

A recent U.S. Supreme Court case did not require dismissal of putative class claims that might arise from illegal prerecorded calls to class members outside Virginia. While that approach may be logical in the mass-tort context, it is unnecessary in a putative class action.

Background

Plaintiff Christopher Morgan alleges that Defendant U.S. Xpress Inc. used pre-recorded calls to recruit him to become a truck driver. Those calls are the basis of Morgan’s putative class-action lawsuit, which claims they violated the Telephone Consumer Protection Act.

Count I of Morgan’s complaint alleges that U.S. Xpress violated the Act by calling his “residential telephone line.” Count II alleges that U.S. Xpress violated the Act by calling Morgan’s “cellular telephone line.” U.S. Xpress has moved to dismiss, on grounds that the complaint lacks allegations to support Count I and that this court lacks personal jurisdiction over the claims of class members who are not Virginia residents.

Residential telephone line

Calls made to a cell phone are not calls made to a “residential telephone line” under the Act, so Morgan’s Count I, which relates to “residential telephone line” violations, will be dismissed.

The underlying allegations are simply that Morgan received four calls to his cell phone. The Act’s structure makes clear that a call can be to either a cell phone or a residential line, and the statute addresses those two possibilities in two different sections, describing them with different language in each. Shoehorning cell phones into the “residential telephone lines” portion of the statute would erase these distinctions.

Class jurisdiction

As a Nevada corporation headquartered in Tennessee, U.S. Xpress is not subject to general jurisdiction in Virginia. The question is whether specific jurisdiction exists and particularly what effect, if any, Bristol-Myers Squibb Co. v. Superior Ct. of Calif., San Francisco Cnty., 137 S. Ct. 1773 (2017), has on plaintiffs’ ability to bring putative class actions on behalf of a nationwide class against defendants subject to only specific jurisdiction.

Like most of the courts to have encountered this question, this court concludes that Bristol-Myers Squibb’s holding and logic, rendered in the mass-tort context, do not extent to the federal class-action context. 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 other similarly situated plaintiffs. Bristol-Myers Squibb framed the specific jurisdiction at the level of the suit, saying it must arise out of or relate to the defendant’s contacts with the forum. Here, there’s only one suit. While Morgan may end up representing other class members, the only suit currently before the court does arise out of or relate to the defendant’s contacts with the forum.

Also, Federal Rule of Civil Procedure 23’s requirements supply due process safeguards not applicable in the mass-tort context. Because of those requirements, class-action defendants face a unitary, coherent claim to which they must respond only with a unitary, coherent defense. By contrast, significant variations might occur in a mass-tort action.

Finally, Congress created class actions to help overcome the problem that small recoveries do not provide the incentive for any individual to bring a solo action. This court is reluctant to conclude that Bristol-Myers Squibb’s straightforward application of settled personal jurisdiction principles works as a substantial limit on that valuable tool. Thus, the court will not rush to carry that case beyond its holding and logic.

Motion to dismiss granted in part; denied in part.

Morgan v. U.S. Xpress Inc., Case No. 3:17cv85, July 25, 2018. WDVA at Charlottesville (Moon). VLW No. 018-3-302, 12 pp.