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Personal Jurisdiction of Opt-In Plaintiffs Under the FLSA: Will the Supreme Court Resolve the Circuit Split this Summer?
Friday, March 3, 2023

Following the U.S. Supreme Court’s landmark opinion in Bristol-Myers Squibb Co. v. Superior Court of California, 137 S. Ct. 1773 (2017), a question arising under the Fair Labor Standards Act (FLSA) collective actions is whether opt-in plaintiffs who have joined a lawsuit filed by another employee, must establish personal jurisdiction in the same way as the lead plaintiff. Most notably, this open question impacts employees residing outside the home state of the lead plaintiff. To date, four of the thirteen Circuit Courts of Appeal have directly addressed the issue, but those courts are not in agreement.

An employee whose case was impacted by this young circuit split recently sought certiorari from the Supreme Court in Fischer v. Federal Express Corp.No. 22-396, hoping to have the Court resolve the split. The Court is scheduled to discuss her petition at its conference today.

So will the Supreme Court take the case?  The decision to grant or deny certiorari in any case depends on many factors, including the importance of the legal issues, the level of conflict among the lower courts, and the need for the Court to provide clarity and uniformity to the law. Signs are pointing towards Fischer raising an important legal issue impacting employers nationwide that the Court may want to decide. Yet, as Respondents have argued, the case is not an attractive one for resolving the issue given other procedural concerns with the decision below. 

FLSA Collective Actions

The FLSA sets standards for minimum wage and overtime pay. Employees suing under the FLSA may sue individually, or on behalf of all other similarly situated employees in a collective action under 28 U.S.C. 216(b).  Unlike traditional class actions under Rule 23 of the Federal Rules of Civil Procedure in which individuals are a member of the class unless they opt-out, however, employees in a collective action must affirmatively file a written consent to join—or opt-in—to be a member of the collective action. Each opt-in plaintiff is then treated as an actual party to the litigation unlike those absent class members in a traditional class action.

On its most basic level, personal jurisdiction refers to a court’s authority over a defendant in a particular case. For a court to exercise personal jurisdiction over a defendant, the plaintiff must prove the defendant has minimum contacts with the state in which the court is located such that the exercise of jurisdiction would not offend traditional notions of fair play and substantial justice. The reasoning behind personal jurisdiction is, in part, to avoid dragging a company located in foreign state halfway across the country to defend a lawsuit in another state. 

Setting the Stage: Bristol-Myers Squibb

In Bristol-Myers Squibb, the United States Supreme Court considered whether California courts had personal jurisdiction over a pharmaceutical company in eight lawsuits brought by 86 California residents and 592 non-California residents. The plaintiffs raised various products liability and false advertising claims under state law, challenging Bristol–Myers’ development and distribution of a drug called Plavix. Bristol-Myers challenged the court’s jurisdiction over the non-residents’ claims, but the trial court rejected the challenge and the California appellate courts ultimately agreed.

In reversing the California Supreme Court, the United States Supreme Court held that the California courts lacked personal jurisdiction over Bristol-Myers in the lawsuit because the company’s contacts with California were not sufficient to establish jurisdiction over the non-residents’ claims.  It was not enough, the Court explained, that the residents and non-residents’ claims were similar for the court to assert specific jurisdiction: “a defendant's relationship with a . . . third party, standing alone, is an insufficient basis for jurisdiction.” The Court left undisturbed the ability of non-resident plaintiffs to sue in states having general jurisdiction over Bristol-Myers, though.

Applying Bristol-Myers Squibb in Collective Actions

The ruling in Bristol-Myers Squibb is shaping collective actions under the FLSA and the rights of opt-in plaintiffs. In particular, the ruling has made it harder for opt-in plaintiffs to bring FLSA claims in courts outside the companies’ home states.

Before Bristol-Myers Squibb, it was common for plaintiffs to bring FLSA claims as part of a collective action in which they would join a lawsuit brought by one or more named plaintiffs regardless of the opt-in plaintiffs’ residence. This allowed plaintiffs to pool their resources and to harness the economies of scale that come with bringing a collective action. But in the wake of Bristol-Myers Squibb, several Circuit Courts of Appeal have made it tougher for opt-in plaintiffs to bring FLSA claims in courts outside of their home states (or, at least, the home states of their employers).

The First Three Courts to Address the Issue 

After Bristol-Myers Squibb, the Sixth and Eighth Circuits first addressed the personal jurisdiction issue just a day apart in Canaday v. The Anthem Companies, Inc.No. 20-5947 (6th Cir. Aug. 17, 2021), and  Vallone v. CJS Solutions Group, LLCNo. 20-2874 (8th Cir. Aug. 18, 2021). These courts have ruled that non-resident opt-in plaintiffs may not join collective actions against out-of-state companies when their claims are not connected to the employer’s activities in the state where the court is located.

Only four months later, though, the First Circuit departed from its sister circuits when addressing Bristol-Myers Squibb under the FLSA. Borrowing from the reasoning of the dissenting judge from the Sixth Circuit, the First Circuit ruled in January 2022 that courts do have personal jurisdiction over claims brought by non-resident opt-in plaintiffs. The court differentiated between the Fifth Amendment (impacting federal due process rights) and the Fourteenth Amendment (impacting due process rights applicable to the states). The employers sought certiorari, but the Supreme Court declined to hear the case in June 2022 (No. 21-1192). 

Now on Deck: Fischer v. Federal Express Corp

Christa Fischer is a former employee of Federal Express Corp. In her complaint, she alleges that FedEx violated the FLSA by misclassifying its package handlers as exempt from overtime pay.  She worked for FedEx in Pennsylvania, and sued in the Eastern District of Pennsylvania on behalf of herself and other similarly situated employees, seeking overtime pay and other relief. After two non-resident FedEx employees filed consent to join forms, the district court partially rejected Fischer’s motion for conditional certification—the first step of a two-step process for certifying a collective action under the FLSA. The district court concluded that it could grant conditional certification over the Pennsylvania-residents’ claims, but not over the non-residents’ claims given that FedEx is a Delaware corporation with its principal place of business in Tennessee.

Relying on Bristol-Myers Squibb, the Third Circuit granted an interlocutory appeal and affirmed. The Circuit Court rejected Fischer’s attempts to compare collective-action procedure to class-action procedure under Federal Rules of Civil Procedure Rule 23, and confirmed that the Fourteenth Amendment applies to each individual’s claim under the FLSA even when filed in federal court. The Circuit Court also rejected Fischer’s policy arguments in favor of finding jurisdiction existed.

Fischer then sought certiorari in October 2022. After requesting a response, FedEx filed its brief in opposition arguing that an insufficient circuit split exists and that caselaw in the area has not had sufficient time to develop. The Court has distributed the briefs and will discuss the case at its March 3, 2023 conference.

Will the Court Grant Certiorari?

The case presents an important legal issue impacting employers nationwide that the Court may wish to resolve to provide guidance across jurisdictions. But the issue is relatively new, having only really arisen in the wake of the Court’s 2017 Bristol-Myers Squibb decision. It has only been addressed by four circuit courts, having yet to “percolate” through the lower courts to better develop the arguments on both sides. Or as FedEx put it, the “circuit split is shallow and lop-sided, with only one outlier circuit,” weighing against the Court considering the issue just yet.

Questions also remain about whether the case sufficiently presents the issue given its procedural posture. Because the district court considered the jurisdictional issue only on a motion for conditional certification, the district court could later decertify the case and moot the jurisdictional question. Given this possibility, the case may not be a good procedural vehicle for resolving such an important jurisdictional issue.

It is hard to predict the cases the Court may entertain. Although there is still room on its docket to hear additional cases this term and the Court may very well want to resolve the issue given its nationwide implications, other procedural concerns may weigh against hearing the case. Employers should know in the weeks to come whether the Court will grant certiorari and place the case on track to be resolved by this summer.

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