This week, the Court addresses when a defendant can raise personal jurisdiction objections to non-resident members of a putative class, and explains the scope of the Telephone Consumer Protection Act’s prohibition on robocalls to cell phones.
The Court holds that a defendant does not waive an objection under Bristol-Myers Squibb Co. v. Superior Court of California, 137 S. Ct. 1773 (2017) to a district court’s certification of nationwide classes when it fails to include a personal jurisdiction challenge to the claims of non-resident putative class members in its motion to dismiss.
The Panel: Judges Bybee, Bress, and Cardone (W.D. Tex.), with Judge Bress writing the opinion, and Judge Cardone dissenting.
Key Highlight: The defendant “could not have moved to dismiss on personal jurisdiction grounds the claims of putative class members who were not then before the court, not was [the defendant] required to seek dismissal of hypothetical future plaintiffs.”
Background: Plaintiff Moser, a California resident, sued Benefytt, a Delaware corporation, for violations of the Telephone Consumer Protection Act. Benefytt moved to dismiss the complaint, but did not move to dismiss on grounds of lack of personal jurisdiction. After Benefytt’s motion to dismiss was denied, Moser sought certification of nationwide classes. Benefytt opposed, arguing that the court could not certify nationwide classes because under the Supreme Court’s decision Bristol-Myers Squibb Co. v. Superior Court of California, 137 S. Ct. 1773 (2017) it lacked personal jurisdiction over the claims of non-California putative class members. The district court held that Benefytt waived its Bristol-Myers argument pursuant to Federal Rule of Civil Procedure 12(h) when it failed to include a challenge to personal jurisdiction in its Rule 12 motion to dismiss.
Result: The Ninth Circuit reversed. First, the Ninth Circuit held that it had appellate jurisdiction under Federal Rule of Civil Procedure 23(f) to review the personal jurisdiction waiver issues that formed part of the district court’s certification decision. Under Rule 23(f), “[a] court of appeals may permit an appeal from an order granting or denying class-action certification under this rule.” Here, the personal jurisdiction and waiver questions went directly to the scope of the classes that the district court certified and were part of the class certification order that the Court had granted Benefytt leave to appeal. The Court found support for its decision in similar decisions from the Fifth and Seventh Circuits, and the Supreme Court’s decision in BP PLC v. Mayer & City Council of Baltimore, 141 S. Ct. 1542 (2021), which held that 28 U.S.C. s. 1447(d) gives the court of appeals jurisdiction to review all the defendant’s grounds for removal and not just those made under sections 1442 or 1443. As BP explained, and as is true here, it is the order that is appealable, and thus a court of appeals may address any issue fairly included within it.
Second, the Court held that Benefytt did not waive its personal jurisdiction objection to class certification by failing to assert the defense at the Rule 12 motion to dismiss stage. Under Rule 12(b)(1)(A) a party “waives any defense” listed in Rule 12(b)(2) (including lack of personal jurisdiction) by “omitting it from a motion in the circumstances described in Rule 12(g)(2).” Rule 12(g)(2), in turn, provides that “a party that makes a motion under this rule must not make another motion under this rule raising a defense or objection that was available to the party but omitted from its earlier motion.” Here, the Rule 12(b) defense that the district court lacked personal jurisdiction over unnamed, non-resident putative class members was not an “available” defense at the motion to dismiss stage because unnamed putative class members were not yet parties to the case. The Court observed that the Fifth and D.C. Circuits agree that a defendant does not waive the right to bring a Bristol-Myers-based personal jurisdiction challenge to the claims of unnamed non-resident class members by not raising this challenge in its motion to dismiss.
In dissent, Judge Cardone concluded that Federal Rule of Civil Procedure 23(f) does not confer appellate jurisdiction over an exercise of personal jurisdiction. In a Rule 23(f) appeal, an appellate court must limit its review to whether the district court correctly selected and applied Rule 23’s criteria and personal jurisdiction over putative class members is not one of those criteria. It does not matter that the district court rejected the Rule 12(b)(2) motion in the same document as the class certification order because Rule 23(f) appeals are limited to those issues that bear on the soundness of the class certification decision.
The Court holds the Telephone Consumer Protection Act’s prohibition on robocalls to cell phones is not limited to calls that include advertisements or constitute telemarketing.
The Panel: Judges Fisher (10th Cir.), Watford, and Bumatay, with Judge Watford writing the opinion.
Key Highlight: “The applicable statutory provision prohibits in plain terms ‘any call,’ regardless of content, that is made to a cell phone using an automatic telephone dialing system or an artificial or pre-recorded voice, unless the call is made either for emergency purposes or with the prior express consent of the person being called.”
Background: Jonathan Loyhayem filed a TCPA action alleging that Frasier Financial called his cell phone and left an unsolicited “job recruitment” message using an automated telephone dialing system and an artificial or pre-recorded voice. The district court dismissed for failure to state a claim, holding that the TCPA and its implementing regulations prohibit robocalls to cell phones only when the calls include an “advertisement” or constitute “telemarketing,” as defined by the Federal Communications Commission, and not job recruitment messages.
Result: The Ninth Circuit reversed. The Court explained that “[t]he applicable statutory provision prohibits in plain terms ‘any call,’ regardless of content, that is made to a cell phone using an automatic telephone dialing system or an artificial or pre-recorded voice, unless the call is made either for emergency purposes or with the prior express consent of the person being called.” Because Loyhayem alleged the call was unsolicited and not for emergency purposes, the Court concluded he had adequately stated a claim under the TCPA.
The Court’s interpretation of the FCC’s implementing regulations did not change that outcome. The regulation “closely tracks the language of the statute,” the Court pointed out. And a separate provision requiring express written consent for advertising or telemarketing robocalls (as opposed to allowing oral consent for other calls) did not remove other types of calls from the scope of the prohibition.