We are on a personal jurisdiction roll this week. You might even say we’ve got Big Mo behind us. That Mo, of course, refers to Momentum, though it also nicely captures the fact that yesterday’s defense-favorable personal jurisdiction case (Addelson) came out of Missouri. Today’s case, Bauer v. Nortek Global HVAC LLC, 2016 WL 5724232 (M.D. Tenn. Sept. 30, 2016), is out of the Middle District of Tennessee. The Bauer case does not involve drugs or medical devices. Rather, a bunch of consumers claimed they bought bum air conditioners. But Bauer is a very interesting case because that ‘bunch’ of consumers styled themselves as a class or classes. Thus, Bauer offers a useful application of Bauman personal jurisdiction principles to class actions. The reasoning and prose are both sharp.
The Bauer class representatives came from Tennessee, Florida, Georgia, and Texas. (Why they didn’t add Alabama, Arkansas, Kentucky, Louisiana, Mississippi, and South Carolina to represent the entire SEC, we don’t know. In any event, it is certainly understandable why clever plaintiff lawyers might want to cobble together classes of aggrieved air-conditioner buyers who live in hot places.) The claims included breaches of warranties and violations of the various states’ deceptive trade practices acts. The defendants were not incorporated in Tennessee, nor did they have a principal place of business there. One of the defendants had a distribution/manufacturing facility in Tennessee. So what, you say? You are exactly right, as it turns out. The defendants filed a motion to dismiss all claims brought by the non-Tennessee plaintiffs for lack of personal jurisdiction. The defendants won that motion. They also moved to dismiss the Tennessee plaintiff’s claims based on the statute of limitations. The defendants won that motion, too. But for today’s purposes, we are focusing on the jurisdictional argument.
Let’s start with the demarcation between general and specific jurisdiction. Not to put too fine a point on it, but those Florida, Georgia, and Texas plaintiffs were litigation tourists. Not that we blame them. Nashville is a fine place to visit. We hope those plaintiffs sipped a drink at Tootsy’s, took in some fine art at the Frist Center, and visited the Ryman Auditorium for a Grand Ole Opry show. In the words of one of the all-time great residents of the Middle District of Tennessee, George Jones, those plaintiffs were making the “Grand Tour.” But they are not necessarily permitted to file lawsuits as part of that Grand Tour. Under Bauman, a corporation is subject to general personal jurisdiction (meaning it can be sued for just about anything, whether or not the alleged conduct or harm occurred in the forum state) only where it is “at home,” and that pretty much limits general jurisdiction to the place where a company was incorporated or its principal place of business. In this case, neither of those places was Tennessee. The plaintiffs pointed to the Tennessee distribution/manufacturing facility, as well as the “continuous and systematic contacts” by selling lots of products in Tennessee, but those arguments no longer cut it after Bauman. The Bauer court ruled that there was no general jurisdiction over the defendants.
Now we’re onto specific jurisdiction. That jurisdiction exists with respect to the folks who bought the HVAC units in Tennessee, but not anywhere else. Sure, maybe a crazy court might conclude that there were lots of sales in Tennessee, and the circumstances of those sales were pretty similar to the sales in, say, Georgia – heck, maybe the advertising was identical – and, since we’re throwing this big old litigation party anyway, we might as well include out of state visitors. But the Bauer case was not in California or Cook County, so it actually followed the law of personal jurisdiction. Accordingly, the Bauer court concluded that there was no personal jurisdiction over the plaintiffs from Florida, Georgia, and Texas. They must all go home, to places even hotter than Tennessee. Meanwhile, that Tennessee plaintiff was, in the words of Mr. Jones, “Alone Again.”
Now what we wonder, and what the Bauer court does not address, is whether this sort of ruling signifies some difficulty in creating nationwide class actions. It sure looks like out-of-state product liability named class representatives are goners under any rational personal jurisdiction analysis. Can personal jurisdiction theories confine class actions to the forum state, or at least cabin the class somehow? We don’t know. It is certainly something to make plaintiff lawyers sweat.