Bristol-Myers Squibb Co. Photo: Shutterstock.com

The first federal appeals court to address a growing question over whether the U.S. Supreme Court's jurisdictional ruling in Bristol-Myers Squibb v. Superior Court of California should apply to class actions heard arguments Wednesday—but it might not come up with the answer.

Lawyers for Whole Foods Market petitioned the U.S. Court of Appeals for the District of Columbia to address a "novel issue of constitutional due process" created by Bristol-Myers, a 2017 decision that limited the jurisdictions where corporate defendants could be sued in "mass torts," or cases involving the individual claims of multiple plaintiffs. Defendants across the country have argued that the ruling should apply to class actions.

But Judge David Tatel, at the start of Wednesday's hearing, asked Whole Foods attorney Gregory Casas whether the entire issue was premature, given that the judge hadn't yet certified the class action against Whole Foods.

"The Supreme Court has said that putative class members are not parties," Tatel told Casas, a shareholder at Greenberg Traurig in Austin, Texas. "How do you talk about a court's jurisdiction over someone who's not a party? That's what I don't understand."

The court should waive that argument, Casas responded, because the plaintiff raised it for the first time in an appeal brief.

But Tatel's questions raised the prospect that the D.C. Circuit might punt on the Bristol-Myers question, said Richard Samp, chief litigation counsel for the Washington Legal Foundation.

"It is a plausible result of today's argument that the court will rule, 'on second thought, even though we granted interlocutory appeal in this case, we think it's better to defer answering the question until such time as we know whether the district court even thinks class certification is proper'—in which case, they won't have answered the Bristol-Myers question," he said. "Clearly, neither attorney today wanted that result."

The Washington Legal Foundation, along with the U.S. Chamber of Commerce, filed amicus briefs supporting Whole Foods, and Public Citizen Inc. did so for the plaintiff.

Both Casas and plaintiffs attorney Matthew Wessler of Washington's Gupta Wessler declined to comment.

Bristol-Myers held that most of the 600 plaintiffs in a mass action over the blood thinner Plavix had failed to establish specific jurisdiction, because there wasn't enough of a link between their claims and California, where they brought their lawsuit. To go forward would violate the defendant's due process rights under the Fourteenth Amendment, the court held.

In a footnote to her dissent, U.S. Supreme Court Associate Justice Sonia Sotomayor noted that the majority's opinion failed to address its impact on nationwide class actions. On that question, judges have divided, and no federal appeals court has ruled, on the issue.

Another case, however, is pending before the U.S. Court of Appeals for the Seventh Circuit. Oral arguments are this Friday. In that case, a doctor sued IQVIA Holdings Inc., citing violations of the Telephone Consumer Protection Act. IQVIA, a health care information company in Pennsylvania, argued successfully to a district court judge to dismiss a nationwide class action in Illinois whose members have no relationship to Illinois. The judge in that case found that Bristol-Myers applies to class actions.

On the D.C. Circuit, Tatel was joined by Judge Laurence Silberman and Chief Judge Merrick Garland of the U.S. Court of Appeals for the District of Columbia.

The case involves seven current and former Whole Foods employees in the District of Columbia and five other states who alleged that the Texas-based grocery store chain failed to pay bonuses under a "gainsharing" incentive program, which compensated employees for keeping their departments under budget. The case, filed in 2016, alleges the wrongdoing was nationwide, despite Whole Foods firing employees at nine of its 457 stores.

U.S. District Judge Amit Mehta of the District of Columbia, citing Bristol-Myers, dismissed two lead plaintiffs who had no connection to the District of Columbia but allowed the nationwide class to go forward. In so doing, Mehta disagreed with Whole Foods that Bristol-Myers governed the claims of the absent class members who did not live in the District of Columbia.

On Wednesday, Wessler emphasized there were many differences between the Whole Foods case and Bristol-Myers, which, for one thing, involved a state court decision.

"This is not like a mass tort action, like the action that was at issue in Bristol-Myers, where each individual was required to serve their individual complaint and was a named party in the aggregate case," he told the panel. "Absent class members don't need to do anything."

Casas, the Whole Foods attorney, however, argued that allowing the District of Columbia to oversee claims involving class members in other states violated its due process rights under the Fifth Amendment, just as the Supreme Court found in Bristol-Myers as to the Fourteenth Amendment.

"Even though this is unchartered, unconstitutional territory, the Bristol Myers case crystallized the due process case law that has been developed over the past several decades," Casas told the panel.

Whole Foods got some support from Silberman, who questioned many of Wessler's arguments and his reason behind filing in D.C.

"Why in Lord's name wouldn't you drive 100 miles down the road and file this case in federal district court in Delaware where there would be no question you'd have general jurisdiction, and you could have a class action that would cover everybody in the country?" the judge asked Wessler. By filing in the District of Columbia, he said, the plaintiff ensures a long wait for a Supreme Court decision "because there's no question there's going to be a Supreme Court decision on this one."