Fifth Circuit Weighs in on Personal Jurisdiction and Certification Issues in Rule 23 Class Actions

The application of the Supreme Court’s decision in Bristol-Myers Squibb Co. v. Superior Court of California, 137 S. Ct. 1773 (2017), to class actions has led to much confusion and an ever-widening circuit split. In Bristol-Myers, a mass action, the U.S. Supreme Court held that a California state court could not exercise jurisdiction over a non-California defendant with respect to claims of plaintiffs who did not reside in California and conduct that did not occur in California. The extent to which this holding applies to class and collective actions has divided federal district courts and courts of appeals.

In Cruson v. Jackson National Life Insurance Company, a Rule 23 class action, the Fifth Circuit left open the possibility that Bristol-Myers applies to prevent federal courts in Texas, Louisiana, and Mississippi from exercising jurisdiction over a non-resident defendant with respect to non-resident class members. The court weighed in on when a defendant waives this personal jurisdiction defense. The court also emphasized the role of individual considerations of state-law variations and damages in the Rule 23 class certification predominance inquiry.

The defendant, a Michigan corporation, was sued in Texas. The plaintiffs alleged defendant overcharged investors by miscalculating early withdrawal fees in breach of annuities contracts. The district court certified a nationwide class of investors and determined that defendant waived its personal jurisdiction defense regarding claims of non-Texans by failing to raise this issue its motion to dismiss—its first responsive pleading. Jackson appealed.

Raising Personal Jurisdiction Defense to Absent Class Members

The Fifth Circuit reversed the district court’s holding, determining that the personal jurisdiction defense was not “available” to defendant at the time it filed its motion to dismiss because there were no non-Texas class members “before the court” at that time. In the words of the appellate court, “[w]hat brings putative class members before the court is certification: ‘Certification of a class is the critical act which reifies the unnamed class members and, critically, renders them subject to the court’s power.’”  In other words, once the district court certified the class, bringing the non-Texas residents into the lawsuit, the personal jurisdiction defense became available for the first time. The Fifth Circuit also emphasized that defendant had acted to preserve this defense by raising it in its answer and in opposing the conditional certification motion.

Although the Fifth Circuit did not reach the merits of the personal jurisdiction defense, the court noted the split of authority regarding Bristol-Myers and did not foreclose the possibility that the decision could apply to bar the exercise of personal jurisdiction over the defendant with respect to the non-Texas class members’ claims. On remand, the district court will be tasked with analyzing this question.

Considering State-law Variations to Affirmative Defenses

The Fifth Circuit also examined the standard for certification of nationwide collective actions when state-law variations affect applicable affirmative defenses. Defendant argued, and the Fifth Circuit agreed, that the district court failed to properly account for the state-law variations at play in Jackson’s waiver and ratification defenses, which would depend heavily on state-law contract principles. Importantly, the Fifth Circuit did not hold that the nationwide class could not be certified, only that it was error for the district court to fail to consider whether the various applicable state laws were so inconsistent that individual contract interpretation issues would predominate over class-wide issues.

Measuring Damages on Class-Wide Basis

Finally, the Fifth Circuit held it was error for the district court to certify a nationwide class when plaintiffs failed to present a damages model that showed damages were capable of being measured on a class-wide basis. Plaintiffs presented a damages model for calculating only one aspect of the damages alleged, but offered barely a preliminary overview of other damage calculations. The Fifth Circuit instructed the district court on remand to reassess whether this second aspect of damages would involve individual calculations and defeat predominance.


This decision offers important guidance for employers defending Rule 23 class actions in the Fifth Circuit when the employer and some class members do not reside in the forum state. Employers in such situations should carefully consider when to raise a personal jurisdiction defense to absent class members and should bear in mind that the issue may not be waived, necessarily, if not raised on a motion to dismiss prior to certification. In addition, non-resident employers facing potentially nationwide collective actions should consider raising this defense in opposition to a motion for conditional certification. And, as always, defendants challenging the scope of a proposed class should emphasize state-law variations in affirmative defenses when a class contains plaintiffs from multiple states and scrutinize whether all aspects of damages are capable of measurement on a class-wide basis.

Information contained in this publication is intended for informational purposes only and does not constitute legal advice or opinion, nor is it a substitute for the professional judgment of an attorney.