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May 12, 2020

Lit Alerts—May 2020

A Publication of the Litigation Practice Group

Employment: Eleventh Circuit Reverses Employer's Summary Judgment on Pregnancy Discrimination Claim

Last month, the Eleventh Circuit Court of Appeals applied the Supreme Court's Young v. United Parcel Services (2015) burden-shifting framework to vacate a grant of summary judgment in an employer's favor in a Pregnancy Discrimination Act (PDA) claim. This was the Eleventh Circuit's first application of the Young burden-shifting framework.

Kimberlie Durham was working as an emergency medical technician for Rural/Metro Corporation when she became pregnant. Her job ordinarily required her to lift more than 100 pounds. When her doctor recommended she not lift more than 50 pounds during pregnancy, she requested a temporary reassignment. Rural's policies reserved such reassignments primarily to employees injured on the job, and the company denied Durham's request. Durham alleged a violation of the PDA, which mandates that women who are pregnant be treated similarly for all employment-related purposes as their non-pregnant coworkers who are similar in their ability or inability to work.

The district court granted summary judgment for the employer after finding that Durham had failed to establish a prima facie case of discrimination under the Young framework because she did not demonstrate that Rural treated pregnant employees differently than coworkers who are similar in their ability or inability to work. The court reasoned that Rural treated all job performance issues outside of workplace injuries in the same manner, whether or not they related to an employee's pregnancy; employees suffering workplace injuries were not "similar in their inability to work" and so were not appropriate comparators.

The Eleventh Circuit vacated and remanded. It ruled that, in analyzing whether Durham had established her prima facie case under Young, the district court should not have taken into account the employer's rationale for its differential treatment of its employees, but should have only considered a single criterion—"one's ability to do the job." Because the impact on job performance arising from workplace injury and pregnancy are the same—a temporary inability to lift heavy weights—Durham established her prima facie case by showing that Rural treated workplace injury differently than pregnancy in providing temporary light duty reassignments.

On remand, the district court will have to consider the rest of the Young burden-shifting analysis, which will permit the employer to re-try its alleged justification for its differential treatment of workplace injuries and pregnancy in granting temporary light duty assignments.

Class Actions: Seventh Circuit Rejects Application of Bristol-Myers Personal Jurisdiction Decision to Putative Nationwide Class Actions

In Mussat v. IQVIA, No. 19-1204, 2020 WL 1161166 (7th Cir. Mar. 11, 2020), the plaintiff, Florence Mussat, an Illinois physician doing business through a professional services corporation, received unsolicited faxes that failed to include the opt-out notice required by the Telephone Consumer Protection Act (TCPA). Mussat brought a putative nationwide TCPA class action in the Northern District of Illinois against IQVIA, Inc., a Delaware corporation headquartered in Pennsylvania. IQVIA argued the district court did not have personal jurisdiction over it for the non-Illinois class members' claims and moved to strike the class definition.

The district court granted IQVIA's motion, reasoning that under Bristol-Myers Squibb Co. v. Superior Court, 137 S. Ct. 1773 (2017) (BMS), both the named plaintiff and the unnamed class members had to show the court had personal jurisdiction over IQVIA for their claims. In BMS, the Supreme Court held that non-California residents did not prove a sufficient connection between their claims and BMS's contacts with the forum (California) to support the exercise of specific jurisdiction.

On appeal, the Seventh Circuit reversed and remanded, holding that BMS does not apply to nationwide class actions filed in federal court under a federal statute. In reaching this decision, the court drew a "critical distinction" between class actions, which contain unnamed class members who are not "full parties," and other types of aggregate litigation such as mass torts, in which "all of the plaintiffs are named parties to the case."

The Seventh Circuit concluded that unnamed class members do not each have to show minimum contacts with the forum state in order to establish personal jurisdiction over a class defendant.

On April 8, 2020, IQVIA filed a petition for rehearing. The court has not yet ruled on that petition.

Removal Jurisdiction: Fifth Circuit Allows "Snap" Removal Before Forum Defendants Are Served

In Texas Brine Co. v. American Arbitration Ass'n, the Court of Appeals for the Fifth Circuit held that a removal before forum-citizen defendants were served, known as "snap" removal, was proper. No. 18-31184, 2020 WL 1682777 (5th Cir. Apr. 7, 2020). Texas Brine filed a lawsuit in Louisiana state court against the American Arbitration Association (AAA) and individual arbitrators of a dispute between Texas Brine and Occidental Chemical Corporation (Oxy). AAA removed the case to the US District Court for the Eastern District of Louisiana before its co-defendants, both Louisiana residents, were served. The district court held that the removal was proper and declined to remand. The Fifth Circuit affirmed.

Texas Brine and Oxy were parties to a brine supply contract with an arbitration clause that provided for arbitration under the rules of the AAA. After a dispute arose under the contract, Texas Brine learned that two of the arbitrators had conflicts that had not been disclosed. Texas Brine successfully moved to vacate the panel's substantive rulings in state court, and then filed a lawsuit against the AAA and the two conflicted arbitrators to recover costs and damages. Five days after the lawsuit was filed, and before the two arbitrators were served, the AAA removed the case to federal court on diversity grounds. The district court denied remand and entered judgment in favor of the defendants, which the Fifth Circuit affirmed.

The Fifth Circuit began its analysis by noting that 28 U.S.C. § 1441(b)(2), the "forum-defendant rule," is procedural and not jurisdictional. This rule provides that a civil action otherwise removable solely on diversity grounds "may not be removed if any of the parties in interest properly joined and served as defendants is a citizen of the State in which such action is brought." The district court had subject matter jurisdiction over the case because Texas Brine (a Texas corporation) was diverse from the AAA (a NY corporation) and the two arbitrators (Louisiana residents). Had all defendants been "properly joined and served" at the time of removal, the case would not have been removable under section 1441(b)(2). However, the forum-defendant rule did not prevent removal, the court held, because at the time AAA filed its snap notice of removal, the case was "otherwise removable" and the only defendant "properly joined and served," the AAA, was not a citizen of the forum state.

In allowing snap removal, the Fifth Circuit follows the Second and Third Circuits. Gibbons v. Bristol-Myers Squibb Co., 919 F.3d 699 (2d Cir. 2019); Encompass Ins. Co. v. Stone Mansion Rest. Inc., 902 F.3d 147 (3d Cir. 2018); see also McCall v. Scott, 239 F.3d 808, 813 n.2 (6th Cir. 2001) (interpreting Section 1441(b)(2) to allow snap removal in dicta).

© Arnold & Porter Kaye Scholer LLP 2020 All Rights Reserved. This newsletter is intended to be a general summary of the law and does not constitute legal advice. You should consult with counsel to determine applicable legal requirements in a specific fact situation.