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Canaday v. The Anthem Cos.

Nurses for the Anthem Companies who work reviewing medical records in numerous states and the District of Columbia filed suit in federal district court in Tennessee alleging that Anthem misclassified them as exempt from the overtime pay rule in the Fair Labor Standards Act (FLSA). The named plaintiffs sought to proceed as a collective action on behalf “themselves and other employees similarly situated” who opt in to the suit, as provided for in Section 216(b) of the FLSA.

Anthem moved to dismiss the claims brought by out-of-state members of the collective action. Invoking the Supreme Court’s recent decision in Bristol-Myers Squibb v. Superior Court, Anthem argued that the federal court in Tennessee lacked personal jurisdiction over it with respect to the claims of members of the collective action whose claims arose outside Tennessee. Anthem did not dispute that the named plaintiffs in the collective action could bring their own claims in that court. The district court granted the motion and dismissed the claims in the collective action brought by employees who did not work in Tennessee. The plaintiffs appealed the ruling to the U.S. Court of Appeals for the Sixth Circuit.

Public Citizen, on behalf of itself and the National Employment Lawyers Association, filed a brief as amici curiae in support of the workers. The brief explained that Bristol-Myers addresses due process limits on the powers of state courts that do not apply directly to federal courts. In addition, although the provisions of the Federal Rules of Civil Procedure dealing with service of process incorporate some of the limits of the 14th Amendment’s Due Process Clause on state courts’ exercise of personal jurisdiction, we explained that the individual named plaintiffs in this case who worked or lived in Tennessee had properly effected service on Anthem, and the Federal Rules do not require opt-in members separately to satisfy the Rules’ requirements to serve a summons and a complaint on Anthem.

In a 2-1 opinion issued on August 17, 2021, however, the Sixth Circuit held that federal courts lack personal jurisdiction over defendants with respect to claims brought by out-of-state plaintiffs in FLSA collective actions. The court subsequently denied the plaintiffs’ petition for rehearing.