472 U.S. 797 (1985) (U.S. Supreme Court)
Phillips Petroleum Co. v.
Whether, consistent with the Due Process and Full Faith and Credit Clauses, (1) a state court may bind absent, nonresident plaintiff class members without requiring them to have minimum contacts with the forum, so long as they receive certain procedural protections; and (2) the forum may apply its own substantive law to a nationwide class action without a showing that the forum has significant contacts with each class member's claims.
Personal jurisdiction over absent plaintiff class members does not require minimum contacts. Due process is satisfied in a damages class action if absent class members receive the best practicable notice, an opportunity to be heard and participate, an opportunity to opt out, and adequate representation by the named plaintiffs and counsel; they are not required to appear and do not face the same burdens as defendants. By contrast, a forum's choice of substantive law is constrained by the Due Process and Full Faith and Credit Clauses: for a state's law to be selected constitutionally, the state must have a significant contact or significant aggregation of contacts to the claims asserted by each class member, creating state interests, such that application of its law is neither arbitrary nor fundamentally unfair. Efficiency and uniformity alone cannot justify applying forum law to all claims.
Affirmed in part, reversed in part, and remanded. The Court held that Kansas could exercise jurisdiction to bind absent, nonresident class members without requiring minimum contacts, because the notice and opt-out procedures, along with adequate representation, satisfied due process. However, the Court held that Kansas could not automatically apply Kansas substantive law to all class members' claims; doing so violated the Due Process and Full Faith and Credit Clauses absent significant contacts with each claim. The case was remanded for a proper choice-of-law analysis.
Shutts is the leading case on what due process requires to bind absent class members in damages class actions: individual minimum contacts are unnecessary, but robust notice, an opportunity to opt out, and adequate representation are essential. It also cabins forum shopping by prohibiting a state court from applying its own substantive law to a nationwide class without constitutionally sufficient contacts to each claim. For practice, Shutts drives how lawyers craft class notices, structure opt-out rights, brief certification adequacy, and plan choice-of-law strategies, often leading to subclasses or multistate law surveys. For exams, remember the dual holdings: minimal procedural protections for absent plaintiffs suffice for jurisdiction, but choice-of-law requires significant contacts and cannot be justified by efficiency alone.