CAFA Removal & Remand Strategies

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Class Actions:

Removal & Remand Tactics

Jennifer Gray|[email protected]| 310.586.7730

Tactics

Removal Remand

Title of Presentation Greenberg Traurig, LLP | gtlaw.com

Class Action Removal Under CAFA 28 USC § 1332(d)

• Amount in controversy exceeds $5M

• The number of putative class members exceeds 100

• Minimal diversity exists - one putative class member and one defendant are diverse

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Mass Action Removal Under CAFA 28 U.S.C. § 1332(d)(11)(B)(i)

Permits removal of lawsuits in which “monetary relief claims of 100 or more persons are proposed to be tried jointly on the ground that the plaintiffs’ claims involve common questions of law or fact.”

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Plaintiffs’ Removal Avoidance &

Remand Tactics

Stipulating to Less Than $5M in Controversy


Standard Fire Insurance Company v. Knowles 133 S. Ct. 1345 (March 19, 2013)

• Stipulation could not be considered in assessing CAFA jurisdiction because the plaintiff’s proffered stipulation did not speak for the entire class he purported to represent.

• “Because his precertification stipulation does not bind anyone but himself, Knowles has not reduced the value of the putative class members’ claims.”

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Rodriguez v. AT&T Mobility Services LLC,

728 F.3d 975 (9th Cir. Aug. 27, 2013)

• Prior to Standard Fire, Plaintiff filed a class action in California State Court in which he alleged damages of no more than $5 million and expressly waived recovery beyond $5 million.

• Relying on Lowdermilk v. US Bank, NA, district court granted Rodriguez’ motion to remand based on his waiver of damages. 479 F.3d 994 (9th Cir. 2007).

• The Ninth Circuit reversed the remand in light of the Standard Fire decision – the waiver was ineffective to bind the putative class.

• The 9th Circuit also considered whether the burden of proof for removal had changed.

• Lowdermilk’s heightened standard of proof requiring a defendant to prove amount in controversy to a legal certainty was inconsistent with Standard Fire.

• Standard Fire effectively overruled Lowdermilk.



Seeking Declaratory Judgment

Rather than Monetary Damages


South Florida Wellness, Inc. v. Allstate Ins. Co. __ F.3d __ 2014, WL 576111 (11th Cir. Feb. 14, 2014)

• 11th Circuit found that a request for declaratory judgment could satisfy the amount in controversy requirement.

• The Court would apply the same analysis used in non-class actions -- how much was at issue from the plaintiff’s perspective at the time of removal.

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Addison Automatics, Inc. v. Hartford Cas. Ins. Co. 731 F.3d 740 (7th Cir. October 2013)

• Plaintiff first filed a state court declaratory judgment action as a putative class representative against liability carrier, who subsequently removed the case to federal court under CAFA.

• Upon removal, the plaintiff dismissed the case and filed new DJ action against the liability carrier in an individual capacity.

• The liability carrier removed the action to federal court under CAFA, arguing that even though the plaintiff filed in an individual capacity, it still sought damages on behalf of a class.

• 7th Circuit: Single-plaintiff coverage dispute was removable under CAFA where the underlying claim related to indemnification arising from a class action lawsuit and plaintiff only had standing to sue as a class rep.

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Mississippi ex rel Hood v. AU Optronics Corp. 134 S. Ct. 736 (Jan. 14, 2014)

• Resolving a conflict among the circuits, the Supreme Court held that lawsuits brought by the state on behalf of its citizens do not fall within CAFA’s coverage of mass actions.

• The “100 or more persons” language in CAFA’s mass action provision refers to named plaintiffs only.”

• See also Bauman v. Chase, 2014 WL 983587 (9th Cir. March 6, 2014) (private attorney general suit not subject to CAFA)

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Subdividing Plaintiffs Into Multiple Cases

Subdividing Mass Actions Into Multiple Parallel Cases

• Plaintiffs’ subdivide plaintiffs into parallel cases each with fewer than 100 plaintiffs.

• The fight over removal often boils down to one key question: whether the parallel cases are “proposed to be tried jointly.”


Scimone v. Carnival Corp. 720 F.3d (11th Cir. 2013)

• Passengers sued cruise line. Complaint was amended several times to add in new groups of plaintiffs as they were identified. Eventually, 104 plaintiffs were identified.

• Rather than amend the complaint to add final group, the initial plaintiffs dismissed their complaint and filed two new suits.

• Complaints were identical EXCEPT

• One suit involved plaintiffs A-L; second M-Z.

• Eleventh Circuit affirmed remand:

• The “plain language of CAFA deprived the district court of subject-matter jurisdiction.”

• At no point had the plaintiffs explicitly proposed to try one case with all 104 plaintiffs.

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Romo v. Teva Pharmaceuticals USA 731 F.3d 918, 921 (9th Cir. 2013)

• Product liability claims of more than 1,500 individuals.

• Plaintiffs’ counsel divided plaintiffs into 41 separate lawsuits with no case exceeding 100 plaintiffs.

• Plaintiffs filed a motion to “coordinate the lawsuits for all purposes” pursuant to a CA state law procedure.

• Defendants attempted to remove on the grounds that the petition to coordinate effectively increased the number of plaintiffs above 100.

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Romo v. Teva Pharmaceuticals, cont’d

• On appeal, the key issue was whether the plaintiffs had proposed that their claims be “tried jointly.”

• No, the Court concluded – plaintiffs had not expressly asked for a joint trial.

• 9th Circuit granted rehearing en banc to review Romo.

• Roadmap for plaintiffs to keep mass actions out of federal court.

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Atwell v. Boston Scientific 740 F.3d 1160 (8th Cir. 2013)

• Plaintiffs subdivided mass action into 3 cases

• Plaintiffs moved to consolidate the cases before one judge

• Plaintiffs indicated that they intended to select a bellwether case to try and argued that assignment to a single judge was necessary to avoid “conflicting pretrial rulings.”

• Eighth Circuit reversed the district court’s remand - plaintiff’s conduct demonstrated an intent to have a joint trial on the merits.

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Post-Removal Activity


Visendi v. Bank of America, N.A. 733 F.3d 863 (9th Cir. Oct. 23, 2013)

• Plaintiffs named 137 plaintiffs, each with separate mortgage loans, and 25 lender defendants.

• Defendants removed under CAFA mass action provisions.

• Plaintiffs filed an amended complaint – adding additional plaintiffs and amending claims.

• Defendants moved to dismiss on misjoinder grounds

• District court remanded.

• By asserting misjoinder, the defendants had conceded that the action did not present common issues under Rule 20(a) and therefore did not fall within CAFA’s mass action provision.

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Visendi v. Bank of America, N.A., cont’d

9th Circuit reversed the remand:

• District court erred in ruling that the misjoinder motion affected CAFA jurisdiction.

• “It is irrelevant whether the plaintiffs’ claims ultimately proceed to a joint trial because post filing developments do not defeat jurisdiction that is otherwise properly invoked.”

• The court distinguished this case from the 9th Circuit’s recent Romo decision. Here, all of the plaintiffs were joined in a single state court complaint and, therefore, fell within CAFA jurisdiction.

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State of Louisiana v. American National Property & Casualty 2014 WL 1243825 (5th Cir. March 26, 2014)

• The State of Louisiana sued several insurers, alleging it was the beneficiary of assignments made by the insured in return for help rebuilding after Hurricane Katrina.

• The insurers removed to federal court under CAFA.

• After extensive proceedings, the district courts ultimately severed the actions by individual policy and ordered remand to state court.

• The Fifth Circuit reversed because “at the time of removal, these claims clearly possessed original federal jurisdiction.”

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Take-Aways

• For class actions, the Supreme Court and other courts focus on intent of CAFA to broaden federal jurisdiction.

• For mass actions, courts have strictly construed “proposed to be tried together” language.

• Courts adhere to the principle that plaintiffs are masters of their complaint, allowing plaintiffs to split up related cases solely to defeat CAFA jurisdiction.

• Where a case was subject to CAFA jurisdiction at the time of removal, post-removal activity won’t deprive court of jurisdiction.

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My Contact Info

Jennifer L. Gray Greenberg Traurig [email protected] 310.586.7730

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CAFA Removal & Remand Strategies