CAFA Removal & Remand Strategies

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Class Actions:
Removal & Remand Tactics
Jennifer Gray|grayjen@gtlaw.com| 310.586.7730

Title of PresentationGreenberg 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
3

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.”
4

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.
10

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.
11

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.
15

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.
16

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.
17

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.
18

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.
20

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.
21

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.”
22

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
grayjen@gtlaw.com
310.586.7730

CAFA Removal & Remand Strategies

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