Category Archives CAFA

This putative class rep really did not want to be in federal court. First, he attempted to avoid CAFA removal by stipulating that the putative class would seek less than $5 million.  Defendants filed a notice of removal, and ultimately prevailed (which we wrote about here). Months later, the Supreme Court unanimously held that such stipulations cannot bind putative class members and therefore cannot be used to defeat CAFA jurisdiction (which we discussed here).  Standard Fire Ins. Co. v. Knowles, 133 S.Ct. 1345, 1348 (2013). Not wanting to be stuck in federal court, plaintiff got creative and cited Knowles as the basis for a motion to voluntarily dismiss his case and re-file in state court, arguing that "the reason for this dismissal is to re-file in state court a petition that complies with the dictates of Standard Fire and Casualty Company v. Knowles, which is not to rely on a…

We all know that defendants have the burden of establishing CAFA jurisdiction - i.e. minimal diversity, an amount-in-controversy exceeding $5 million, and at least 100 class members.  And we also know that the complaint, affidavits, declarations, discovery responses, or "other paper" may be used as evidence. But what about discovery responses filed in another case?  May a defendant use a plaintiff's discovery responses from a similar case to demonstrate more than $5 million is in controversy in the case at hand? No, at least where the discovery responses involve a different defendant and only one of two named plaintiffs. In three separate Missouri class actions, Mr. Dalton sued Walgreens, Staples and Target, alleging statutory and common-law claims based on defendants' practice of placing tracking files on plaintiffs' computers and harvesting information about their web-browsing, without being detected, for the purpose of tracking consumers' internet history and activities. In the cases…

Judge Gaitan, Chief Judge of the U.S. District Court for the Western District, recently issued an order answering what appears to be an issue of first impression for 8th Circuit courts: does a federal district court retain jurisdiction to rule on a motion for reconsideration on an order to remand made under CAFA?  In Wingo v. State Farm Fire and Casualty Co., No. 13-3097, 2013 WL 3872199 (W.D. Mo. July 25, 2013), Judge Gaitan answered the question in the affirmative, continuing the broad interpretation in favor of federal jurisdiction for class actions under CAFA. Although Judge Gaitan noted the dearth of case law on the issue, he noted that the "Seventh Circuit has treated reconsideration by district courts in a CAFA case as a proper exercise of jurisdiction" and found such authority to be persuasive in the absence of any contrary authority. Id. at *2, citing Natale v. General Motors, No. 06–8011, 2006 WL…

What happens when the hunter becomes the hunted? In General Credit Acceptance Corp. v. Deaver, 2013 WL 2420392 (E.D. Mo., June 3, 2013), the hunter remains in state court unless he realigns the parties prior to removal. In that case, GCAC filed a simple one-count petition for breach of a retail installment contract in St. Louis County, and got hit with a counterclaim seeking to certify a consumer class action under the UCC. GCAC promptly tried to get its head out of the bear trap by dismissing its breach of contract claim and removing the case to the Eastern District, using the class action counterclaim as a hook to assert removal jurisdiction under CAFA. While it is well-settled that a plaintiff may not remove a case to federal court based on a counterclaim, GCAC argued that it was only a nominal plaintiff and in reality a de facto defendant, having…

To remove a case under CAFA, we all know that a defendant must establish that the amount in controversy exceeds $5 million exclusive of interest and costs (plus there must be minimal diversity and at least 100 putative class members). What are some other tips for preparing the notice of removal under CAFA in the District of Kansas? Develop the necessary jurisdictional facts.  There are several methods for developing the factual allegations to include in the notice of removal, including: by contentions, interrogatories, or admissions obtained in state court prior to removal by calculation from the allegations in plaintiff's complaint by reference to plaintiff's informal estimates or settlement demands by introducing affidavits about how much it would cost to satisfy plaintiff's demands See Frederick v. Hartford Underwriters Ins. Co., 683 F. 3d 1242, 1247 (10th Cir. 2012). Put them in the notice of removal. The District of Kansas recently held that…

Judge Limbaugh's analysis in City of O'Fallon v. Centurylink, Inc., 2013 WL 1036514 (E.D. Mo., March 14, 2013), is interesting in two respects. First, it's interesting because the Court did not simply decline to exercise its jurisdiction as Judge Fleissig did in City of Maryland Heights v. Trafcone Wireless, Inc., 2013 WL 791866 (E.D. Mo., March 4, 2013), a similar class action composed of plaintiff municipalities seeking to recover business license taxes from defendant providers of telephone services. It's also interesting for its thorough discussion of what exactly constitutes a "significant defendant" for purposes of applying CAFA's Local Controversy Exception. This analysis was a bit of overkill because the Court had already determined that the removing defendants had failed to meet their burden of establishing both the requisite amount in controversy (defendants had pleaded only $4.2 million in controversy in their Notice of Removal and had inexplicably ignored attorneys' fees…

When we first discussed Standard Fire Insurance Co. v. Knowles, No. 11-1450, 568 U.S. -- (Mar. 19, 2013), we noted that a ruling in favor of Defendants could mean an end to the traditional rule that a plaintiff is the “Master” of his or her own complaint, by foisting upon a party imputed damages that may have not been alleged in the case for strategic reasons.   And while the Court recognized that an individual plaintiff may avoid litigating in federal court by stipulating to an amount in controversy below the federal jurisdiction requirement, the Court unanimously held  that the same is not true for a plaintiff seeking to represent a proposed class: "Our reason is a simple one: Stipulations must be binding…. [a] plaintiff who files a proposed class action, cannot legally bind members of the proposed class before the class is certified." Slip op. at 4.   Even though this…

Being a fan of Les Miz, I was pleasantly surprised by Sacha Baron Cohen's performance of the great musical number "Master of the House" in the recent film adaptation.  It's probably my second favorite version after Lawrence Tierney's memorable rendition in the classic Seinfeld episode "The Jacket."  Now, the Supreme Court will soon decide which party, for purposes of removal will be considered the Master of the House, or rather the Complaint, for purposes of CAFA removal. In Standard Fire Insurance Co. v. Knowles, the Court will hear its first case under the  Class Action Fairness Act ("CAFA"), the 2005 statute which conferred original federal jurisdiction to any class action where minimal diversity existed at the amount-in-controversy exceeds $5 million.  At issue in Knowles is whether the named plaintiff, as a putative class representative, can stave off a defendant's right to remove under CAFA by filing any accompanying “stipulation” that…

In City of Maryland Heights v. Trafcone Wireless, Inc., 2013 WL 791866 (E.D. Mo., March 4, 2013), Judge Fleissig declined to exercise CAFA jurisdiction over a case in which a putative class of Missouri municipalities sought declaratory and injunctive relief against a telephone service provider based on its alleged failure to pay certain business licensing taxes. Without reaching the issue of whether the requirements of CAFA removal had been met, the District Court relied on principles of federalism and comity identified in Levin v. Commerce Energy, Inc., 130 S. Ct. 2323, 2331 (2010), to decline to exercise jurisdiction. In Levin, the United States Supreme Court had resolved a circuit split to determine that principles of federalism and comity required federal abstention in certain tax cases beyond the Tax Injunction Act, 28 U.S.C. Section 1341, which prohibits federal courts from issuing injunctions that would enjoin or suspend state taxes, or entertaining…

It appears not, at least not in the Western District of Missouri (or really anywhere else).  In Resurgent Capital Services v. Thomason, 2012 WL 5398189 (Nov. 5, 2012, W.D. Mo), the plaintiff in a debt collection case attempted exactly that when the defendant counterclaimed with a request to certify a class under the Fair Debt Collection Act.  Judge Smith remanded the case after an efficient analysis, relying on the plain language of CAFA itself (28 U.S.C. § 1441(a)) that limits removal to “any defendant” and finding nothing in CAFA’s legislative history indicating Congress had intended to alter the traditional rule that a counterclaim defendant may not remove a case to federal court.  As Judge Smith noted, his conclusion was consistent with those of other federal courts addressing the same issue.  So if you want to be in federal court, don’t wait for the counterclaim, even under CAFA.

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