Can it be that easy? Can hundreds of plaintiffs avoid removal of their state actions to federal court simply by dividing their identical claims into two or more complaints with fewer than 100 plaintiffs on each complaint? So far, two federal circuit courts of appeals– the Seventh Circuit and the Ninth Circuit - have answered “yes,” reasoning that this is precisely what the Class Action Fairness Act of 2005 (“CAFA”) permits in the provisions which circumscribe the removal of state mass actions. Pointing to the Congressional purposes for enacting CAFA, corporate defendants argue that the answer must be “no”. The U.S. Supreme Court remains silent on this issue, having recently denied Certiorari review of the Bristol-Myers Squibb Co., et al. v. Anglin case (S.Ct. No. 12-147), which originated out of the Seventh Circuit. In Bristol-Myers, the defendant company was facing the claims of 546 plaintiffs involving the same drug in Illinois, as well as the claims of 1,326 plaintiffs involving the drug in California. The 546 plaintiffs in Illinois court (who were from 46 different states) were divided into 8 separate, but essentially identical, complaints. The 1,326 plaintiffs in California court were divided into 17 separate complaints. Each of the Illinois and California complaints included fewer than 100 plaintiffs. The majority, if not all, of the complaints were filed by the same attorneys. Are these the types of cases that CAFA intends to be removable to federal court or are they precisely the types of cases meant to stay at the state court level?
Bristol-Myers points to two purposes of CAFA, which suggest that removal of these cases is appropriate: (1) CAFA was passed to address lawyers who “'game' the procedure rules and keep nationwide or multi-state class actions in state courts," and (2) Congress wanted to ensure that "[g]enerally speaking, lawsuits that resemble a purported class action should be considered class actions for the purpose of applying these provisions." (See Cert. Petition, at *7) (citing S. Rep. No. 109-14, at 4, 35 (2005), reprinted in 2005 U.S.C.C.A.N. 3, 5, 34.) Looking at the barrage of cases facing Bristol-Myers, is this not a situation that CAFA was intended to address? The problem for corporate defendants in Bristol-Myers’ position, however, lies in the text of CAFA itself.
Under CAFA, a mass action is "any civil action . . . 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." 28 U.S.C. § 1332(d)(ll)(B). However, "the term 'mass action' shall not include any civil action in which . . . the claims are joined upon motion of a defendant." Id. § 1332(d)(ll)(B)(ii)(II) (Emphasis added). Based upon this CAFA provision, the Seventh and Ninth Circuits have created the following paradigm:
- If 100 or more plaintiffs combine their claims into one complaint, the joinder in one complaint constitutes an implicit proposal by the plaintiffs to try the claims jointly. Thus, the case is a mass action under CAFA, and removable to federal court. See Bullard v. Burlington N. Santa Fe Ry. Co., 535 F.3d 759, 762 (7th Cir. 2008).
- If 100 or more plaintiffs have similar or identical claims but split the claims into multiple complaints so that no individual complaint contains the claims of 100 plaintiffs, there is no implicit proposal by the plaintiffs to jointly try the claims presented in the multiple complaints. This is so, even if the complaints are almost word-for-word identical, may rely upon the same evidence, and all plaintiffs have the same counsel. Thus, the cases cannot be combined by the defendant and removed to federal court under CAFA as a mass action. See Anderson v. Bayer Corp., 610 F.3d 390 (7th Cir. 2010); Tanoh v. Dow Chem. Co., 561 F.3d 945 (9th Cir.), cert. denied, 130 S. Ct. 187 (2009).
How can this be the outcome? Both Circuit Courts hail the plaintiffs as the masters of their complaints in explaining:
By excluding cases in which the claims were consolidated on a defendant's motion, Congress appears to have contemplated that some cases which could have been brought as a mass action would, because of the way in which the plaintiffs chose to structure their claims, remain outside of CAFA's grant of jurisdiction. This is not necessarily anomalous; after all, the general rule in a diversity case is that 'plaintiffs as masters of the complaint may include (or omit) claims or parties in order to determine the forum.'
Anderson, 610 F.3d at 393 (citation omitted); Tanoh, 561 F.3d at 953 (same). The Seventh Circuit suggested that if plaintiffs later propose to try the cases jointly or propose a procedure to dispose of multiple cases based upon the trial of only a few (such as using issue or claim preclusion), then removal may be appropriate. Anderson, 610 F.3d at 394.
Bristol-Myers to the Supreme Court: “With respect, it does not honor the broad remedial goals of CAFA to refuse federal jurisdiction simply because plaintiffs' counsel divided their clients' claims into multiple, word-for-word, identical lawsuits…. Congress surely did not intend to have the existence of removal jurisdiction turn on nothing more than the word-processing skills necessary to divide one complaint into two or three.” (Cert. Petition, at *10-11). Still, the Supreme Court will not hear the Bristol-Myers case. The absence of an express Circuit Court split on this issue is likely the driving force behind the Supreme Court’s denial of Certiorari review in Bristol-Myers. The Court also refused to review the Ninth Circuit’s decision on the issue in Tanoh in 2009.
The Bristol-Myers and Knowles cases serve as great examples of the tensions underlying CAFA. Both cases came from state county courts that apparently have reputations in the class action arena. In Knowles, the defendant insurance company pointed out that prior to the enactment of CAFA, plaintiffs’ counsel would obtain orders from the state court deferring briefing on all dispositive motions until after discovery was complete and class certification was decided, followed by permission from the court to pursue expensive and burdensome discovery. The Knowles defendant argued that compliance with the expensive discovery was ordered prior to briefing on certification as a method of forcing nationwide settlements in cases in which classes would not have been certified by federal courts and which yielded large attorneys fee awards. (See Knowles Cert. Petition, at *5-6). The Bristol-Myers defendant argued in its Cert. Petition that plaintiffs were clearly seeking to center a nation-wide mass tort suit in state court in a county that is so well-known as a venue for class actions and mass tort action litigation that Congress identified the county as a “magnet” for large, interstate class actions in CAFA. (See Bristol-Myers Cert. Petition, at *12-13) (citing S. Rep. No. 109-14 at 13-14 (2005), reprinted in 2005 U.S.C.C.A.N. 3, 14).
But, will the fact that these attempts to circumvent CAFA removal jurisdiction came primarily from these state county courts influence the answer to the questions raised by these cases? Indeed, CAFA was passed to address Congressional concerns about important interstate class actions being decided in state courts and class-action abuse in the state courts. So does CAFA, in fact, strip the master of the complaint of his title or simply draw the line around which he can easily maneuver to control the forum in which his case is heard? And by requiring plaintiffs to maneuver around that line to keep their cases in state court, are the concerns underlying the enactment of CAFA actually being served?
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