The Trial Practice Tips Blog

The Class Action Fairness Act: Two Confusing Rulings About When to Appeal an Order on a Motion to Remand

Following a removal from state to federal court based on the Class Action Fairness Act, the plaintiffs will normally test the removal with a motion to remand. Once the motion to remand is ruled on, CAFA allows the losing party to appeal. But what's the deadline for the appeal? The statute seems to make the answer clear:

[A] court of appeals may accept an appeal from an order of a district court granting or denying a motion to remand a class action to the state court from which it was removed if application is made to the court of appeals not less than 7 days after entry of the order.

According to this language, the losing party must wait at least 7 days to file a notice of appeal. Recently, however, both the 9th and 10th Circuits have interpreted this language to mean exactly the opposite: the notice of appeal must be filed within 7 days.

These confusing rulings create a problem for practitioners. Anyone interested in the problem should read Howard Bashman's detailed analysis in his article, "Less Is More: When Courts Decide a Law Means the Opposite of What It Says," which also contains a link to the two recent court decisions.

Class Actions: Adding New Plaintiffs Does Not Commence a New Lawsuit for Purposes of CAFA

In Phillips v. Ford (consolidated with Boxdorfer v. DaimlerChrysler) (pdf), the Seventh Circuit issued a ruling about the Class Action Fairness Act that should come as no surprise to anyone who has been following the Seventh Circuit's other CAFA rulings.

While the Seventh Circuit has issued other rulings denying a defendant's attempt to remove pre-CAFA state-court class actions to federal court based on events that happened in the case after CAFA was enacted, there has not been a specific ruling on the question  of whether adding new class representatives amounted to the "commencement" of a new case under CAFA.

After Phillips, the answer is no. In Phillips, the Seventh Circuit ruled that amending a state-court class action to add or substitute new plaintiffs does not "commence" a new case under CAFA. If the state-court class action was filed before CAFA was enacted, the addition of the new plaintiffs will not trigger a CAFA-sanctioned removal to federal court.

For other Seventh Circuit CAFA rulings, see the "class action" category of this weblog, as well as the excellent CAFA Law Blog published by McGlinchey Stafford PLLC.

The Illinois Supreme Court on Forum: Was Yesterday's Gridley Decision Really All That Dramatic?

"Supreme Court slams forum shopping," said one headline about yesterday's Gridley decision. But the case really wasn't all that dramatic. The term "forum shopping" doesn't even appear in the opinion.

Gridley began when a plaintiff from Louisiana brought a putative nationwide class action against State Farm in an Illinois state court. Though itself a resident of Illinois, State Farm filed a motion to dismiss based on forum non conveniens. Its motion was denied. In Gridley, the Illinois Supreme Court ruled that the denial was in error: because most of the events occurred in Louisiana, Louisiana was a more convenient forum for the action. Even if State Farm's principal place of business was in Illinois, that was only "one factor to be considered" in the forum non conveniens analysis.

In ruling against the plaintiff, the Supreme Court said it was unimportant whether the class, if certified, might include Illinois residents. Prior to a ruling on class certification, the residence of unnamed class members is irrelevant to the forum non conveniens issue. While the Gridley decision will come in handy for defendants facing an Illinois class action by an out-of-state plaintiff, such cases are rare. Based on my own experience, it is almost always true that at least one of the named plaintiffs resides in the forum county. That's why I don't think the Gridley decision is as dramatic as some newspapers want you to believe.

A New Weblog about the Class Action Fairness Act

Written by lawyers at McGlinchey Stafford, CAFA Law Blog promises "information, cases, and insights regarding the Class Action Fairness Act of 2005."

Already, it's a great resource. If the authors continue do their jobs right, it's where you'll see all the new CAFA cases first.

A New Class-Action Resource for Defense Lawyers

The following announcement appeared today at the weblog Point of Law--

The Civil Justice Reform Group and the Institute for Legal Reform have jointly launched a resource center with educational materials on the new federal class action law. The target audience is defense lawyers, but many of the materials are likely to be of interest to others as well.

The new site features "practice documents" and a "practice library."

Meanwhile, at this website, I've tried to keep up with the case law interpreting the new Class Action Fairness Act in posts I've collected in the "class action" category. Anyone who has information about new cases is always welcome to email me.

A Long-Awaited Illinois Supreme Court Ruling

I have a post about today's ruling in Avery v. State Farm at Legal Underground. If you want to skip the background, the court's summary of its decision in Avery v. State Farm sums it up well: "All of the awards made by the circuit court now stand reversed."

Yet Another 7th Circuit Ruling on the Class Action Fairness Act

At Legal Underground, I posted today about Judge Easterbrook's decision in Schorsch v. Hewlett-Packard.

Judge Posner on Gamesmanship and the Class Action Fairness Act

At Legal Underground, I posted today about Judge Posner's decision in Pfizer v. Lott.

Evaluation of Potential Class Actions: Is There a Way to Settle the Case?

Although many factors go into the evaluation of a potential class action from the plaintiffs' perspective, here is an important one: If the case is viable, you will have a good idea at the beginning of a case how you'll be able to fashion a settlement at the end.

Some potential class actions are just not possible to settle. Perhaps the cost to administer the settlement would greatly exceed the benefits to the class. Maybe the defendant, if it agreed to settle, would have to cease doing business. Or perhaps the case is so unusual that it does not lend itself to one of the common settlement models.

Wise class-action lawyers do not embark on new litigation without a clear strategy for the end game. Not only is it the best way to proceed from a business perspective, it's also good lawyering. After all, if problems with the case create too many barriers to settlement, your opponent will argue at the class-certification stage that the case is unmanageable as a class action. If the problems really exist, he's likely to prevail.

What Post-Filing Changes Make a Case Removable Under the Class Action Fairness Act?

There's been a lot of talk among class-action lawyers about what post-filing actions might make a state-court class action removable under the Class Action Fairness Act (CAFA). By its terms, CAFA applies only to cases "commenced" after the law was enacted, or February 18, 2005. But what if the plaintiff amends a complaint to add a new class representative? What if the plaintiff amends a complaint to add new allegations about an existing legal theory or amends to add a new defendant? What if the plaintiff changes the class definition? Do any of these actions commence a new case for CAFA purposes?

In Knudsen v. Liberty Mutual Insurance Company, No. 05-C-1489 (6/7/05), the Seventh Circuit ruled on at least one of these questions: a change to the class definition, even if substantial, does not "commence" a new case under CAFA. In Knudsen, the plaintiffs expanded the class definition to include customers of a new corporate entity that was not a party to the suit. In his opinion, Judge Easterbrook implied that the new class definition might be flawed for other reasons, but it did not make the case removeable under CAFA:

[A] new development in a pending suit no more commences a new suit than does its removal. Plaintiffs routinely amend their complaints, and proposed class definitions, without any suggestions that they have restarted the suit--for a restart (like a genuinely new claim) would enable the defendant to assert the statute of limitations . . . [A] plaintiff may assert an entirely novel legal theory in mid-suit without creating a "new" claim in the sense that the defendant could block it by asserting that it had been propounded after the period of limitations expired.

In this passage and others, Judge Easterbrook implies what post-filing changes might make a case removable under CAFA: an entirely new claim for relief, a new defendant, "or any other step sufficiently distinct that courts would treat it as independent for limitations purposes." Easterbrook suggests that a body of CAFA law might develop that will be modeled after Rule 15(c), which determines when a claim "relates back" to the original lawsuit on the one hand or when it creates "fresh litigation" on the other. While fresh litigation might allow removal under CAFA, merely changing the class definition does not.

Meanwhile, there have been at least two other cases dealing with  removal under CAFA of pre-CAFA lawsuits: Pritchett v. Office Depo Inc., discussed in a newsletter by Nixon Peabody (pdf); and Lander and Berkowitz, P.C. v. Transfirst Health Services, Inc., discussed in my post "The Schoolhouse Rock Precedent." For general information about the Class Action Fairness Act, see my post titled, "Thinking Out Loud About the Federal Class-Action Bill."