Presenting a live 90-minute webinar with interactive Q&A CAFA Removal and Remand: Key Developments for Plaintiff and Defense Counsel Lessons from Recent Cases on Amount-in-Controversy, State AG Suits, Joint Trials and More TUESDAY, FEBRUARY 24, 2015 1pm Eastern | 12pm Central | 11am Mountain | 10am Pacific Today’s faculty features: Jeffrey A. Holmstrand, Senior Counsel, Flaherty Sensabaugh Bonasso , Wheeling, W.Va. Allan Kanner , Founder, Kanner and Whiteley , New Orleans Jessica D. Miller, Partner, Skadden Arps Slate Meagher & Flom , Washington, D.C. The audio portion of the conference may be accessed via the telephone or by using your computer's speakers. Please refer to the instructions emailed to registrants for additional information. If you have any questions, please contact Customer Service at 1-800-926-7926 ext. 10 .
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CAFA REMOVAL AND REMAND KEY DEVELOPMENTS FOR PLAINTIFF AND DEFENSE COUNSEL STRAFFORD WEBINARS T U E S D A Y , F E B R U A R Y 2 4 , 2 0 1 5
OVERVIEW • The importance of CAFA jurisdiction • Recent Supreme Court decisions • Caselaw trends on CAFA exceptions • Caselaw trends on mass actions • State AG cases and removal under CAFA • Recent developments on amount in controversy • Retention of jurisdiction if class certification is denied • Defense practice points • Plaintiffs’ practice points 6
THE IMPORTANCE OF CAFA JURISDICTION • CAFA allows removal of interstate class actions to federal court • Class actions are bet-the-company proceedings that often result in settlement if the action is certified • CAFA was enacted in 2005 and so the case law on the law is relatively new and fast developing • CAFA remand decisions are appealable • 28 U.S.C. § 1453(c)(1) 7
FEDERALISM AND LIMITED JURISDICTION OF FEDERAL COURTS (PLAINTIFFS’ PERSPECTIVE) • Basic premise of judicial separation of powers -- the jurisdiction of the federal courts is limited. • E.g. , Exxon Mobil Corp. v. Allopattah Servs., Inc., 545 U.S. 546, 552 (2005). • CAFA, enacted in 2005, expanded statutory federal jurisdiction, but constitutional requirements of federal subject-matter jurisdiction – diversity or federal-question – must be met. • CAFA did not expand federal jurisdiction at the expense of state sovereignty. 8
FEDERALISM AND LIMITED JURISDICTION OF FEDERAL COURTS (PLAINTIFFS’ PERSPECTIVE) • CAFA did not expand federal jurisdiction at the expense of state sovereignty. • E.g. , Attorney General, parens patriae litigation. • Mississippi ex rel. Hood v. AU Optronics Corp. , 134 S. Ct. 736 (2014) • Hawaii ex rel. Louie v. HSBC Bank Nevada, N.A., 761 F.3d 1027 (9th Cir. 2014) (collecting cases) • Because removal of an action from state court to federal court “deprives a state court of an action properly before it, removal raises significant federal concerns.” • Gasch v. Hartford Accident & Indem. Co., 491 F.3d 278, 281 (5th Cir. 2007). 9
FEDERALISM AND LIMITED JURISDICTION OF FEDERAL COURTS (PLAINTIFFS’ PERSPECTIVE) • These federalism concerns are particularly acute when the removed action has been filed by the State in the State court. • See Franchise Tax Bd. v. Constr. Laborers Vacation Trust, 463 U.S. 1, 22 n.22 (1983) (observing that “considerations of comity make us reluctant to snatch cases which a State has brought from the courts of that State, unless some clear rule demands it.” ). • The removal statute is “strictly construed, and any doubt about the propriety of removal must be resolved in favor of remand .” • Id . at 281-82 (emphasis added). 10
CAFA CHANGED TRADITIONAL FEDERALISM NORMS(DEFENSE PERSPECTIVE) • Traditional federalism arguments do not apply because Congress intended to greatly expand federal jurisdiction over class actions of national importance • In cases where “a Federal court is uncertain . . . the court should err in favor of exercising jurisdiction over the case.” 151 Cong. Rec. 7326 • (statement of Rep. Jim Sensenbrenner, an architect of CAFA) 11
CAFA CHANGED TRADITIONAL FEDERALISM NORMS (DEFENSE PERSPECTIVE) • CAFA “constitute[s] the most sweeping changes to class- action practice in a generation, rendering obsolete many preexisting standards and practices .” • “This landmark tort reform legislation . . . ‘ federalizes ’ most interstate class actions now in the state courts .” • “ CAFA's text, purposes, and legislative history create a presumption in favor of finding that minimal-diversity jurisdiction exists, with the burden of proof assigned to the party opposing jurisdiction .” • Hunter Twiford, III, et al., CAFA’s New ‘Minimal Diversity’ Standard for Interstate Class Actions Creates a Presumption that Jurisdiction Exists, with the Burden of Proof Assigned to the Party Opposing Jurisdiction , 25 Miss. C. L. Rev. 7, 53 (2005) 12
RECENT SUPREME COURT DECISIONS DART CHEROKEE • Supreme Court Rejects Presumption Against Removal • In Dart Cherokee Basin Operating Co. v. Owens , 135 S. Ct. 547 (Dec. 15, 2014), the Supreme Court rejected a presumption against removal in CAFA cases and held that evidence is not required to support removal • The removal statute only requires a “short and plain statement of the grounds for removal . . . By design,” this language “tracks the general pleading requirement stated in Rule 8(a) of the Federal Rules of Civil Procedure” 13
RECENT SUPREME COURT DECISIONS DART CHEROKEE • Suffices to present evidence in opposition to a motion to remand • “Both sides submit proof and the court decides, by a preponderance of the evidence, whether the amount-in- controversy has been satisfied.” Id. at 554. • The Court’s ruling will likely spur more removals of class actions to federal court • Lower courts are beginning to apply Dart , with varying approaches 14
RECENT SUPREME COURT DECISIONS DART CHEROKEE • One federal court recently interpreted Dart as foreclosing remand where a plaintiff failed to rebut defendant’s evidence with her own independent evidence • Roa v. TS Staffing Servs. , 2015 U.S. Dist. LEXIS 7442, at *4-5 (C.D. Cal. Jan. 22, 2015) (“[P]laintiff . . . contests [defendant’s] evidence in support” of removal. “If [defendant] was not required to submit evidence in support of its allegations, as Dart Cherokee teaches, then [plaintiff’s] attack on the evidence is fallacious. Furthermore, [plaintiff] submitted no independent evidence for the Court to consider.”) 15
RECENT SUPREME COURT DECISIONS DART CHEROKEE • But the Eleventh Circuit has suggested that Dart does not require a plaintiff to contest a defendant’s evidence with her own independent evidence • Dudley v. Eli Lilly & Co. , 2014 WL 7360016 (11th Cir. Dec. 29, 2014) (affirming remand in employment action where defendant submitted evidence, but plaintiff did not come forward with independent evidence of her own; “Lilly could have provided the district court with more information about the amount of compensation that was allegedly denied the class members[.]”). 16
RECENT SUPREME COURT DECISIONS DART CHEROKEE (PLAINTIFFS’ PERSPECTIVE) • However, facial plausibility is an issue as well as having evidence to back up factual allegations. • Only surprise with Dart - one can imagine greater scrutiny of pleadings when the issue is not the sufficiency of the pleadings (as under Rule 8(a)), but establishing the satisfaction of the requirements of federal jurisdiction, which are constitutionally constrained. 17
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