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The Class Action Fairness Act of 2005 ('CAFA') expanded federal jurisdiction over putative class actions. Under CAFA, the federal diversity jurisdiction statute, 28 U.S.C. '1332, was amended to allow for both original and removal jurisdiction over putative class actions where: 1) the putative class action consists of at least 100 proposed class members; 2) the citizenship of at least one proposed class member is different from that of any defendant ('minimal diversity'); and 3) the matter in controversy, after aggregating the claims of the proposed class members, exceeds $5 million, exclusive of interest and costs. See generally P.L. 109-2 '4(a), codified at 28 U.S.C. '1332(d). This expanded federal diversity jurisdiction is subject to certain exceptions, including the 'local controversy' and 'home-state controversy' exceptions, where, inter alia, a certain percentage of putative class members and the 'primary defendants,' or defendants from whom 'significant relief is sought,' are citizens of the forum state. See 28 U.S.C. '1332(d)(3) and (4).
Notwithstanding its title, CAFA's reach is not limited to 'class actions.' CAFA's expanded federal jurisdiction also embodies a category of cases referred to in CAFA as 'mass actions,' namely, 'civil actions 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)(11)(B)(i). As explained in CAFA's legislative history:
The Committee finds that mass actions are simply class actions in disguise. They involve a lot of people who want their claims adjudicated together and they often result in the same abuses as class actions. In fact, sometimes the abuses are even worse because the lawyers seek to join claims that have little to do with each other and confuse a jury into awarding millions of dollars to individuals who have suffered no real injury. S. Report No. 109-14, at 47 (2005).
In addition, some states have not adopted general class action procedures (e.g., Mississippi) and some states have not permitted class action procedures to be utilized for certain types of actions, such as consumer fraud actions (e.g., Alabama and South Carolina). Thus, by including 'mass actions' under its rubric, CAFA provided defendants with a means to remove (previously unremovable) state court actions involving a large number of plaintiffs, even if the action is not pled as a class action.
CAFA's 'mass action' provisions, however, do not apply to actions where the claims: 1) 'arise from an event or occurrence in the State in which the action was filed, and that allegedly resulted in injuries in that State or in States contiguous to that State' (e.g., oil spills); 2) 'are joined upon motion of a defendant'; 3) 'are asserted on behalf of the general public (and not on behalf of individual claimants or members of a purported class) pursuant to a State statute specifically authorizing such action'; or 4) 'have been consolidated or coordinated solely for pretrial proceedings.' 28 U.S.C. '1332(d)(11)(B)(ii).
Removable 'Mass Actions' Under CAFA
As with traditional class actions under CAFA, a 'mass action' is removable to federal court where: 1) there is minimal diversity; and 2) the matter in controversy, after aggregating the claims of the plaintiffs, exceeds $5 million, exclusive of interest and costs. In a significant departure from CAFA's treatment of a putative class action, however, a federal court may only exercise jurisdiction over those plaintiffs in a 'mass action' whose individual claims exceed $75,000, exclusive of interest and costs. See 28 U.S.C. '1332(d)(11)(B)(i) (federal jurisdiction exists over 'those plaintiffs whose claims in a mass action satisfy the jurisdictional amount requirements under subsection (a) [28 U.S.C. '1332(a)]' ' which is currently $75,000, exclusive of interest and costs).
The Confusion over 'Mass Actions'
Although seemingly straightforward, CAFA's 'mass action' provisions are regrettably less than a model of clarity. In one of the few reported decisions that has addressed the 'mass action' provisions, the Ninth Circuit Court of Appeals described those provisions as 'bewildering,' 'clumsy,' and a source of 'confusion.' Abrego Abrego v. The Dow Chemical Co., 443 F.3d 676, 681, 686 (9th Cir. 2006). As more fully set forth below, the Ninth Circuit's appellations are most apt, as the 'mass action' provisions leave practitioners (on both sides of the 'v.') bewildered and confused.
1) 'Mass Actions' No Longer Meeting the Numerosity or Aggregate Amount in Controversy Requirements
As set forth above, a federal court may only exercise jurisdiction in a 'mass action' ' filed by at least 100 plaintiffs with a total amount in controversy in excess of $5 million ' over those plaintiffs whose individual claims exceed $75,000. In a 'mass action' removed to federal court where certain plaintiffs' individual claims do not exceed $75,000, CAFA does not address the situation where remand of those plaintiffs reduces the number of plaintiffs remaining in the original action below the 100 plaintiff or $5 million aggregate amount-in-controversy thresholds. Must the entire action be remanded, or may the federal court retain jurisdiction over the balance of the action?
In Abrego, supra, the court addressed, but did not resolve, this very question. In that case, the removing defendant argued that remand of those 'mass action' plaintiffs not seeking in excess of $75,000 should not deprive the federal court of jurisdiction over the remaining plaintiffs, even if those remaining plaintiffs' claims no longer met the numerosity and aggregate amount in controversy requirements for a CAFA 'mass action.' The defendant relied on CAFA's legislative history stating:
Subsequent remands of individual claims not meeting the Section 1332 jurisdictional amount re-quirement may take the action below the 100-plaintiff jurisdictional threshold or the $5 million aggregated jurisdictional amount requirement. However, so long as the mass action met the various jurisdictional requirements at the time of removal, it is the Committee's view that those subsequent remands should not extinguish federal diversity jurisdictional [sic] over the action. 443 F.3d at 686, quoting S. Rep. 109-14, at 47.
Indeed, such a result would be consistent with the well-established rule that the propriety of removal must be based on the pleadings 'as of the time of removal' (and not subsequent post-removal developments).
Plaintiffs in Abrego argued that a plain reading of CAFA's 'mass action' provisions required the opposite result, mandating remand of the entire action once the numerosity or aggregate amount in controversy requirement is no longer satisfied. CAFA provides that 'jurisdiction shall exist only over those plaintiffs whose claims in a mass action satisfy the [in excess of $75,000] jurisdictional amount.' As the Ninth Circuit explained, '[o]n this view, the jurisdictional limitation to plaintiffs asserting claims in excess of $75,000 is applicable at the time of removal and to the action as a whole. Both original and removal jurisdiction, then would depend on establishing [Section] 1332(a) jurisdiction over each plaintiff's claims, as well as on meeting the 'mass action' requirements with regard to the plaintiff over whom there is original jurisdiction.' 443 F.3d at 687 (emphasis in original). (The Ninth Circuit in Abrego avoided resolution of this issue by holding that the removing defendant bears the burden to prove federal jurisdiction. Because defendant in that case could not prove that even a single plaintiff sought more than $75,000, the court affirmed the district court's remand of the entire action.)
It remains to be seen how courts will resolve this issue.
2) Severed Plaintiffs
As set forth above, to qualify as a 'mass action,' the action must involve 100 or more plaintiffs proposed to be tried jointly. Where a 'mass action' is removed to federal court and the federal court later severs the claims of the plaintiffs on the ground that joinder of those plaintiffs in a single action was not proper, and the
number of plaintiffs in each of the severed actions falls below 100, may a federal court retain jurisdiction over the actions?
A removing defendant (the proponent of federal jurisdiction) will likely argue that severance by a court does not abrogate federal jurisdiction over the original 'mass action' plaintiffs because, under CAFA, a 'mass action' is one 'in which monetary relief claims of 100 or more persons are proposed to be tried jointly' (emphasis added), but not that the court must ultimately hold that such joinder was proper. The defendant might also rely on the rule set forth in Paragraph 1, supra, that the propriety of removal must be based on the time of removal, at which time the claims of 100 or more plaintiffs were proposed to be joined together. In response, plaintiffs might argue that remand of each action is proper because there is no longer a single action in which the claims of 100 or more plaintiffs are proposed to be joined together.
These are the arguments that courts will need to consider where this issue is presented.
3) Supplemental Jurisdiction
Subsequent to CAFA's passage, the U.S. Supreme Court held (in a case not arising under CAFA) that under the Supplemental Jurisdiction statute (28 U.S.C. '1367), a court may exercise federal diversity jurisdiction over all plaintiffs in an action where at least one plaintiff seeks in excess of $75,000, even if the other plaintiffs do not seek in excess of this jurisdictional minimum. Exxon v. Allapattah Servs. Inc., __ U.S. __, 125 S. Ct. 2611 (2005).
In light of this Supreme Court decision, a removing defendant might argue that, notwithstanding the plain language of CAFA, even if not all plaintiffs in a 'mass action' individually seek in excess of $75,000, the Supplemental Jurisdiction statute provides a basis for jurisdiction over all plaintiffs in a 'mass action,' provided that at least one plaintiff seeks in excess of that amount. CAFA's legislative history expressly states that the 'mass action' provision: 'is in no way intended to abrogate 28 U.S.C. '1367 or to narrow current jurisdictional rules in any way. Thus, if a federal court believed it to be appropriate, the court could apply supplemental jurisdiction in the mass action context as well.' S. Report 109-14, at 48.
A plaintiff is likely to argue that applying the Supplemental Jurisdiction statute to support federal jurisdiction over 'mass action' plaintiffs who do not seek in excess of $75,000 would eviscerate CAFA's express provision limiting a federal court's jurisdiction to 'only … those plaintiffs whose claims in a mass action satisfy the jurisdictional amount requirement of [in excess of $75,000].' Thus, plaintiffs will argue that the legislative history regarding '1367 supplemental jurisdiction should be ignored in the face of CAFA's express language.
Although not addressing Exxon or '1367, a federal court recently expressed its approval (in dicta) of the latter approach. Lowery v. Honeywell International, Inc., 2006 WL 3234197 (N.D. Ala. Oct. 12, 2006). In granting remand, the court stated that a removing defendant must establish that each of the 419 plaintiffs sought more than $75,000 because the 'mass action' statute 'does not say that jurisdiction shall exist over all plaintiffs in a mass action if at least one of them satisfies the jurisdictional amount requirements.' Id. at *9 (emphasis in original). (The court, however, did not need to reach the issue because it concluded that the removing defendant, who was added to the action after CAFA's enactment, had not satisfied its burden that even a single named plaintiff sought in excess of $75,000.)
4) 'Mass Actions': For Removals Only?
CAFA's expansion of federal jurisdiction over traditional class actions applies equally to actions originally filed in federal court and to actions removed to federal court. See 28 U.S.C. '1332(d)(2) ('The district courts shall have original jurisdiction … ') (emphasis added); 28 U.S.C. '1453 (providing for removal of actions satisfying CAFA's requirements). As noted by the court in Abrego, CAFA's 'mass action' provisions oddly state that 'a mass action shall be deemed to be a class action removable under paragraphs (2) through (10) [of 28 U.S.C. '1332(d)] if it otherwise meets the provisions of those paragraphs,' language which appears to limit federal diversity jurisdiction over mass actions to actions removed to federal court. 443 F.3d at 680 (emphasis added). Thus, CAFA is arguably unclear as to whether federal courts are also granted original jurisdiction over 'mass actions.'
5) What a Mess: 'Mass Actions' And MDL Transfer
Pursuant to 28 U.S.C. '1407, the Judicial Panel on Multidistrict Litigation (the 'Judicial Panel') is vested with authority to transfer actions 'involving one or more common issues of fact' (pending in different federal districts) to a single judicial district for coordinated pretrial ('MDL') proceedings. Under CAFA, actions removed to federal court based on the 'mass action' provisions 'shall not thereafter be transferred to any other court pursuant to section 1407, or the rules promulgated thereunder, unless a majority of the plaintiffs in the action request transfer pursuant to section 1407.' 28 U.S.C. '1332(d)(C)(i). By restricting the Judicial Panel's authority to transfer 'mass actions' to MDL proceedings, Congress has provided plaintiffs' counsel with an effective mechanism to 'end-run' an MDL proceeding, and possibly create parallel MDL proceedings in federal districts of their choosing. This runs the risk of undermining the efficiencies that a single MDL proceeding provides for the orderly handling of mass torts in a single federal forum.
Congress' explanation of this unusual carve out from '1407 MDL transfer leaves much to be desired. In explaining this rule, the legislative history notes that:
This change recognizes the fact that a mass action of this sort will itself be a major piece of litigation (perhaps larger than any parallel MDL action), such that the matter should be left in the forum in which it was originally filed (unless attempts are made to turn the matter into a class action that should be subject to the bill's removal and jurisdictional provision to ensure coordination with other parallel class actions). S. Rep. No. 108-123, at 43 (2003).
This explanation belies the fact that MDL proceedings (particularly product liability MDLs) may include thousands of plaintiffs. Permitting groups of hundreds of plaintiffs to part ways with the MDL may lead to the disarray that transfer to a single MDL proceeding was designed to avoid. However, the federal judge to whom a 'mass action' is assigned may nevertheless voluntarily choose to coordinate discovery with the MDL proceeding.
Hope for Clarity?
Practitioners eagerly await judicial clarification of this confusion surrounding 'mass actions.' The paucity of cases to date addressing 'mass actions' ' which is not surprising as plaintiffs' counsel can avoid triggering the 'mass action' provisions by simply naming 99 or fewer plaintiffs in the action ' does not bode well for practitioners seeking guidance. Thus, finding a method to the madness of CAFA's 'mass action' provisions may well be light years away.
UPDATE: 11th Circuit Affirms Lowery Case
As the May edition of LJN's Product Liability Law & Strategy went to press, the 11th U.S. Circuit Court of Appeals sought to 'unravel some of the mysteries of CAFA's cryptic text' with respect to the 'mass actions' provisions ' which the court characterized as an 'opaque, baroque maze of interlocking cross-references that defy easy interpretation.' Lowery v. Alabama Power Co., __ F. 3d __, 2007 WL 1062769, at *1, *8 (11th Cir. Apr. 11, 2007), affirming Lowery v. Honeywell Int'l Inc., 460 F. Supp. 2d 1288 (N.D. Ala. 2006). In affirming the grant of remand, the Court of Appeals (in dicta) addressed some of the issues presented in our article 'CAFA: Finding a Method to the Madness of 'Mass Actions”:
The Court of Appeals, however, did not need to reach either of these issues; the court concluded that the removing defendants, who were added to the action after CAFA's enactment, had not satisfied their burden that plaintiffs, in the aggregate, sought in excess of $5 million. The Lowery decision further reinforces the observation that finding a method to the madness of 'mass actions' is no small task.
Alan E. Rothman is the coordinating attorney for Kaye Scholer's Product Liability Practice Group. In his firm's role as national coordinating counsel in pharmaceutical product liability actions, Rothman has been involved with several recent CAFA 'mass action' removals. He can be reached at 212-836-8860 or [email protected].
The Class Action Fairness Act of 2005 ('CAFA') expanded federal jurisdiction over putative class actions. Under CAFA, the federal diversity jurisdiction statute, 28 U.S.C. '1332, was amended to allow for both original and removal jurisdiction over putative class actions where: 1) the putative class action consists of at least 100 proposed class members; 2) the citizenship of at least one proposed class member is different from that of any defendant ('minimal diversity'); and 3) the matter in controversy, after aggregating the claims of the proposed class members, exceeds $5 million, exclusive of interest and costs. See generally
Notwithstanding its title, CAFA's reach is not limited to 'class actions.' CAFA's expanded federal jurisdiction also embodies a category of cases referred to in CAFA as 'mass actions,' namely, 'civil actions 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)(11)(B)(i). As explained in CAFA's legislative history:
The Committee finds that mass actions are simply class actions in disguise. They involve a lot of people who want their claims adjudicated together and they often result in the same abuses as class actions. In fact, sometimes the abuses are even worse because the lawyers seek to join claims that have little to do with each other and confuse a jury into awarding millions of dollars to individuals who have suffered no real injury. S. Report No. 109-14, at 47 (2005).
In addition, some states have not adopted general class action procedures (e.g., Mississippi) and some states have not permitted class action procedures to be utilized for certain types of actions, such as consumer fraud actions (e.g., Alabama and South Carolina). Thus, by including 'mass actions' under its rubric, CAFA provided defendants with a means to remove (previously unremovable) state court actions involving a large number of plaintiffs, even if the action is not pled as a class action.
CAFA's 'mass action' provisions, however, do not apply to actions where the claims: 1) 'arise from an event or occurrence in the State in which the action was filed, and that allegedly resulted in injuries in that State or in States contiguous to that State' (e.g., oil spills); 2) 'are joined upon motion of a defendant'; 3) 'are asserted on behalf of the general public (and not on behalf of individual claimants or members of a purported class) pursuant to a State statute specifically authorizing such action'; or 4) 'have been consolidated or coordinated solely for pretrial proceedings.' 28 U.S.C. '1332(d)(11)(B)(ii).
Removable 'Mass Actions' Under CAFA
As with traditional class actions under CAFA, a 'mass action' is removable to federal court where: 1) there is minimal diversity; and 2) the matter in controversy, after aggregating the claims of the plaintiffs, exceeds $5 million, exclusive of interest and costs. In a significant departure from CAFA's treatment of a putative class action, however, a federal court may only exercise jurisdiction over those plaintiffs in a 'mass action' whose individual claims exceed $75,000, exclusive of interest and costs. See 28 U.S.C. '1332(d)(11)(B)(i) (federal jurisdiction exists over 'those plaintiffs whose claims in a mass action satisfy the jurisdictional amount requirements under subsection (a) [28 U.S.C. '1332(a)]' ' which is currently $75,000, exclusive of interest and costs).
The Confusion over 'Mass Actions'
Although seemingly straightforward, CAFA's 'mass action' provisions are regrettably less than a model of clarity. In one of the few reported decisions that has addressed the 'mass action' provisions, the Ninth Circuit Court of Appeals described those provisions as 'bewildering,' 'clumsy,' and a source of 'confusion.'
1) 'Mass Actions' No Longer Meeting the Numerosity or Aggregate Amount in Controversy Requirements
As set forth above, a federal court may only exercise jurisdiction in a 'mass action' ' filed by at least 100 plaintiffs with a total amount in controversy in excess of $5 million ' over those plaintiffs whose individual claims exceed $75,000. In a 'mass action' removed to federal court where certain plaintiffs' individual claims do not exceed $75,000, CAFA does not address the situation where remand of those plaintiffs reduces the number of plaintiffs remaining in the original action below the 100 plaintiff or $5 million aggregate amount-in-controversy thresholds. Must the entire action be remanded, or may the federal court retain jurisdiction over the balance of the action?
In Abrego, supra, the court addressed, but did not resolve, this very question. In that case, the removing defendant argued that remand of those 'mass action' plaintiffs not seeking in excess of $75,000 should not deprive the federal court of jurisdiction over the remaining plaintiffs, even if those remaining plaintiffs' claims no longer met the numerosity and aggregate amount in controversy requirements for a CAFA 'mass action.' The defendant relied on CAFA's legislative history stating:
Subsequent remands of individual claims not meeting the Section 1332 jurisdictional amount re-quirement may take the action below the 100-plaintiff jurisdictional threshold or the $5 million aggregated jurisdictional amount requirement. However, so long as the mass action met the various jurisdictional requirements at the time of removal, it is the Committee's view that those subsequent remands should not extinguish federal diversity jurisdictional [sic] over the action. 443 F.3d at 686, quoting S. Rep. 109-14, at 47.
Indeed, such a result would be consistent with the well-established rule that the propriety of removal must be based on the pleadings 'as of the time of removal' (and not subsequent post-removal developments).
Plaintiffs in Abrego argued that a plain reading of CAFA's 'mass action' provisions required the opposite result, mandating remand of the entire action once the numerosity or aggregate amount in controversy requirement is no longer satisfied. CAFA provides that 'jurisdiction shall exist only over those plaintiffs whose claims in a mass action satisfy the [in excess of $75,000] jurisdictional amount.' As the Ninth Circuit explained, '[o]n this view, the jurisdictional limitation to plaintiffs asserting claims in excess of $75,000 is applicable at the time of removal and to the action as a whole. Both original and removal jurisdiction, then would depend on establishing [Section] 1332(a) jurisdiction over each plaintiff's claims, as well as on meeting the 'mass action' requirements with regard to the plaintiff over whom there is original jurisdiction.' 443 F.3d at 687 (emphasis in original). (The Ninth Circuit in Abrego avoided resolution of this issue by holding that the removing defendant bears the burden to prove federal jurisdiction. Because defendant in that case could not prove that even a single plaintiff sought more than $75,000, the court affirmed the district court's remand of the entire action.)
It remains to be seen how courts will resolve this issue.
2) Severed Plaintiffs
As set forth above, to qualify as a 'mass action,' the action must involve 100 or more plaintiffs proposed to be tried jointly. Where a 'mass action' is removed to federal court and the federal court later severs the claims of the plaintiffs on the ground that joinder of those plaintiffs in a single action was not proper, and the
number of plaintiffs in each of the severed actions falls below 100, may a federal court retain jurisdiction over the actions?
A removing defendant (the proponent of federal jurisdiction) will likely argue that severance by a court does not abrogate federal jurisdiction over the original 'mass action' plaintiffs because, under CAFA, a 'mass action' is one 'in which monetary relief claims of 100 or more persons are proposed to be tried jointly' (emphasis added), but not that the court must ultimately hold that such joinder was proper. The defendant might also rely on the rule set forth in Paragraph 1, supra, that the propriety of removal must be based on the time of removal, at which time the claims of 100 or more plaintiffs were proposed to be joined together. In response, plaintiffs might argue that remand of each action is proper because there is no longer a single action in which the claims of 100 or more plaintiffs are proposed to be joined together.
These are the arguments that courts will need to consider where this issue is presented.
3) Supplemental Jurisdiction
Subsequent to CAFA's passage, the U.S. Supreme Court held (in a case not arising under CAFA) that under the Supplemental Jurisdiction statute (28 U.S.C. '1367), a court may exercise federal diversity jurisdiction over all plaintiffs in an action where at least one plaintiff seeks in excess of $75,000, even if the other plaintiffs do not seek in excess of this jurisdictional minimum.
In light of this Supreme Court decision, a removing defendant might argue that, notwithstanding the plain language of CAFA, even if not all plaintiffs in a 'mass action' individually seek in excess of $75,000, the Supplemental Jurisdiction statute provides a basis for jurisdiction over all plaintiffs in a 'mass action,' provided that at least one plaintiff seeks in excess of that amount. CAFA's legislative history expressly states that the 'mass action' provision: 'is in no way intended to abrogate 28 U.S.C. '1367 or to narrow current jurisdictional rules in any way. Thus, if a federal court believed it to be appropriate, the court could apply supplemental jurisdiction in the mass action context as well.' S. Report 109-14, at 48.
A plaintiff is likely to argue that applying the Supplemental Jurisdiction statute to support federal jurisdiction over 'mass action' plaintiffs who do not seek in excess of $75,000 would eviscerate CAFA's express provision limiting a federal court's jurisdiction to 'only … those plaintiffs whose claims in a mass action satisfy the jurisdictional amount requirement of [in excess of $75,000].' Thus, plaintiffs will argue that the legislative history regarding '1367 supplemental jurisdiction should be ignored in the face of CAFA's express language.
Although not addressing Exxon or '1367, a federal court recently expressed its approval (in dicta) of the latter approach. Lowery v.
4) 'Mass Actions': For Removals Only?
CAFA's expansion of federal jurisdiction over traditional class actions applies equally to actions originally filed in federal court and to actions removed to federal court. See 28 U.S.C. '1332(d)(2) ('The district courts shall have original jurisdiction … ') (emphasis added); 28 U.S.C. '1453 (providing for removal of actions satisfying CAFA's requirements). As noted by the court in Abrego, CAFA's 'mass action' provisions oddly state that 'a mass action shall be deemed to be a class action removable under paragraphs (2) through (10) [of 28 U.S.C. '1332(d)] if it otherwise meets the provisions of those paragraphs,' language which appears to limit federal diversity jurisdiction over mass actions to actions removed to federal court. 443 F.3d at 680 (emphasis added). Thus, CAFA is arguably unclear as to whether federal courts are also granted original jurisdiction over 'mass actions.'
5) What a Mess: 'Mass Actions' And MDL Transfer
Pursuant to 28 U.S.C. '1407, the Judicial Panel on Multidistrict Litigation (the 'Judicial Panel') is vested with authority to transfer actions 'involving one or more common issues of fact' (pending in different federal districts) to a single judicial district for coordinated pretrial ('MDL') proceedings. Under CAFA, actions removed to federal court based on the 'mass action' provisions 'shall not thereafter be transferred to any other court pursuant to section 1407, or the rules promulgated thereunder, unless a majority of the plaintiffs in the action request transfer pursuant to section 1407.' 28 U.S.C. '1332(d)(C)(i). By restricting the Judicial Panel's authority to transfer 'mass actions' to MDL proceedings, Congress has provided plaintiffs' counsel with an effective mechanism to 'end-run' an MDL proceeding, and possibly create parallel MDL proceedings in federal districts of their choosing. This runs the risk of undermining the efficiencies that a single MDL proceeding provides for the orderly handling of mass torts in a single federal forum.
Congress' explanation of this unusual carve out from '1407 MDL transfer leaves much to be desired. In explaining this rule, the legislative history notes that:
This change recognizes the fact that a mass action of this sort will itself be a major piece of litigation (perhaps larger than any parallel MDL action), such that the matter should be left in the forum in which it was originally filed (unless attempts are made to turn the matter into a class action that should be subject to the bill's removal and jurisdictional provision to ensure coordination with other parallel class actions). S. Rep. No. 108-123, at 43 (2003).
This explanation belies the fact that MDL proceedings (particularly product liability MDLs) may include thousands of plaintiffs. Permitting groups of hundreds of plaintiffs to part ways with the MDL may lead to the disarray that transfer to a single MDL proceeding was designed to avoid. However, the federal judge to whom a 'mass action' is assigned may nevertheless voluntarily choose to coordinate discovery with the MDL proceeding.
Hope for Clarity?
Practitioners eagerly await judicial clarification of this confusion surrounding 'mass actions.' The paucity of cases to date addressing 'mass actions' ' which is not surprising as plaintiffs' counsel can avoid triggering the 'mass action' provisions by simply naming 99 or fewer plaintiffs in the action ' does not bode well for practitioners seeking guidance. Thus, finding a method to the madness of CAFA's 'mass action' provisions may well be light years away.
UPDATE: 11th Circuit Affirms Lowery Case
As the May edition of LJN's Product Liability Law & Strategy went to press, the 11th U.S. Circuit Court of Appeals sought to 'unravel some of the mysteries of CAFA's cryptic text' with respect to the 'mass actions' provisions ' which the court characterized as an 'opaque, baroque maze of interlocking cross-references that defy easy interpretation.'
The Court of Appeals, however, did not need to reach either of these issues; the court concluded that the removing defendants, who were added to the action after CAFA's enactment, had not satisfied their burden that plaintiffs, in the aggregate, sought in excess of $5 million. The Lowery decision further reinforces the observation that finding a method to the madness of 'mass actions' is no small task.
Alan E. Rothman is the coordinating attorney for
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