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CAFA Law Blog Information, cases and insights regarding the Class Action Fairness Act of 2005

District Court Holds Defendant Has No Independent Duty To Investigate Whether A Case Is Removable Under CAFA

Posted in Case Summaries

Portnoff v Janssen Pharmaceuticals Inc, 2017 WL 708745 (E.D. Penn. Feb. 22, 2017).

A Pennsylvania District Court found that although a defendant must apply a “reasonable amount of intelligence” when ascertaining removability based on a plaintiff’s initial petition and “other paper,” a defendant has no independent duty to investigate and can rely on the plaintiffs pleadings and “other papers” in determining whether or not an action is removable. Here, the court determined the action was properly removed under CAFA.

Case Background and Procedure

The plaintiffs filed one hundred and six (106) separate lawsuits in the Philadelphia County Court of Common Pleas alleging injuries sustained as a result of ingesting Invokana, a prescription drug used to treat Type 2 Diabetes, describing a variety of ailments including kidney failure and diabetic ketoacidosis.  Six separate law firms representing the plaintiffs in a number of those actions filed a “Petition to Consolidate and for Mass Tort Designation” in the Court of Common Pleas (“Initial Petition”).  The initial consolidation petition was later withdrawn, and on the same day a second consolidation petition was filed (“Second Petition”).

Relying on the Second Petition, the defendants removed all 106 cases to the District Court, asserting federal jurisdiction as a mass action pursuant to CAFA.  The plaintiffs moved to remand, arguing that the defendants’ attempt to remove those cases was untimely, and that the District Court lacked jurisdiction under CAFA.

Plaintiff’s Arguments Against Removal

The plaintiffs argued that the defendants could have first ascertained that the matter was removable under CAFA when the Initial Petition was filed as it constituted an “other paper” under 28 U.S.C. § 1446(b)(3) setting forth the basis for federal jurisdiction, so removal more than 30 days after the filing of the Initial Petition removal was untimely.  The plaintiffs explained that although the Initial Petition outlined 87 pending cases, it included claims for over 100 plaintiffs, providing sufficient notice of removability.  The plaintiffs further stated that the Second Petition was merely a “refiled version” of the Initial Petition.

Defendant’s Argument in Support of Removal

The defendants argued that the Initial Petition was withdrawn from the state-court docket and thus any question pertaining to removability based on the Initial Petition was moot.  Additionally, the defendants argued that CAFA’s numerosity requirement was not satisfied based on the Initial Petition as it was submitted on behalf of only six law firms that collectively represented fewer than 100 plaintiffs.

Defendants acknowledge that the Initial Petition identified additional cases filed by other plaintiffs who were represented by other counsel collectively totaling over 100 plaintiffs, but the defendants had no legal basis to ascertain that these “other plaintiffs” would acquiesce to the proposal for consolidation until the twenty-day deadline for opposing the petition expired

The defendants stated that approximately two days before the deadline to respond to the Initial Petition expired that petition was withdrawn, and the plaintiff filed the Second Petition.  Thus, even if the issue was not moot, they could not have conclusively ascertained removability from the withdrawn Initial Petition because CAFA’s numerosity requirement had not been satisfied.  The defendants contended that they could not ascertain whether the cases were removable as a mass action until 20 days after the Second Petition had been filed.

District Court’s Analysis:

The Plaintiffs’ Initial Petition Did Not Meet CAFA’s Numerosity Requirement

The District Court noted that the chart attached to the Initial Petition identified 87 cases, and according to that chart the six law firms that consented to the filing of the Initial Petition represented approximately 89 plaintiffs in 60 cases.  The District Court found that because there were only 89 plaintiffs that affirmatively proposed consolidation, the plaintiffs’ Initial Petition did not unambiguously notify the defendants to a substantial degree of specificity that the numerosity requirement of CAFA had been satisfied.  The District Court thus opined that the defendants could not first ascertain from the Initial Petition that the cases were removable as a mass action under CAFA.

The District Court further noted that the Initial Petition was withdrawn before the twenty-day deadline expired by which “other plaintiffs” represented by other counsel could object to consolidation. The District Court therefore opined that even assuming that the Initial Petition was not legally inoperable by its withdrawal, the thirty-day removal clock was not triggered by the Initial Petition because CAFA’s numerosity requirement could not be ascertained due to the Initial Petition’s withdrawal.

Plaintiffs’ Second Petition Also Did Not Meet CAFA’s Numerisoty Requirement

Similar to Plaintiff’s Initial Petition, the Second Petition identified ninety-four (94) cases in a chart submitted with the Petition. According to the chart, the six law firms were listed as counsel in just sixty-seven (67) of those cases. Based on the chart, those 67 cases appear to be comprised of ninety-six (96) plaintiffs—again, short of the 100 required to meet CAFA’s numerosity requirement. Accordingly, the court held the Second Petition did not unambiguously inform Defendants to a substantial degree of specificity that at least 100 plaintiffs proposed consolidation such that the cases were removable as a mass action under CAFA.

The court held it was not until October 31, 2016, the twenty-day deadline for the “other plaintiffs” represented by “other counsel” to join the case, that the thirty-day removal clock would have been triggered because only at that point could it “first be ascertained” that the numerosity requirement was met, and thus the cases were removable under CAFA.  The District Court thus opined that because the defendants filed their notice of removal just nine days later, they properly and timely invoked CAFA’s mass action provision when they removed the 106 cases to federal court.

Jurisdiction Under CAFA’s Mass Action Provision

After determining the defendants timely removed the action, the court turned its attention to the number of cases to determine if CAFA’s mass action requirement was met. The defendants argued that once the period for objecting to the Second Petition lapsed, the Second Petition effectively proposed a joint trial of 106 cases, satisfying CAFA’s mass action provision.

The plaintiff argued that the Second Petition contemplated consolidation for pretrial proceedings only, and the single mention of a joint trial in the Second Petition’s conclusion was a “scrivener’s error.”  The District Court found that it was undisputed that the Second Petition explicitly and plainly proposed a joint trial, as it stated in a section entitled “Conclusion,” that “[i]n sum, the creation of a mass tort program is appropriate here because the Related Actions involve common questions of fact and law and consolidation for pre-trial and trial will promote judicial economy and the just and efficient resolution of these actions.”

The District Court further found that the statement was also consistent with the reasons the plaintiff offered in the Second Petition in support of consolidation.  For example, the plaintiff urged that consolidation would help avoid inconsistent judicial rulings and stated, three separate times that consolidation would promote the efficient prosecution and “resolution” of the “claims” and/or “actions.”  The District Court opined that the terms joint “resolution” of “claims” and “actions” strongly suggested a joint liability determination, i.e., a joint trial, rather than coordination for discovery and pretrial proceedings.  The District Court thus concluded that a common sense reading of the entire Second Petition established that the plaintiff proposed a joint trial.

The District Court therefore held that the defendants properly and timely invoked CAFA’s mass action provision when they removed the 106 actions to federal court and accordingly, denied the plaintiff’s motion to remand. The District Court denied the plaintiffs’ motion.