In a garnishment action to collect insurance proceeds brought by a lone plaintiff, the District Court found that it satisfied the requirements of CAFA removal because an action to collect insurance proceeds brought by the class representative was in substance a class action.
The plaintiff Barbara Williams filed this action in the Circuit Court for Lincoln County, Missouri. The action was filed on behalf of a previously certified class to recover a $82,037,000 judgment obtained in a separate state court action styled Williams v. The Collier Organization (hereinafter referred to as the “Original Lawsuit”).
The Original Lawsuit was filed by current and former residents of the Autumn Hills Mobile Home Park operated by the defendant The Collier Organization (“Collier”). The plaintiffs sought bodily injuries and property damages caused by drinking and using water in the mobile home park that contained alpha particle radiation. Collier sought indemnification from its corporate liability insurers but was denied coverage. Collier’s insurers denied that they had any duty to defend under the policies.
The Insurers subsequently filed a complaint in District Court requesting a declaratory judgment that they did not have a duty to indemnify Collier. The plaintiff here filed the instant suit in state court against the insurer defendants and Collier. The plaintiff also filed a motion to dismiss the insurers’ declaratory judgment action on the basis that it was a state law matter and duplicative of the pending garnishment action. In response, the insurers voluntarily dismissed the federal action, but removed the pending state court garnishment action under CAFA to the federal court.
The plaintiff moved to remand claiming that removal was improper because her garnishment action was not a “civil action filed under” either Rule 23 or a Missouri class action rule. The plaintiff further argued that her action did not seek to resolve any class certification requirements, nor would it address any class questions under either Rule 23 or Missouri’s class action rule. Rather, her action was filed under § 379. 200 RSMo, which provides for the collection of insurance proceeds? by a judgment creditor.
The defendants relied on Addison Automatics, Inc. v. Hartford Casualty Ins. Co., 731 F.3d 740 (7th Cir. 2013), and argued that a class action by any other name is still a class action. In Addison, a plaintiff represented a class of plaintiffs in a state court class action against defendant. The defendant agreed to the entry of a judgment after class certification, but plaintiffs agreed to seek execution of the judgment against the defendant’s insurer, which had declined to defend the defendant. So the class representative filed a separate lawsuit against the insurer in state court, which the insurer removed pursuant to CAFA. The district court granted the plaintiff’s motion to remand, and the Seventh Circuit reversed. The Seventh Circuit held that the action to collect insurance proceeds brought by the class representative was in substance a class action. The plaintiff had standing only in its capacity as a class representative, and its complaint sought a ruling on the insurer’s duty to its insured on a claim the insured had assigned to the Class. Moreover, the class had been and remained certified pursuant to Illinois law, and plaintiff and its counsel were responsible for trying to obtain relief on the class’s behalf.
The District Court observed that in passing CAFA, Congress emphasized that the term “class action” should be interpreted liberally, and its application should not be confined solely to lawsuits that are labeled “class actions” by the named plaintiff for the state rulemaking authority. The District Court remarked that the plaintiff’s lawsuit, like the plaintiff in Addison, sought to recover for the class, and it undoubtedly “resembled” a class action and should be considered as such for the purpose of CAFA.
Accordingly, the District Court refused to remand the case to the state court.