Bryant v. General Motors Corporation, No. 05-4028 (W.D. Ark. Sept. 12, 2005).
Alleging that General Motors distributed vehicles with defective parking brakes, plaintiffs originally filed suit on February 4, 2005, prior to the effective date of the Class Action Fairness Act of 2005, in the Circuit Court of Miller County, Arkansas. Relying on CAFA and 28 U.S.C. § 1332, General Motors removed the action to federal court on April 7, 2005. The plaintiffs timely moved to remand the case back to state court. In his motion to remand, Bryant argued that his claim did not meet the $75,000 minimum amount in controversy threshold under Section 1332, and that even if his claim met the minimum, the court still lacked supplemental jurisdiction over the remaining class members’ claims, since none of their claims met the $75,000 minimum.
Relying on the U. S. Supreme Court’s recent decision in Exxon Mobil Corp. v. Allapatah Services, Inc., 125 S.Ct. 2611 (2005) (Editor’s Note: See CAFA Law Blog summary posted on September 22, 2005), U. S. District Judge Harry F. Barnes observed that supplemental jurisdiction over the balance of the class members may be proper as long as Bryant’s claims satisfied the amount in controversy. In assessing whether Bryant’s claim met the required jurisdictional amount, Judge Barnes was forced to venture into uncharted territory by considering the relatively novel issue of whether the cost of class notice should be included in the calculation of the amount in controversy,noting, “[t]he parties and the Court have found no case law holding whether or not the cost of class notice in a putative class action counts toward establishing the amount in controversy.” Searching for guidance, the court relied on the only authority it could find — the express wording of Section 1332 itself — and concluded that the cost of notice does not count toward the amount in controversy.
The plaintiff then turned to the CAFA jurisdictional issue and the date of “commencement,” arguing that the Class Action Fairness Act did not apply to this class, since the case was “commenced” on February 4, 2005, 14 days before CAFA took effect, and not upon the date of service of process or removal of the action. Relying largely on Pritchett v. Office Depot, Inc., 404 F.3d 1232 (10th Cir. 2005) (Editor’s Note: See CAFA Law Blog summary posted on October 23, 2005), the court declared that the action was commenced before CAFA became law, upon the initial filing of the action, and thus could not remain in federal court under CAFA. Judge Barnes distinguished the facts of this case from Pritchett, in that here, GM removed the case within the 30 day deadline under 28 U.S.C. § 1446 (b), but dismissed the distinction, averring “the fact that GMC timely complied with §1446 has little bearing on the statutory construction of the term ‘commenced’ in § 9 of CAFA.” Pritchett thus remains a formidable roadblock to federal jurisdiction under CAFA for class actions initially filed before February 18, 2005, absent a Knudsen exception event.