In re Am. Family Mut. Ins. Co. Overtime Pay Litig., 638 F. Supp. 2d 1290 (D. Col. 2009).
In this consolidated action, the Colorado District Court dismissed without prejudice the Rule 23 state law class action claims asserted in the amended complaint filed post CAFA ruling that it related back to the original complaint filed pre CAFA, therefore, the commencement date of the state claims was the date of filing of the original complaint notwithstanding the amendments. In doing so, the Court reiterated that it could not exercise original jurisdiction on the action “commenced” prior to CAFA’s effective date.
On October 20, 2004, Rocky Baldozier and three others, on behalf of themselves and on behalf of other claims adjusters, sued their employer, American Family Mutual Insurance Co., in the district court of Colorado, seeking unpaid overtime pay and related damages under federal (FLSA) and Colorado state wage and overtime law. In August 2004, Robert Schultz brought a similar action in the district court of Illinois under FLSA and Illinois state law. On February 13, 2006, the Judicial Panel on Multidistrict Litigation consolidated these cases and transferred to the district court of Colorado as a single case. Before consolidation of these actions, the Courts had dismissed their state claims and ordered notice to putative class members in their FLSA collective action claims.
Desiring to bring other state law claims, the Baldozier Plaintiffs moved for leave to amend the complaint on September 30, 2005, adding four new Rule 23 state law class action claims under the wage and overtime laws of Wisconsin, Ohio, Minnesota, and Illinois. On November 28, 2005, the Baldozier Plaintiffs were granted leave to file a first amended complaint.
After the Baldozier Plaintiffs filed their first amended complaint, American Family moved to dismiss these four new state claims.
The Baldozier Plaintiffs argued that the Court had original jurisdiction over these state claims pursuant to CAFA.
Declining to exercise original jurisdiction, the Court held that the new state claims arose out of the same conduct alleged in the original complaint, thus, they related back to the original action “commenced” prior to CAFA’s effective date—February 18, 2005. As CAFA has no retroactive effect, the Court dismissed these claims.
In doing so, the Court noted the Tenth Circuit’s opinion in Prime Care of Ne. Kan., LLC v. Humana Ins. Co., 447 F.3d 1284, 1285 (10th Cir. 2006) that the addition of new claims sufficiently distinct from a prior pleading may “commence” a new action under CAFA, if the new claims do not “relate back” to the prior pleading. (Editors’ Note: See the CAFA Law Blog analysis of Prime Care posted on August 16, 2006).
As the original complaint in Baldozier was filed prior to CAFA’s effective date, and the first amended complaint was filed after CAFA’s effective date, the Court determined whether the state claims asserted in the first amended complaint “related back” to the original Complaint.
To answer this issue, the Court relied on Rule 15(C)(1)(B), which provides that an amended complaint relates back to the date of the original complaint when the amendment asserts a claim that arose out of the “conduct, transaction, or occurrence set out–or attempted to be set out–in the original pleading.” The Court found that while the new class claims were pled under different states’ overtime statutes, both the state claims and FLSA claim sought payment of unpaid overtime. Thus, the new state claims arose out of the same conduct alleged in the original complaint, namely, the assertion that American Family improperly refused to pay certain of its claims adjusters’ overtime wages. Accordingly, the Court concluded that the state claims merely added alternative theories of relief rather than wholly distinct claims.
As a result, the plaintiffs will have to re-litigate their state law class action claims in the respective state courts.