Jessica Casey, et al., v. Roger Denton, et al., 2017 WL 3461363 (S.D. Ill. Aug. 11, 2017).

In this action, while denying the plaintiffs’ motion to remand, a district court in Illinois found that CAFA is not the exclusive means for establishing subject matter jurisdiction over class actions, and that 28 U.S.C. § 1331 original jurisdiction, and § 1332 CAFA jurisdiction, are two alternative bases for removal.

The plaintiffs brought a putative class action in Illinois state court for one count of legal malpractice against numerous defendants stemming from actions involving the multidistrict litigation, In re Yasmin and YAZ (Drospirenone) Marketing, Sales Practices and Products Liability Litigation, MDL 2100, No. 3:09-md-02100-DRH-CJP (“MDL” or “Yaz MDL”).  The Yaz MDL consolidated personal injury lawsuits relating to various plaintiffs’ use of Bayer Corporation-manufactured oral birth control, including YAZ, Yasmin, and the generic equivalent, Gianvi.  According to the MDL plaintiffs, these contraceptives caused various injuries as a result of thrombotic events triggered by the components used to make the drugs.

Among the defendants were lead and/or liaison counsel appointed by the District Court to assist in the efficient running of the MDL and attorneys and law firms retained by the plaintiffs in the underlying action. Specifically, the plaintiffs sued for the purported failure of the appointed lead/liaison counsel and the other attorneys to respond to a motion to dismiss filed by Bayer, which ultimately led to the plaintiffs’ and the putative class’ dismissals with prejudice.

The defendants Michael S. Burg (“Burg”) and Burg, Simpson, Eldredge, Hersh & Jardine, P.C. (“Burg Simpson”) removed the action arguing that the District Court had original jurisdiction because it was a “civil action arising under the Constitution, laws, or treaties of the United States.” The plaintiffs moved to remand, which the District Court denied.

The defendants claimed that the plaintiffs’ allegations “called on the District Court to reach determinations regarding the nature of, and the extent of, the duties of lead and liaison counsel in federal multidistrict litigation, appointed by a federal court, pursuant to federal statute” and that the suit would require “interpretation of how those duties were exercised pursuant to orders of the District Court.” The Burg defendants also alleged that the District Court had supplemental jurisdiction over the malpractice claims against the attorneys that were retained by the plaintiffs in the underlying action.

The plaintiffs argued that CAFA governed the instant case and that removal was improper because the mass action filed by the plaintiffs failed to meet jurisdictional requirements of more than 100 plaintiffs as required by CAFA.

The District Court noted that federal courts are courts of limited jurisdiction, possessing only that power authorized by the Constitution and statute, and a case cannot remain in federal court if the court cannot properly exercise subject matter jurisdiction over the suit in question. The District Court further noted that the statutes that create federal jurisdiction are 28 U.S.C. § 1331, original or “arising under” jurisdiction, and 28 U.S.C. § 1332(d), jurisdiction arising under CAFA.

Under the plaintiffs’ theory of removal, CAFA was the only mechanism to remove class or mass actions. The plaintiffs argued that the unavoidable defect in Burg’s theory of removal based upon CAFA jurisdiction was that the case contained only 44 plaintiffs, which was well short of the 100 plaintiffs required for the exercise of jurisdiction over questions of fact and law in a mass action.  The District Court, however, found that the plaintiffs missed the mark arguing CAFA jurisdiction, as the notice of removal filed by the defendants did not even mention the statute.  The District Court opined that § 1331, original jurisdiction, and § 1332, CAFA jurisdiction, are two alternative bases for removal.  Thus, the District Court ruled that because alternative bases for removal existed, the plaintiffs were wrong to argue CAFA jurisdiction and ignore the defendants’ stated basis for removal, federal question jurisdiction.

Consequently, the District Court analyzed the Burg defendants’ stated basis for removal, and found that original jurisdiction existed over the federal question of what fiduciary relationship existed between MDL leadership counsel and individual plaintiffs in the MDL lawsuit. The District Court further found that the federal issue was necessarily raised by the complaint, actually disputed by the parties, substantial to the lawsuit, and was capable of resolution in federal court without disrupting the federal-state court balance approved by Congress.  The District Court also found that because federal question jurisdiction was found, supplemental jurisdiction was also proper over the malpractice claims against the plaintiffs’ individually retained attorneys due to the allegations arising from the same case or controversy.

Accordingly, the District Court denied the plaintiffs’ motion to remand.

– Melissa Broussard Carroll