Passarella v. Ginn Co., — F.Supp.2d —-, 2009 WL 1953030 (D. S.C., Jul 02, 2009) (NO. C/A 3:09-417-JFA).
Although the Interstate Land Sales Full Disclosure Act (“ILSA”) prohibits removal of a case filed in state court, the South Carolina District Court declined to remand the action to state court holding that CAFA, as a specific statute for removal, has a categorical right to removal, and therefore, effects an implied repeal of the ISLA’s bar to removal.
The plaintiffs brought a class action in state court alleging various wrongful actions the defendants took in connection with the Cobblestone Park real estate development in the northeast area of Columbia, South Carolina. Of the five causes of action, two were alleged violations of the ILSA, Pub. L. No. 90-448, 82 Stat. 476 (1968).
The defendants removed the case to the federal court pursuant to CAFA, and the plaintiffs moved to remand pointing out that ILSA, 15 U.S.C.A. § 1719, prohibits removal of a case filed in state court.
The District Court stated that this was an example of “irreconcilable conflict” between statutes. While ISLA contains a categorical bar on the removal of its cases which are brought in state court, CAFA provides for the categorical removal of qualifying class actions save for the few which are excepted in 28 U.S.C. § 1453(d). Thus, the Court noted that both being specific laws, the canon that a special law overrides a general law was not useful here.
The Court observed that CAFA is the more recently enacted statute; it provides a right to removal for qualifying class actions; and it spells out three exceptions to its grant of a right to removal. It, therefore, effects an implied repeal of ISLA’s bar to removal, but only in the limited circumstance that ISLA claims appear in a class action. The Court remarked that although implied repeals are disfavored, there is little guesswork in surmising that Congress intends some substantial revisions when it grants a categorical right to removal and provides for only limited, specific exceptions.
Second, the Court rejected the plaintiffs’ argument that CAFA expanded only the original jurisdiction of the federal courts and that it did not affect an action’s eligibility for removal.
The Court noted that § 1453 clearly provides a right of removal for the class actions, which does not appear to be qualified in any way save for the procedural requirements spelled out in that statute, in § 1446, and in the limited exceptions contained in § 1453(d). The Court rejected the plaintiffs’ argument that § 1453 should be treated as dealing only with a subset of removable actions as spelled out in § 1441.
Trying to take advantage of § 1441’s “except as otherwise provided by Act of Congress”, the plaintiffs argued on the qualification on the ability to remove an action. The Court remarked that where § 1441 deals with actions removable generally, § 1453 deals with the specific topic of removal of class actions. The Court stated that the statute does not reference § 1441, and lists specific exceptions; a factor weighing against interpreting the statute to incorporate § 1441’s general qualification.
Finally, the Court found that Katz v. Gerardi, 552 F.3d 558 (7th Cir. 2009), which held that CAFA’s removal provision trumped the bar to removal in the Securitas Act was more persuasive than the Ninth Circuit’s opinion in Luther v. Countrywide Home Loans Servicing, LP, 533 F.3d 1031, 1304 (9th Cir. 2008) that removal statutes must be strictly construed against and that the Securities Act was the more specific statute of the two. The Court stated that it had already explained that the general/specific tool of statutory construction was not helpful here. The Court remarked that there was little room to construe, either strictly or robustly, a statute like § 1453 which provides a right of removal for class actions subject only to limited exceptions.