Eagle US 2, LLC v Abraham, 627 Fed.Appx. 351 (5th Cir. Dec. 11, 2015).

In this action, the Fifth Circuit found that the “100-or-more-persons” requirement under the mass action provision of CAFA cannot be satisfied by piercing the pleadings across multiple state court actions filed by the plaintiffs’ lawyers, breaking up their client base into multiple suits with identical allegations, when the plaintiffs have not proposed that those actions be tried jointly or otherwise consolidated.

Twenty-three Louisiana residents filed this cumulative action in Louisiana state court alleging that they were exposed to the toxic release due to the negligence of the defendants, which caused them to sustain various injuries. The explosion and resulting fire on December 20, 2013 at the Eagle chemical manufacturing facility in Calcasieu Parish, Louisiana allegedly caused the release of toxic chemicals, gasses and smoke into the air, affecting the facility and surrounding area.

The plaintiffs cumulated their individual claims pursuant to Louisiana Code of Civil Procedure articles 463-465, which provides for plaintiffs to file their claims together while each plaintiff maintains its individual status.

The defendants removed the action to federal district court under the “class action” and “mass action” provisions of CAFA. The plaintiffs moved to remand, which the district court granted.  The defendants appealed, and the Fifth Circuit declined review for lack of appellate jurisdiction as 28 U.S.C. § 1453(c)(1) allows review only of an order remanding “a class action,” and this case was not a class action as defined in 28 U.S.C. § 1332(d)(1)(B).  The Fifth Circuit reasoned that § 1332(d)(1)(B)’s definition of a “class action” does not encompass this case because the Louisiana cumulation procedure employed by the plaintiffs does not authorize “representative” litigation.

The defendants sought rehearing en banc, arguing that the Fifth Circuit did not address whether this case was a “mass action.”  Treating the petition for rehearing en banc as a motion for reconsideration, the Fifth Circuit denied the motion.

At the outset, the Fifth Circuit remarked that, assuming arguendo that 28 U.S.C. § 1453(c)(1) allows review of orders remanding mass actions as well as class actions, review was nevertheless foreclosed because this case was not a mass action.

Section 1332(d)(11)(B)(i) of CAFA defines a “mass action” as “any civil action . . . in which monetary relief claims of 100 or more persons are proposed to be tried jointly on the ground that the plaintiffs’ claims involve common questions of law or fact.” In remanding the case to state court for lack of removal jurisdiction, the district court determined that this lawsuit was not a mass action as that term is defined in CAFA.  Because this case did not involve “100 or more persons,” the Fifth Circuit agreed with the district court’s conclusion.

The defendants, however, asserted that the complaint in this case was “one of 77 complaints filed by the same lawyers making identical claims on behalf of more than 1,700 plaintiffs.” The defendants argued that the “100-or-more persons” requirement under the mass action provision of CAFA was satisfied because the fact that plaintiffs’ counsel broke up their client base into multiple suits making identical allegations was not a tactic that prevented the assertion of jurisdiction under CAFA.

The Fifth Circuit disagreed with the defendants because the “mass action” definition requires “100 or more persons” whose claims “are proposed to be tried jointly.” The Court concluded that the “100-or-more-persons” requirement cannot be satisfied by piercing the pleadings across multiple state court actions when the plaintiffs have not proposed that those actions be tried jointly or otherwise consolidated.  The Fifth Circuit provided that every other court of appeals confronted with this question has come to the same conclusion: that plaintiffs have the ability to avoid mass action jurisdiction under §1332(d)(11)(B)(i) by filing separate complaints naming less than 100 plaintiffs and by not moving for or otherwise proposing joint trial in the state court.  In this action, there was no attempt to consolidate with any other separately filed lawsuit(s) and plaintiffs’ counsel had not proposed to try any of the lawsuits jointly.

Accordingly, the Fifth Circuit concluded that this action was not a “mass action” because it did not involve “100 or more persons.”

Posted by Kerry Cummings