Dalton v. Walgreen Co., 2013 WL 2367837 (E.D. Mo. May 29, 2013).
Staying its remand order to facilitate the defendant to prefer an appeal, the U.S. District Court for the Eastern District of Missouri held that it had jurisdiction to reopen the case for the limited purpose of staying the remand order, because to hold that a district court lacks the limited jurisdiction to stay its remand order in a CAFA case would render hollow the statutory right to appeal a CAFA remand order.
The plaintiffs brought an action in Circuit Court of Phelps County, Missouri, alleging that the defendant tracked and used the plaintiffs’ internet history in violation of the Missouri statute regarding computer tampering, the Missouri Merchandising Practices Act, and common law. The defendant removed this case to the District Court, pursuant to CAFA. The plaintiffs moved to remand the action to state court, and the District Court granted the plaintiff’s motion holding that the defendant failed to establish that the amount in controversy exceeded $5 million. Thereafter, the Eighth Circuit granted the defendant’s petition for permission to appeal the remand order. The defendant moved for a stay of the remand order, arguing that equity favored issuance of a stay. The District Court granted the motion.
Because 28 U.S.C. § 1447(d) states that an order remanding a case to state court is generally not reviewable on appeal, the District Court found that, when a district court issues a remand order, the court is ordinarily divested of jurisdiction, allowing the state court to proceed with the case. The District Court, however, also noted an exception to the general rule that remand orders are not appealable, because federal courts of appeals pursuant to 28 U.S.C. § 1453(c) are expressly authorized to exercise their discretion to accept an appeal from a remand order under CAFA notwithstanding §1447(d).
The District Court, therefore, found that it had jurisdiction to reopen this case for the limited purpose of staying the remand order. To hold that a district court lacks the limited jurisdiction to stay its remand order in a CAFA case would render the statutory right to appeal a CAFA remand order hollow.
When deciding a motion to stay pending appellate review and determining whether a stay is warranted, the following factors should be considered: (1) the likelihood that a party seeking the stay will prevail on the merits of the appeal; (2) the likelihood that the moving party will be irreparably harmed absent a stay; (3) the prospect that others will be harmed if the court grants the stay; and (4) the public interest in granting the stay.
The District Court found that the defendant demonstrated an adequate likelihood of success on the merits of the appeal and that it could be irreparably harmed by the burden of having to simultaneously litigate the action in state court and on appeal to the Eighth Circuit. The defendant further showed the potential of inconsistent outcomes if the state court ruled on any motions while the appeal was pending.
Further, the District Court stated that, if a stay was granted, then neither party would be required to incur additional expenses from simultaneous litigation before a definitive ruling on appeal was issued, and the plaintiff would not be harmed by a lengthy delay because of the expedited appellate review process set forth in § 1453(c). Also, the District Court noted that the public interest favored granting a stay, because it would avoid potentially duplicative litigation and would judicial resources. Accordingly, the District Court granted the defendant’s motion to stay the remand order.