In re Expedia Hotel Tax & Fees Litigation, Case No. C05-0365C, 377 F.Supp. 2d 904 (W.D. Wash. April 15, 2005).
A slight twist to the “commencement” issue – in this Washington State Federal District Court decision decided some two months after CAFA was enacted, U. S. District Judge John C. Coughenour held that these state court class actions filed prior to February 18, 2005 but consolidated after February 18th could not be removed using the Class Action Fairness Act of 2005 as the basis for federal jurisdiction. In this case, three of the plaintiffs filed separate class action lawsuits in Washington state court in late January and early February, 2005, against Expedia, alleging in each suit violations of the Washington State Consumer Protection Act by Expedia’s levying tax recovery and service fees in connection with hotel reservation transactions. On February 18th, two events occurred: the state court judge consolidated the three lawsuits, and President Bush signed the Class Action Fairness Act.
Expedia removed the consolidated action to federal district court on March 7th, arguing that the case was “commenced” on the date that it was removed, or alternatively, on the date the state court consolidated the three original lawsuits. The plaintiffs responded with the now-familiar argument that the cases were “commenced” when initially filed in state court. The court, citing Ninth Circuit law, placed the burden of proving federal jurisdiction squarely on Expedia’s shoulders as the party seeking removal.
Judge Coughenour rejected Expedia’s argument that the case was “commenced” when the state court consolidated the three suits, reasoning that Washington’s Rules of Civil Procedure indicated that “commencement” occurs at the time of “filing.” For the same reason, the court rejected Expedia’s argument that the case was “commenced” on the date of removal, and concluded that the plaintiffs’ motion to remand should be granted.