Caught with its pants down, AT&T took one in the Shorts last January, as the CAFA Law Blog previously reported. (Editors’ Note:  See the CAFA Law Blog analysis of the district court decision in Shorts posted on July 23, 2008).  

Now, we are pleased to have a guest columnist today.  Our guest columnist is Jonathan Bridges of Susman Godfrey in Dallas, counsel for Charlene Shorts.  Jonathan contacted the CAFA Law Blog to let us know that AT&T is seeking appellate relief from the district court decision.  We asked Jonathan to author a post on the appeal, and here it is.  


When AT&T decided to sic its collections agency on customer Charlene Shorts in small claims court, Shorts responded with a class-action counterclaim on behalf of more than 160,000 West Virginians against both the collection agency and AT&T Mobility aka Cingular aka AT&T Wireless.

What the CAFA Law Blog didn’t report then, however, was that AT&T immediately filed a petition for permission to appeal under CAFA, asking the Fourth Circuit to pull up the Shorts case to federal court. Apparently liking what it saw in AT&T’s Shorts, the Fourth Circuit asked for full briefs on the merits and scheduled oral argument, where it might get a closer look this October. 

AT&T’s briefs (filed by AT&T Mobility, the collection agency, and the Chamber of Commerce as amicus) present a tidy and—dare we say it—plain-vanilla-whitey policy argument that Congress surely didn’t mean to create a counterclaim class-action loophole. According to the briefs, CAFA says plaintiff’s lawyers have abused state-court class actions, and Congress meant to put a stop to that, even if the plaintiff’s lawyer’s clients happen to be defendants.

In response, Shorts points out that AT&T’s briefs are overly confining to the point of uncomfortably and inappropriately restricting Supreme Court precedent, which emphatically holds that counterclaim defendants like AT&T don’t get to remove counterclaims to federal court. Her less-confining brief is available here

Notably, it is roomy enough to mention that AT&T would have the court ignore the plain language of CAFA’s text and a series of established jurisdictional principles: the rule that counterclaim defendants cannot remove, the rule that removal jurisdiction is determined by examining only the well-pleaded complaint without regard to defenses or counterclaims, the principle that the right of removal is strictly construed to ensure that state courts remain full participants in the federal system, the principle that Congress is aware of existing law (such as the rule barring removal by counterclaim defendants) when it enacts later statutes (such as CAFA), the principle that assignments creating federal jurisdiction are regarded with suspicion, and the principle that statutes should be construed to avoid constitutional difficulties.

One additional point of interest. Because Congress didn’t want appellate courts devoting too much time to CAFA briefs, it put a very short sixty-day limit on appellate consideration of such appeals. The Fourth Circuit has short circuited this limitation by scheduling full briefing and oral argument in Shorts before formally deciding whether to permit the appeal, thereby ensuring that its time won’t get shortened and it won’t have to give short shrift to Shorts.  (Jonathan Bridges)