Adams v. Ins. Co. of North America, 426 F. Supp. 2d 356, No. 2:05-0527, 2006 WL 897945 (S.D. W. Va. Mar. 30, 2006).

(Editor’s Note:  We read this case for you so you wouldn’t have to.  You can thank us later.)  In this consolidated action involving four asbestos class actions, West Virginia federal District Judge John T. Copenhaver, Jr. issued a protracted opinion addressing, among other issues, all four plaintiffs’ motions for remand. Realizing the opinion’s potential for excessive length, Judge Copenhaver attempted to manage the task by treating the Adams case as the lead action, and mentioning the other actions when the difference in facts necessitated differentiation. However, despite acknowledging the potential for an unwieldy opinion, the court’s analysis of the action’s commencement (for CAFA purposes) and CAFA’s effect on the burden of proving federal jurisdiction consists largely of extended block quotes from various opinions, which, while not making for riveting reading, does permit a broad review of precedent applying the Class Action Fairness Act.

Embarking on his extensive review of CAFA precedent, Judge Copenhaver began the CAFA section of the opinion with an introduction to the statute itself. After laying out the statutory language of CAFA, the court considered whether Congress’ enactment of CAFA switched the burden of proving federal jurisdiction from the traditional bearer, the party invoking the court’s jurisdiction, to the party contesting the court’s jurisdiction, generally the plaintiff. In support of their argument, the defendants directed the court to CAFA’s legislative history, specifically Senate Report 109-14, in which the Senate Committee stated, “plaintiff(s) should bear the burden of demonstrating that a case should be remanded.”

Judge Copenhaver was, however, underwhelmed. He stated, “[s]urprisingly, the lower courts are split on whether this committee report altered the burden of demonstrating the propriety of exercising subject matter jurisdiction.” Despite his surprise, the judge did not end consideration of this issue curtly or concisely, but proceeded to bury the argument in a massive block quote from the 7^th Circuit’s opinion in Brill v. Countrywide Home Loans, Inc., (See CAFA Law Blog’s summary of Brill posted November 2, 2005), adopting Brill’s “holding and analysis in its entirety.”  

Having smothered the defendants’ burden of proof argument with a large shot of Brill, the court turned to the commencement issue. Beginning by defining the word “commencement” in Webster’s Third New International Dictionary, Judge Copenhaver concluded that an action is commenced when it is initially filed, rather than when it is removed. However, he found the second issue — “whether an amendment gives rise to a second beginning” — to be “quite thorny.” Instead of finding the most efficient path through the thorns, the court chose to painstakingly consider every path, in its entirety, pursued by previous opinions.

Appropriately, the court began consideration of the commencement issue with the Seventh Circuit’s opinions in Knudsen v. Liberty Mutual (See the CAFA Law Blog summary of Knudsen posted on January 30, 2006) and Schorsch v. Hewlett-Packard (See the CAFA Law Blog summary of Schorsch posted on September 9, 2005). Judge Copenhaver quoted generously from both opinions, being sure to include every portion of the reasoning espoused by the appellate court. The crux of these opinions is that a defendant may be able to remove an action if the plaintiff amends the complaint to include new claims regarding which the initial complaint did not provide some basic notice of the claims to the defendants, or that a new defendant would be able to remove if it is added to the complaint post-CAFA. After further discussion regarding myriad peripheral issues, the court concluded that the amended complaint related back to the original pre-CAFA complaint. Judge Copenhaver reasoned that the removing defendants should have reasonably expected to be added, and thus had notice pre-CAFA, since the original complaint would have identified them but for a clerical mistake.

Ultimately, (and mercifully) the court concluded that the defendants failed to carry their burden of establishing federal jurisdiction under CAFA, and remanded all four cases back to state court.