Santamarina v. Sears, Roebuck and Co., No. MDL 1703, 2006 WL 2979396 (7th Cir. Oct. 19, 2006)
How did a California state court action involving claims for alleged violations of the California unfair trade practices act end up in the Seventh Circuit? Well, it all started a long time ago in a far off place. This suit was originally filed in January 2005, alleging that Sears deceptively advertised that certain of its “Craftsman” tools were made exclusively in the USA, when, in fact, some of the tools are manufactured abroad.
Since the suit commenced prior to the effective date of CAFA, Sears found itself a resident at the Hotel California, just dreamin’ about a way out. When the plaintiffs filed an amended complaint, Sears thought they found the ticket and removed to federal court, alleging that the change in the class definition from all those who purchased “Craftsman tools” to all those who purchased “Craftsman branded tool and products” represented a new action permitting removal based on CAFA. The plaintiffs filed a motion to remand which was denied by the district judge in California. After the matter was transferred to the MDL panel in Chicago in November 2005, the plaintiffs sought reconsideration of the remand denial. The district judge in the Northern District of Illinois granted the motion for reconsideration and remanded the case. (Editors’ Note: See the CAFA Law Blog analysis of the MDL decision in Santamarina posted on June 26, 2006).
On appeal, the Seventh Circuit had to hammer out several issues, including whether the Windy City judge should have reconsidered the ruling of the judge from the City by the Bay (or just “the City” to those of you from Northern California). Sears claimed that the it was error for the judge to grant reconsideration because the motion did not meet the standard under Rule 60(b). In a move that would make Patches O’Houlihan proud, the Seventh Circuit dodged this monkey wrench, finding that even though an order denying remand is subject to immediate appeal, it is not a “final” order, and can be reconsidered by the judge if there is a compelling reason (such as clarification of the law). Adding to the jigsaw puzzle, however, the Seventh Circuit noted that Sears did not argue that the plaintiffs’ failure to appeal the original denial to the Ninth Circuit barred appellate review by the Seventh Circuit, leaving a giant question mark next to whether such an argument would have been successful. Indeed, the Seventh Circuit went to lengths to point out that it did not view the denial of remand as a jurisdictional error that can be corrected until the end of the litigation. So, for those of you scoring at home, it looks like Sears may have one more nail left in the gun.
Turning to the merits, the Seventh Circuit did not take much time to saw down Sears’ claim that adding some tools to the box started a new action. The court found that anyone reading either complaint would have known that the fundamental conduct complained of was the same: misrepresentation of the country of origin of Craftsman tools. As a result, the amendment clearly related back to the original pleading and CAFA did not apply. With that, Sears is headed back to California. Remember, when you are at the Hotel California, you can check out, but you can never leave.
(Editors’ Note: If all this talk of tools has your juices flowing and makes you want to build or repair something, then check out Sears’ Craftsman tools here. Just remember. Not all of the tools are made in the USA).
(Editors’ Note: The irony that the plaintiff’s name is Santamarina and the plaintiff complained that Sears’ tools are made outside of the USA is not lost on us).