Eleanor Abraham, et al v. St. Croix Renaissance, Group, L.L.L.P., 719 F.3d 270 (3d Cir. 2013).

In this appeal, the Third Circuit held that CAFA’s phrase “an event or occurrence,” as it appears in the mass-action exclusion, is not limited to something that happened at a particular moment in time.

 The plaintiffs, more than 500 Virgin Island residents, brought suit in the Superior Court of the Virgin Islands, asserting claims for abnormally dangerous condition, public nuisance, private nuisance, intentional infliction of emotional distress, negligent infliction of emotional distress, and negligence arising out of the defendant’s ownership interest of an alumina refinery on the south shore of St. Croix.  

The defendant purchased the refinery in 2002.  The plaintiffs contended that for more than thirty years the refinery refined a red ore which created enormous mounds of “red mud.”  At times, the mud was as high as 120 to 190 feet and covered up to 190 acres of land.  According to plaintiffs, this “red mud” released hazardous materials into the community including: chlorine, fluoride, TDS, aluminum, arsenic, molybdenum, selenium, coal dust, and friable asbestos.  The plaintiffs averred that the defendant’s improper maintenance of the refinery caused them to sustain damages. 

The defendant removed the action from the Superior Court of the Virgin Islands to the District Court asserting that plaintiffs’ claims qualified as a mass action.  When more than 100 cases sharing common issues of fact or law are proposed to be tried jointly, they may be removed under the mass action exception.  There are many nuances to this requirement.  Most importantly, jurisdiction does not exist under the mass action provisions of the Act unless the “mass action” definition is first satisfied. CAFA excludes from the definition 

any civil action in which – (I) all of the claims in the action arise from an event or occurence in the state in which the action was filed, and that allegedly resulted in injuries in that State or in the States contigous to that State.  

28 U.S.C. § 1332(d)(11)(B)(ii)(I).  In line with this exception, plaintiffs argued that their claims did not qualify as a mass action becuase they arose from a single event or occurent in St. Croix and caused injury and damages to their persons and property in St. Croix.  The District Court agreed and granted the plaintiffs’ motion.  The case was remanded  to the Superior Court of the Virgin Islands.  Upon the defendant’s appeal, the Third Circuit affirmed the District Court’s decision. 

For the Third Circuit, the issue boiled down to the meaning of the phrase “an event or occurrence” as it appears in the mass action exclusion.  With any issue of statutory interpretation, courts are to determine if the language at issue has a plain meaning.  The defendant relied heavily on the plain meaning of the article “an” that precedes “event or occurrence” in §1332(e).  In the defendant’s view, this “an” before “event or occurrence” excluded injuries that did not result from a single discrete incident.  Because the claims were based on the plaintiffs continued exposure to hazardous substances, the defendants argued that there was not once single discrete incident.    

The Third Circuit acknowledged that the article “an” is singular in nature.  However, the Court’s anaysis did not end there.  The Court also determined the meaning of the phrase “event or occurrence.”  The Third Circuit found that in common place, neither the term “event” nor “occurrence” was used to solely refer to a specific incident that could be definitely limited to an ascertainable period of minutes, hours or days.  The Court explained, for example, that the Civil War is a defining event in history although it spanned over a four year period and involved many battles.  Because the words “event” and “occurrence” did not commonly or necessarily refer to what transpired at an isolated moment in time, the Third Circuit remarked that there was no reason for it to conclude that Congress intended to limit the phrase “event or occurrence” in § 1332(d)(11)(B)(ii)(I) in that fashion.  Accordingly, the Court reasoned that where the record demonstrated circumstances that shared some commonality and persisted over a period of time, those could constitute “an event or occurrence” for purposes of the exclusion in § 1332(d)(11)(B)(ii)(I). 

As a matter of public policy, the Third Circuit noted that congress contemplated that some “mass actions” are better adjudicated by the state courts in which they originated.  The “event or occurrence” exclusions for mass actions, as well as the local-controversy and homes-state exceptions in § 1332(d)(4)(A) and (B) for class actions assure that aggregate actions with substantial ties to a particular state remain in the courts of that state.  Notably, the local-controversy and home-state exceptions are quite different.  The Third Circuit explained that in light of the statutory structure of CAFA, the exceptions and the exclusion have to be different because a “mass action,” to be removable, must meet the provisions of § 1332(d)(2) through (10).  This meant that to be removable a mass action must present something other than a uniquely local controversy that may not be removed under either the local-controversy or home-state exception in § 1332(d)(4)(A) and (B), respectively.  The Third Circuit remarked that if the mass action complaint pleads neither a local-controversy nor a home-state cause of action under subsection (d)(4), it may be removed unless the “event or occurrence” exclusion in subsection (d)(11)(B)(ii)(I) applies. 

The Third Circuit observed that the local-controversy exception contained broad language instructing a district court to decline to exercise jurisdiction where the “principal injuries resulting from the alleged conduct or any related conduct … were incurred in the State in which the action was originally filed.”  The Third Circuit opined that the use of this broad language in the local-controversy exception for class actions and not in the mass-action exclusion might suggest that Congress intended to limit the mass-action exclusion to claims arising from a discrete incident. 

Accordingly, the Third Circuit concluded that the District Court did not err in its interpretation of “event and occurrence.”  Rather, the Third Circuit agreed with the District Court that the complaint was not a removable “mass action” because all of the claims in the action arose from an “event or occurrence” that happened in the Virgin Islands and that resulted in injuries in the Virgin Islands. 

Accordingly, the Third circuit concluded that the District Court appropriately remanded the action to the Superior Court of the Virgin Islands.

In short, on its face, a continuing set of circumstances will likely qualify as an “event or occurrence.” Moving forward, parties wishing to utilize the mass action exception should  identify separate and discrete incidents giving rise to the claims.