Adams v. Federal Materials Company, Inc., No. Civ. A. 5:05CV-90-R, 2005 WL 1062378 (W.D. Ky. July 28, 2005).
Kentucky Federal District Judge Thomas B. Russell recently held that CAFA applies when a plaintiff amends a class action complaint to add another defendant to the case after CAFA’s enactment date. The plaintiffs, James Adams et al., filed their class action in March, 2004, against two Kentucky defendants for breach of contract and breach of implied warranties relating to the sale of certain concrete materials. After CAFA was enacted, one of the defendants filed a third party claim against the Rogers Group, and the plaintiffs then amended their complaint to add the Rogers Group as an additional defendant in their class action.
The defendants immediately removed the case to federal court, arguing that there was minimal diversity of citizenship and that the amount in controversy exceeded $5 million, which was sufficient to give the federal court jurisdiction under the Class Action Fairness Act of 2005. The plaintiffs then filed their motion to remand, claiming that the lawsuit was commenced prior to CAFA’s enactment date, and thus, CAFA was inapplicable.
The Court rejected this argument, and denied the plaintiffs’ motion to remand, citing the 7th Circuit’s decision in Knutson v. Liberty Mutual Insurance Company. Judge Russell’s memorandum opinion found that the addition of a new defendant in the case essentially meant that a class action was “commenced” at that time, and thus, CAFA’s jurisdictional and removal rules were applicable.