Knudsen v. Liberty Mutual Insurance Company, No. 05-C-5924, 2005 WL 3454092 (N.D. Ill. Dec. 13, 2005).
On December 13, 2005, U. S. District Judge Ruben Castillo of the Northern District of Illinois ruled that an amended class definition set forth in a state court’s certification order did not commence a new cause of action so as to allow removal under the Class Action Fairness Act of 2005. This was not the first time that Judge Castillo handled this issue in the same case: the plaintiffs had first sued Liberty Mutual in March, 2000, alleging that Liberty Mutual used medical cost databases to reduce medical insurance claim reimbursements. On March 30, 2005, Liberty Mutual filed its first removal of the state court class action to federal court claiming federal jurisdiction under CAFA, and Judge Castillo subsequently granted the plaintiffs’ motion to remand. The Seventh Circuit Court of Appeals then denied Liberty Mutual’s petition for leave to appeal, holding that the amended class definition did not commence a new action, despite Judge Easterbrook’s recognition that there will be situations in which an amended complaint or amended class definition could commence a new suit. (Editor’s Note: See CAFA Law Blog summary of Knudsen 7th Circuit decision posted on September 3, 2005.)

Subsequent to the Seventh Circuit’s ruling, the state court entered another class certification order on September 29, 2005, amending the prior class definition by adding insurance policy holders of Liberty Mutual’s affiliates and subsidiaries. Liberty Mutual then took a second bite at the apple, filing a second removal notice on October 14, 2005, again arguing that the amended class definition added new claims which did not relate back to the original complaint, and so, a new class action case was “commenced” under CAFA. The district court summarized the “commencement law” that has developed since the Seventh Circuit’s original Knudsen decision, and concluded that the amended class definition did not add a new claim for relief; consequently, the court rejected Liberty Mutual’s second removal attempt, and again, granted the plaintiffs’ remand motion.