Kitson v. Bank of Edwardsville, 2008 WL 4671743 (S.D. Ill., October 21, 2008)

Readers, feast upon the following nuggets of legal wisdom. . .

1.        CAFA is required reading for all who engage in class-action litigation.

2.        The Court rejected the argument that the statute cannot mean what it says.

3.        Congress writing a deadline imprecisely, or even perversely*, is not a sufficient reason to disregard the enacted language.

4.        CAFA is written for judges and lawyers.

5.         Judicial investigation of legislative history has a tendency to become an exercise in looking over a crowd and picking out your friends.

6.         CAFA properly understood is a manual on how to invoke or avoid federal jurisdiction

Yes, readers, it’s all true. In a long-awaited and landmark decision, Kitson v. Bank of Edwardsville, the United States District Court for the Southern District of Illinois found CAFA“is required reading for all who engage in class-action litigation.”

Our analysts are on the edge of their ergonomic seats wondering when the Supreme Court will realize that statement is WAY out of line and overrule it! The Court also found “. . .CAFA is written for judges and lawyers . . .” Sorry, Britney, put down that copy of Public Law 109-2!

But did the Court say anything about CAFA other than we should read it? Yes, but not before expressing its frustration with the on-again, off-again relationship it has with this case and reciting its loooong procedural history.

Let’s just say neither Jennifer Aniston & John Mayer nor Kate Hudson & Owen Wilson have anything on the ménage a trois between Kenneth Kitson, Harland Financial Solutions (HFS) & the Southern District of Illinois. (Practice Note: Do not drive a Court to the point of having to say such things about your case as “this is the second time this Court has seen this case” and “it is remarkable this case is here” and “this is not a close case.”) 

Anyway, after being dumped by the federal court (“It’s not you. It’s the CAFA local controversy and home-state exceptions.”), HFS was drowning its sorrows in state court when HFS got dumped again by Kitson’s voluntary dismissal. The case lived on while Kitson focused all of his attention on the other woman, the Bank of Edwardsville (BOE). Before ditching BOE, Kitson (that playah) tried to get back together with HFS (HFS – Please read He’s Just Not That Into You by Greg Behrendt) by amending his complaint to assert additional claims bringing HFS back into the litigation. HFS re-removed the case to federal court under CAFA, arguing the local controversy exception still applied.  

Those of you who have completed the Southern District of Illinois’ Summer 2009 required reading list (i.e. read CAFA), know that in order for a Court to abstain under the local controversy exception, § 1332(d)(4)(A)(ii) requires “during the three year period preceding the filing of that class action, no other class action has been filed asserting the same or similar factual allegations against any of the defendants on behalf of the same or other persons." 

At issue was whether Kitson’s claim against HFS was a new claim or a re-commencement of the original claim. If Kitson’s claim against HFS was a new claim, then (A)(ii) would prevent the Court from applying the local controversy exception and HFS could stay in federal court. If Kitson’s claim against HFS was a re-commencement of the original claim, then (A)(ii) would be satisfied and the local controversy exception would otherwise apply and Kitson could go back to state court. 

And here, readers is what you’ve been waiting for – what brought on the nuggets of legal wisdom we listed at the beginning of this blog. Kitson tried to argue that (A)(ii) doesn’t mean what it says!!   Rejecting plaintiff’s citations of post-enactment legislative history (Remember our earlier practice tip . . .Do Not Annoy the Court), the Court quickly found “Subpart (ii) of the local controversy exception is clear.”  The Court found Kitson not only commenced a new action in filing the amended complaint, but within the amended complaint he asserted an entirely new claim against HFS.

With a harsh slap on the wrist, the Court reprimanded “It seems axiomatic that the filing of the amended complaint commenced a new action-that is what triggered HFS’s filing of the notice of removal in the first instance. This is not a close case.”

Cliff Notes version: (1) Amended complaint which commences new action = new action = 1332(d)(4)(A)(ii) not satisfied = no local controversy exception = HFS finally gets its revenge and stays in federal court under CAFA! (2) Read CAFA. (3) Do not annoy the Court.

Since all our readers have surely completed the United States District Court for the Southern District of Illinois’ required reading list (though we reproduced it for your convenience) we are proud to present the Official CAFA Law Blog Summer 2009 Required Reading List. the 4th of July is right around the corner! Won’t you look cool in your designer sunglasses hanging with all the beautiful people on George Clooney’s yacht in Lake Como reading these?

Official CAFA Law Blog 2009 Summer Required Reading List

1.         Sheila B. Scheuerman, Two Worlds Collide: How The Supreme Court’s Recent Punitive Damages Decisions Affect Class Actions, 60 Baylor L. Rev. 880 (2008).

2.         Dan Markel, Retributive Damages: A Theory Of Punitive Damages As Intermediate Sanction, 94 Cornell L. Rev. 239 (2009).

3.         Rachel K. Alexander, Federal Tails And State Puppy Dogs: Preempting Parallel State Wage Claims To Preserve The Integrity Of Federal Group Wage Actions, 58 Am. U. L. Rev. 515 (2009).

4.         Katherine L. Floyd, The One-Year Limit On Removal: An Ace Up The Sleeve Of The Unscrupulous Litigant?, 24 Ga. St. U. L. Rev. 1073 (2008).

5.         Warren R. Stern & S. Christopher Szczerban, Removal Of Securities Class Actions Under CAFA: Katz V. Gerardi,  2 Sec. Litig. Rep. 10 (2009).

6.         The Class Action Fairness Act: Recent Developments, 1728 Practicing Law

            Institute Corporate Law and Practice Course Handbook Series 81 (2009).

USDC, Southern District of Illinois, Summer 2009 Required Reading List

1.         CAFA


Enjoy! And don’t forget to send Britney your copies when you’re through!


By: I. Hafta Cafa



* One can’t help but wonder what one of our more immature analysts, the author of the award-winning post “CAFA is BOOTYlicious! The Curious Case of Levy v. Keystone” would have to say about the Court using the word  perversely” in an opinion. I. Hafta Cafa is much too mature for such antics.