Patterson v. Dean Morris, L.L.P., 444 F.3d 365 (5th Cir. March 24, 2006).
The U.S. Fifth Circuit Court of Appeals recently issued its first ruling on the Class Action Fairness Act, and showed that it had a little faith in its sister circuits when it found that CAFA’s 60-day appellate review period begins when the Court of Appeals enters an order granting the petition for permission to appeal a district court remand order, rather than from the date the petition for permission to appeal is filed. Circuit Judge Jerry E. Smith first concluded Federal Rule of Appellate Procedure 5 governing “Appeal by Permission” applied to § 1453 (c)(2) appeals. Allowing Rule 5 to lead the way, he concluded that subsection (d)(2) of the rule provided the answer as to when the period should commence. Rule 5(d)(2) states: “The date when the order granting permission to appeal is entered serves as the date of the notice of appeal for calculating time under these rules.” Convinced by the plain language of the rule, the majority lost all faith in the plaintiff’s argument.
In reaching this conclusion, the majority relied heavily on the Ninth Circuit’s recent ruling in Amalgamated Transit Union Local 1309, AFL-CIO v. Laidlaw Transit Services, Inc., 435 F.3d 1140 (9th Cir. 2006) (Editor’s Note: See CAFA Law Blog summary of Amalgamated posted on February 1, 2006). In that case, the Ninth Circuit pored over CAFA’s text and its legislative history before concluding that Federal Rule of Appellate Procedure 5 governs the statute’s new section regarding permissive review of class action remand orders. Referencing the 9th Circuit’s opinion, Judge Smith pointed out that when a party seeks permission to appeal, “there is logically no appeal until the court vested with the authority to grant or deny leave has done so.” Since no appeal exist until the court grants leave to appeal, the 60 day period should not begin until the court issues it order.
Judge Smith also addressed the dissent’s concerns regarding potential abuse by the circuit courts in delaying decisions on whether to grant an appeal indefinitely. However, he and Judge Prado reasoned that abuse could occur under either interpretation of the 60 day period, and concluded that the better course was to “trust the integrity of the courts of appeals to recognize the Congressional directive to handle CAFA appeals expeditiously and in good faith.”
However, Judge Garza was more skeptical, warning: “There is a unique potential for abuse . . . when the sixty-day period begins on the date the appeal is accepted because a circuit court could delay ruling on a CAFA appeal for months.” Moreover, Garza took issue with the majority’s interpretation of § 1453(c)(2). He focused on this phrase from § 1453: “[I]if the court of appeals accepts an appeal under [this subsection], the court shall complete all action on such appeal . . . not later than 60 days after the date on which such appeal was filed.” Judge Garza argued Congress’ choice of the words “accepts” and “filed” in short order implies that a distinction exists which the majority ignored. Without finding that the statute was ambiguous, he buttressed his argument by referencing CAFA’s legislative history, specifically Senator Dodd’s statements describing CAFA’s “tight deadlines for completion of any appeals.” Arguing Congressional intent, the judge concluded that the integrity of courts of appeals was not really the issue: rather, the question presented was whether Congress would have “intended a scheme that includes a simple way to evade those deadlines altogether.”
The Devil is in the Details – Although the opinion was not lengthy, the court covered various issues in footnotes. The court’s stance in one such footnote exposes a potential rift among the circuits over this 60-day window. So far, the Fifth and Ninth Circuits have considered the petition for review of a remand order independently of review of the order itself. However, the Seventh Circuit appears to consider the petition for permission to appeal and the underlying merits of the remand issue together, as the court pointed out in footnote 5.
Another footnote in the majority’s opinion made a key point about timing of appeals. Without wrangling over semantics, the court declared that Federal Rule of Appellate Procedure 26 indicates the seven-day period for seeking appellate review excludes weekends and legal holidays. The court did not discuss CAFA’s language requiring that a party seek review “not less than 7 days” after entry of the district court’s remand order. Instead, the Fifth Circuit pointed to the Ninth Circuit’s ruling in Amalgamated Transit, which declared that the statute was meant to impose a limit of not “more than” seven days.
Editor’s Note: CAFA Law Blog Co-Editor Anthony Rollo and McGlinchey Stafford represent a number of the lender defendants in this multiparty class action. Stay tuned to the CAFA Law Blog for further details on the progression of this litigation.