“No Particular Place To Go:” GM’s Dex-Cool litigation has nowhere to go in federal court due to the 7th Circuit’s denial of the corporation’s request to appeal the district court’s remand order under the Class Action Fairness Act

By McGlinchey Stafford on August 14, 2006

Natale v. General Motors Corp., No.: 06-8011, 2006 WL 1458585 (7^th Cir. 2006).

One of the interesting parts (and there are many) of providing up to date CAFA developments to our brilliant and extremely good-looking readers is following certain cases through the court system. This particular body (car body, that is) of litigation has enjoyed quite a road trip. Beginning in Massachusetts state court, GM removed the case to the district court in Massachusetts where it was picked up by the MDL panel who drove it to the Southern District of Illinois. That’s where we picked up on the Illinois federal court’s decision to remand the case back to Massachusetts state court in a post referencing the Chuck Berry classic “Maybelline.” Take a look at our analysis of In re: General Motors Corp. Dex-Cool Products Liability Litigation posted April 26, 2006. So, when we picked up on the Seventh Circuit’s denial of GM’s petition for appeal of the remand order, we decided to bring Mr. Berry back for an encore.

The issue driving this dispute into the Seventh Circuit revolved around the amendment of the plaintiffs’ pre-CAFA complaint substituting a new named plaintiff after CAFA became law. Apparently GM determined the initial named plaintiff was riding along in the wrong automobile, or at least the wrong year model. Due to this roadblock of the named plaintiff not having a valid claim, the plaintiffs attempted to slide another named plaintiff behind the wheel, post-CAFA. GM tried to take advantage of this bump in the road by arguing the post-CAFA substitution commenced a new action and could therefore be removed under CAFA. The district court didn’t agree.

The Seventh Circuit began by running over the plaintiffs’ argument that GM failed to file a timely petition for appeal because it did not file within the 7 days required by 28 U.S.C. section 1453(c)(1). However, GM didn’t file within 7 days because it filed a motion for reconsideration of the remand order, thus putting the 7 days on hold until the motion was denied. The court relied on FRAP 4(a)(4) providing that the time limit on an appeal runs from an order resolving a post-judgment motion. Thus, GM was justified in waiting until the post-judgment motion was resolved before filing its petition requesting appeal.

Reaching the commencement issue, the court referred to Massachusetts Rule of Civil Procedure 3 to determine when the action commenced in Massachusetts state court. Because the rule only required filing of a complaint to commence a suit, the suit commenced pre-CAFA. Further, since the case was still rollin’ and had not been dismissed when GM was served with the amended complaint, the Seventh Circuit concluded the new complaint had a pre-CAFA complaint to relate back to. Finally, GM argued it should be given the chance to appeal the district court’s denial of it motion to conduct discovery showing the original plaintiff was inappropriate. However, relying on Phillips v. Ford Motor Company, the court reasoned that even if the plaintiff was improper, as in Phillips, substituting a new named plaintiff for an inappropriate named plaintiff does not commence a new suit for CAFA purposes. (Editors’ Note: See the CAFA Law Blog’s analysis of Phillips posted February 6, 2006). So, it looks like GM will be cruisin’ and playin’ the radio all the way back to Massachusetts state court.