In re Light Cigarettes Mktg. Sales Practices Litig., No. 1:09-md-02068-JAW, 2010 U.S. Dist. LEXIS 124261 (D. Me. Nov. 22, 2010).
In this action, a district court remanded the case to the state court finding that the Second Amended Complaint merely included a defendant, who could have otherwise been a part of original complaint, which was filed before the enactment of CAFA.
In 2003, the plaintiff in this case, Loretta Lawson, brought an action in a Circuit Court of Pulaski County, Arkansas alleging that the defendants, Philip Morris Companies, Inc. and Philip Morris Incorporated, misrepresented the health risks of light cigarettes stating that they were less harmful than regular cigarettes in violation of various laws of different states. (Come on. Smoking is smoking. You are really worried about it being less harmful than it already is?)
Just over a month later, Ms. Lawson filed her First Amended Class Action Complaint (“FAC”), adding Lisa Watson as a named plaintiff. The defendants then removed the case to the federal court, and for many years, the parties litigated the jurisdictional dispute in the federal court. This action was stayed until December 15, 2008.
On April 15, 2010, Ms. Watson filed a Second Amended Complaint (“SAC”) in the Pulaski County Court to add Wayne Miner and James Easley as named plaintiffs, and a new defendant Altria Group, Inc. The defendants filed their second notice of removal, and the United States Judicial Panel on Multidistrict Litigation transferred the case to the District of Maine for inclusion in MDL No 268. The plaintiffs filed their motion to remand.
The plaintiffs argued that the defendants based their removal on CAFA, however, CAFA was applicable to civil actions commenced on or after CAFA’s enactment on February 18, 2005, and as such CAFA was not applicable to this case. The plaintiffs contended that they did not add a class representative to an already existing class action nor did they name a defendant they failed to previously serve, therefore, they did not commence a new action in filing SAC.
The District Court observed that in Green v. Wiggins, 304 Ark. 484 (1991), the Arkansas Supreme Court held that an action is commenced by filing a complaint and completing service upon a defendant in accordance with the Arkansas Rules of Civil Procedure. The Supreme Court observed that although, commencement of an action was subject to the completion of service, the date of commencement was based on the date the complaint was filed.
In this case, four complaints were filed: (1) Ms. Lawson’s original complaint on April 18, 2003; (2) her FAC to include Ms. Watson over one month after the original complaint; (3) Mr. Miner’s original complaint on December 29, 2004; and (4) the SAC filed by Ms. Watson to include Mr. Miner and Mr. Easely as name plaintiffs, and Altria as a new defendant on October 18, 2010. Therefore, only the SAC was filed after CAFA’s effective date.
The Court noted that Arkansas relation back doctrine codified as Ark. R. Civ. P. 15(c), which specifies circumstances under which an action could be related back to the original complaint, was at the heart of the parties’ dispute. Rule 15(c) closely tracked the language of Fed. R. Civ. P. 15(c).
The defendants cited to Bryant v. Hendrix, 375 Ark. 200 (2008), and Dachs v. Hendrix, 2009 Ark. 542 (2009) in support of its contention that amendments adding plaintiffs did not relate back to the original complaint. Bryant dealt with an amendment wherein a proper plaintiff substituted an original improper plaintiff, who was either non-existent or lacked standing; and in Dachs, the Arkansas Supreme Court held that a proper plaintiff’s time-barred survival and wrongful death claim could not relate back to a previous complaint failed by a plaintiff who lacked standing to assert survival and wrongful death claims.
The Court remarked that both Bryant and Dachs were distinguishable because, here, there was no allegation that the plaintiffs who filed pre-CAFA complaints lacked standing; in fact, even the SAC did not replace the original plaintiffs with entirely new plaintiffs, but merely joined additional analysis, there a different analysis was required in this case.
The Court noted that Rule 15(c)(1) provides that an amendment of a pleading relates back when the claim asserted in the amended pleading arose out of the conduct, transaction, or occurrence set forth or attempted to be set forth in the original pleading. The Court also noted that in Carson v. Merrill Lynch, Pierce, Fenner & Smith, Inc., No. Civ. 97-5147, 1998 U.S. Dist. LEXIS 6903 (W.D. Ark. March 30, 1998), the district court applied Fed. R. Civ. P. 15(c)(1)(B)–the federal analogue to Arkansas Rule 15(c)(1)–to similar facts, and refused to apply the federal analogue to Arkansas Rule 15(c)(2) to an amended complaint substituting one lead plaintiff for another in a class action. Rule 15(c)(2) relates to an addition of party who was mistakenly not included into the action in the first complaint. The Carson Court reasoned that, because the original complaint put defendants on notice that there were other members of the class who were asserting the same claim, the court need only determine whether the amended claims arose out of the same conduct, transaction, or occurrence as did the original claims. The court held that the amendment related back because it changed nothing but the named plaintiffs.
Having determined the standard, the Court next observed that deciding factor was whether naming of Altria as a defendant in the SAC commenced a new action. The Court noted that as an initial matter, Arkansas law clearly established that SAC did not commence a new action against Altria, if Altria was not served in compliance of Rule 4(i)–by serving Altria within 120 days of filing the SAC. In other words, a new action would have commenced if plaintiffs had served Altria within 120 days after filing the SAC. Because they did not, plaintiffs contended that no new action commenced. The Court remarked that this was not the end of the analysis, i.e., the question still remained whether Altria was a party to the pre-CAFA complaints such that it would remain a party to the litigation despite not being served with the SAC.
Here, the Court remarked that it had already concluded that the first element, i.e. 15(c)(1), was met because the claim asserted in each of the complaint arose out of the conduct, transaction, or occurrence, set forth in the original pleading. Therefore, the resolution came down to whether, within the time period provided by 4(i), Altria received such notice of the institution of the action that it will not be prejudiced in maintaining a defense on the merits and that it knew or should have known that but for a mistake concerning its identity, the action would have been brought against it according to Rule 15(c)(2). After an examination of the information made known to and acknowledged by Altria within the period provided by Rule 4(i), the Court found that Altria had notice of the suit such that it will not be prejudiced in its defense. Altria could not use the plaintiffs’ service upon the wrong agent in 2003 to deny notice.
Because the plaintiffs’ SAC related back to the FAC, which was filed before CAFA’s effective date, the Court concluded that CAFA did not apply in this case to the SAC, and accordingly, remanded the case to the Arkansas state court.