Plummer v. Farmers Group, Inc., 388 F.Supp.2d 1310 No. CIV-05-242-WH, 2005 WL 2292174 (E.D. Okla. Sept. 15, 2005).
Oklahoma U. S. District Judge Ronald A. White denied the plaintiff’s motion to remand a case removed by the defendant insurance companies under the expanded federal jurisdiction provided by the Class Action Fairness Act of 2005. The two CAFA issues examined by the Court were (1) the date of the commencement of the action, and (2) the amount in controversy. The Court considered whether Plummer’s amending her complaint to add new claims and new plaintiffs, and to add a request for class certification, constituted the “commencement” of a new action, and determined that it did so.
The case was originally on filed August 15, 2003 by Plummer as a single plaintiff case relating to an automobile insurance policy and an insurance company computer program that allegedly undervalued her automobile, resulting in an unreasonably low evaluation of her auto claim. On May 23, 2005, Plummer amended her complaint, seeking class certification under Oklahoma law. The defendants timely removed the action to federal court, claiming federal jurisdiction under CAFA.
Plummer filed her motion to remand on July 7, 2005, arguing that the case was “commenced” by the initial filing of her original complaint prior to CAFA’s enactment, and that CAFA was not retroactive. Plummer also alleged that the changes in the amended complaint related back to her original filing under Federal Rule of Civil Procedure 15(c), so it was not a new action. Finally, she argued that the defendants failed to establish that the amount in controversy exceeded the $5,000,000 minimum necessary to establish federal jurisdiction under CAFA. The defendants countered that the addition of new plaintiffs, new claims and the new request for class certification constituted the commencement of a new action, and that the number of plaintiffs and prayers for punitive damages far exceeded the minimum amount in controversy.
The Court briefly noted that CAFA is not retroactive, and that one of its stated purposes is to extend federal jurisdiction. The Court quickly moved to the primary issue: whether the addition of new claims and new plaintiffs, and a new prayer for class certification constituted the commencement of a new action. The Court agreed with the 10th Circuit’s decision in Pritchett v. Office Depot, Inc., ___ F.3d ___, 2005 WL 1994020 (10th Cir. 2005), but noted that, unlike the Pritchett removal issue, this case turned on an amendment to the original complaint.
Judge White’s analysis then focused on a significant body of law that an amended complaint is tantamount to commencing a new cause of action, and on the language of Federal Rule of Civil Procedure 15, which leads to the same conclusion. Judge White used a four factor inquiry as to whether the addition of class action claims of new plaintiffs related back under Rule 15, and ultimately decided that the amended complaint did not relate back, and was thus the equivalent of filing a new cause of action, citing Knudsen v. Liberty Mutual Ins. Co., 411 F.3d 805, 808 (7th Cir. 2005). Since the date of commencement was the date of the filing of the amended complaint, CAFA applied, and the removal was proper.
Finally, the Court found the plaintiff’s amount in controversy argument unpersuasive after considering the number of insureds who would made up the class and the punitive damages sought by each.
The Court also noted that while several courts have held that one of the stated congressional intents of CAFA was that the named plaintiff should bear the burden of demonstrating that removal was improvident, it was hesitant to reverse long-standing precedent within the 10th Circuit that the party invoking federal jurisdiction bears the burden of demonstrating that federal jurisdiction exists.