Santamarina v. Sears, Roebuck & Co., No. MDL-1703, 2006 WL 1517779 (N.D. Ill. May 24, 2006).
In this class action originating in California state court, patriotic tool consumers alleged Sears sold them foreign-made tools while deceptively advertising its Craftsman line of tools as being made exclusively in the USA. The plaintiffs, who are rumored to have spontaneously broken into Lee Greenwood’s patriotic anthem “Proud To Be An American” while filing the class complaint in January of 2005, asserted claims of consumer fraud violations against the retailer on behalf of “all person who purchased Craftsman tools in the State of California from January 6, 2001 through the present.” On March 24, 2005, the plaintiffs amended their complaint, asserting the same claims of consumer fraud, but also broadening the class definition to include “all persons who purchased Craftsman branded tools and products in the State of California from January 6, 2001 through the present.” Based on this modification, Sears (showing its softer side) removed the case alleging the amendment commenced a new action post-CAFA. (Editors Note: The plaintiffs’ symbolic statement of filing an amendment on March 24 was not missed by the astute editors of this blog – on March 24, 1898, Robert Allison of Port Carbon, Pennsylvania became the first person to buy an American-built automobile.)
Not surprisingly, going from “tools” to “tools and products” just didn’t do it for the district judge, who nailed the burden of establishing federal jurisdiction under CAFA to Sears, thanks to the Seventh Circuit’s opinion in Brill v. Countrywide Home Loans. (Editor’s Note: See the CAFA Law Blog summary of Brill posted on November 2, 2005). Addressing the commencement issue, District Judge John F. Grady decided that the post-CAFA expansion of the class definition did not create federal jurisdiction under the statute. The court cut through now-familiar Seventh Circuit turf, recognizing that an action “commences” when it is filed in state court, tapping into the Seventh Circuit’s opinion in Knudsen v. Liberty Mutual Insurance Co., for guidance. (Editors’ Note: See the CAFA Law Blog summary of Knudsen posted on September 3, 2005). While Judge Grady acknowledged an amendment could commence a new suit if it is “sufficiently independent of the original contentions,” he used the straight edge of Schorsch v. Hewlett-Packard Co., to conclude the newly-added language of “and products” concerned the same transaction or occurrence as the one involved in the original suit. (Editors’ Note: See the CAFA Law Blog summary of Schorsch posted on September 4, 2005). “It is an extreme exaggeration to say that the amended complaint in this case “greatly expanded” the scope of the putative class,” the court noted, saying the amendment was your basic “workaday change routine in class suits.” Using every tool in the tool box the Seventh Circuit provided him, Grady made clear it did not matter that the amendment added new plaintiffs, referencing Philllips v. Ford Motor Co., wherein the circuit court held that “amending a state-court class action to add or substitute plaintiffs did not ‘commence’ a new case under CAFA.” (Editors’ Note: See the CAFA Law Blog summary of Phillips posted on February 6, 2006).
Since the case was originally filed in California state court but was transferred to Illinois federal court as a result of multi-district litigation, Judge Grady’s relation back conclusion addressed both California and Illinois state law. “California is similar to federal and Illinois law; an amended complaint relates back to the original when it is based on the same general set of facts, seeks relief for the same injuries, and refers to the same incident.” The court concluded all three were satisfied when considering the amendment. Thus, the court remanded the action back to California state court.
Addressing one final issue, Judge Grady put away the nail gun when weighing whether to award plaintiffs attorney’s fees in contesting the removal. Since CAFA was on the books only a month before Sears removed the case, he decided it would not be fair to say the strategy “lacked an objectively unreasonable basis” – thus no attorney’s fees for the plaintiffs.