In Miedema v. Maytag Corporation the Eleventh Circuit upheld a lower court’s ruling that placed the threshold burden of establishing the existence of minimal diversity jurisdiction under §1332(d)(2) of CAFA upon the removing party, and found that all doubts are to be resolved in favor of remand.  (Editors’ Note:  See the CAFA Law Blog analysis of Miedema posted on August 22, 2006).

The Miedema court cited as support for these propositions three prior appellate decisions that reached the same result: Brill v. Countrywide Home Loans, Inc., 427 F.3d 446 (7th Circuit 2005); Abrego v. Dow Chemical Co., 443 F.2d 676 (9th Cir. 2006); and Evans v. Walter Industries, Inc., 449 F.3d 1159 (11th Cir. 2006).  (Editors’ Note:  See the CAFA Law Blog analysis of Brill posted on November 2, 2005, the CAFA Law Blog analysis of Abrego posted on May 25, 2006; and the CAFA Law Blog analyses of Evans posted on May 25, 2006 and May 26, 2006).

However, for the same reasons explained in our prior critique of Evans (Editors’ Note:  See the CAFA Law Blog critique of Evans posted on May 26, 2006), and our law review article “CAFA’s New Minimal Diversity Standard For Interstate Class Actions Creates A Presumption That Jurisdiction Exists, With The Burden Of Proof Assigned To The Party Opposing Jurisdiction” (Editors’ Note:  See the Law Review article here), we believe that Miedema – like Brill, Abrego, and Evans – is incorrectly decided.

Brill – the first decision on this issue – reached an incorrect conclusion by, among other things, applying an erroneous standard for statutory interpretation, and by completely overlooking Section 2 of CAFA’s text (“Findings and Purposes”).  As a result, Brill concluded incorrectly that no statutory text exists that could possibly serve as a nexus for opening the door to reviewing CAFA’s legislative history on point, which shows that Congress intended to change the traditional burden of proof standard for interstate class actions removed under minimal diversity.  Abrego and Evans are unpersuasive because they simply followed Brill, without any independent analysis.

Miedema does acknowledge the existence of CAFA’s “Findings and Purposes” under Section 2, and notes the critical point that one CAFA purpose stated in its text is to “restore” the intent of the framers of the Constitution “by providing for federal court consideration of interstate cases of national importance under diversity jurisdiction,” for class action cases previously blocked from the federal courts. Section 2(b)(2). The word “restore” in CAFA’s text connotes changes were made in the status quo for removal and jurisdictional rules standards. That and other textual language in Section 2 showing Congress’ intent to liberalize federal jurisdiction over class actions, when contrasted with the traditional removal standard that is strictly interpreted against federal jurisdiction, at least creates ambiguity sufficient enough to open the door to court consideration of CAFA’s legislative history.  Similarly, a fair analysis of all of CAFA’s new removal and jurisdictional provisions, when read together in an integrated fashion, creates further ambiguity in the text that calls appropriately for the courts to study of the legislative history regarding the burden of proof issue.

But Miedema, using artificial distinctions, rejected consideration of the congressional intent on point, and tracking Brill, concluded that if Congress really intended to change the threshold removal burden of proof standard, it would have specifically said so in the statute.  Miedema did not acknowledge the existence of any ambiguities created by Section 2.  It therefore ignored the contrary pronouncements in the Senate Judiciary Committee Report and House Sponsors’ Statement expressly stating that under CAFA the threshold burden of proof falls on the party opposing removal.

The hostility of these courts to a liberalized threshold removal standard under CAFA is indisputably contrary to the clearly expressed congressional statements in the legislative history that CAFA changes the existing removal rule for this special category of cases in order to minimize state court abuses by allowing cases into federal court that previously could not be removed. Brill, Abrego, Evans, and Miedema would not disagree with this proposition – they simply were decided without taking the contrary legislative history into account.

Significantly, on the related question of who bears the jurisdictional burden of proof as to CAFA’s second level abstention analysis under §§ 1332(d)(3) and (4), most courts have been concluding –  without hesitation looking to and relying on CAFA’s legislative history in the Senate Judiciary Committee Report and the House Sponsors’ Statement – that the party asking a court to abstain from exercising minimal diversity once it has been established bears the burden of proving that the abstention exceptions apply. See Hart v. Fedex Ground Package System, Inc. (Editors’ Note:  See the CAFA Law Blog analysis of Hart posted on August 21, 2006); Frazier v. Pioneer America (Editors’ Note:  See the CAFA Law Blog analysis of Pioneer America posted on August 17, 2006); and even Evans, (449 F.3d at 1165).  The same logic, reasoning, and textual ambiguities that opened those door for these courts to go directly to CAFA’s legislative history to affix the burden of proof on the party seeking abstention from federal jurisdiction, similarly support the conclusion that the courts may go to the legislative history to find that Congress intended for CAFA to create a presumption in favor of jurisdiction, with the threshold burden of proof placed on the party opposing jurisdiction.