Anderson v. Bayer Corp., Nos. 10-8003, 10-8004, 10-8005, 10-8006, 2010 WL 2485934 (7th Cir. Ill. June 22, 2010).
In this action the Seventh Circuit affirmed the remand order holding that the plaintiffs could avoid CAFA’s federal diversity jurisdiction by carving their filings into separate pleadings. The court also concluded that all the actions cannot be treated as a single mass action for the purpose of CAFA because the term ‘mass action’ shall not include any civil action in which the claims are joined upon motion of a defendant.
Bayer removed the five separate actions to the District Court, invoking the “mass action” provision of CAFA, which allows the removal of cases joining the claims of at least 100 plaintiffs that otherwise meet CAFA’s jurisdictional requirements.
The District Court remanded four of the five cases because they contained fewer than 100 plaintiffs. While doing so, the District Court rejected Bayer’s argument that all five actions should be treated as a single mass action.
The Seventh Circuit affirmed the order.
Upon appeal, Bayer argued that the plaintiffs could not avoid federal diversity jurisdiction by carving their filings into five separate pleadings. 28 U.S.C. §1332(d)(11)(B)(i) defines a mass action as any civil action in which the monetary relief claims of 100 or more persons are proposed to be tried jointly on the ground that the plaintiffs’ claims involve common questions of law or fact. Under §1332(d)(11)(A), such mass actions shall be deemed to be a class action removable to federal court, so long as CAFA’s other jurisdictional requirements are met.
The Seventh Circuit noted that there was no dispute that the other requirements of CAFA were met in each of the four cases that Bayer appealed. As none of the four cases actually involved the claims of more than 100 plaintiffs, Bayer, argued that the plaintiffs’ five separate pleadings were a transparent attempt to circumvent CAFA, and, as such, should be treated as a single mass action. Bayer relied on Freeman v. Blue Ridge Paper Products, Inc., 551 F.3d 405, 407 (6th Cir.2008) for support. (Editors’ Note: See the CAFA Law Blog analysis of Freeman posted on February 17, 2009).
In Freeman, the plaintiff brought actions breaking up the lawsuit into five actions that had separated the plaintiffs’ claims for nuisance into six-month periods to avoid CAFA’s $5 million jurisdictional amount. Freeman found that there was no colorable reason for breaking up the lawsuits in this fashion, other than to avoid federal jurisdiction, and thus held that the damages sought in each suit must be aggregated for the purpose of determining whether the amount-in-controversy requirement had been met.
The Seventh Circuit observed that Freeman, however, did not address the mass action provision of CAFA. The Seventh Circuit maintained that this distinction was important because §1332(d)(11)(B)(ii)(II) states that the term ‘mass action’ shall not include any civil action in which the claims are joined upon motion of a defendant. The Seventh Circuit remarked that by excluding cases in which the claims were consolidated on a defendant’s motion, Congress appears to have contemplated that some cases which could have been brought as a mass action would, because of the way in which the plaintiffs chose to structure their claims, remain outside of CAFA’s grant of jurisdiction. The Seventh Circuit stated that this is not necessarily anomalous because the general rule in a diversity case is that the plaintiffs as masters of the complaint may include or omit claims or parties in order to determine the forum.
In addition, the Seventh Circuit noted that in Tanoh v. Dow Chemical Co., 561 F.3d 945 (9th Cir.2009), the Ninth Circuit held that none of the seven state court actions involving fewer than 100 plaintiffs could be treated as a single mass action for CAFA purposes. (Editors’ Note: See the CAFA Law Blog analysis of Tanoh posted on August 13, 2009). Like Dow, Bayer here, never formally moved to consolidate the state court cases. Agreeing with the Ninth Circuit’s decision in Dow, the Seventh Circuit found that the mass action provision givves plaintiffs the choice to file separate actions that do not qualify for CAFA jurisdiction; thus, the instant cases were not removable under the plain languge of CAFA . Bayer’s argument that these separate lawsuits be treated as one action was tantamount to a request for consolication – a request that Congress has explicitly stated cannot become a basis for removal as a mass action, the Seventh Circuit remarked.