Comes and Riley Paint, Inc. v. Microsoft Corp., 3 F. Supp. 2d 897, 40No. 05-CV-562, 2005 WL 3454427 (S.D. Iowa Nov. 22, 2005).
In this Southern District of Iowa case, Microsoft Corporation (if you’re tech savvy you may have heard of their chief product called “Windows”) attempted to take advantage of the plaintiffs’ fourth amended complaint (version 4.0) filed after the Class Action Fairness Act’s date of commencement. However, Chief Judge Ronald E. Longstaff’s opinion was not compatible with Microsoft’s argument, and the court held that the civil action commenced in February of 2000 when the software purchasing plaintiffs filed their original complaint in Iowa state court..
Before opening the jurisdictional issues, Judge Longstaff addressed Microsoft’s eagerness in removing the plaintiffs’ fourth amended complaint before the plaintiffs’ revamped pleadings were even accepted by the state court. Although Microsoft did not exactly commit a user error by removing at that time, Judge Longstaff cautioned that such a move jumps the gun and makes it tougher for federal courts to assess whether jurisdiction exists. “Microsoft has created a situation where for purposes of the motion to remand the pleadings must be considered at the time of removal, but at the present time, plaintiffs have modified their complaint so as to remove all content that allegedly provides federal question jurisdiction,” the court noted. “[F]uture litigants and the Court would be better served by waiting until state courts allow amended pleadings before instituting removal actions.”
After the quick training session, the court addressed Microsoft’s assertion that federal jurisdiction was proper due to the federal questions presented in the plaintiffs’ latest version of their complaint. However, the court concluded that broad allegations of violations of federal securities laws and a brief mention of intellectual property did not create federal jurisdiction. The court added that the securities law violations embedded into the code of the plaintiffs’ fourth petition were not related to their claim for relief. Judge Longstaff noted that simply raising a point of federal law in the context of state law claims does not generate federal question jurisdiction, relying on Grable & Sons Metal Prods. v. Darue Eng’g & Mfg., 125 S.Ct. 2363 (U.S. 2005).
Finally, the court directed its browser to the Class Action Fairness Act. Judge Longstaff did not recognize the burden of proof split perpetuated by CAFA, and immediately shouldered Microsoft with the burden of proving removal was proper. Microsoft argued that the plaintiffs asserted “an entirely new claim that ‘does not arise out of the same conduct, transaction, or occurrence as any of the allegedly anticompetitive conduct’ put forth in the previous pleadings.” Judge Longstaff was not persuaded. Relying on the Iowa Rules of Civil Procedure that state a civil action commences upon a filing of a petition to the court, the court held that a civil action can only be commenced once. Reinforcing its reasoning with CAFA’s legislative history, the Iowa district court recognized Congress’s intent to limit CAFA’s application to cases filed after it became effective. Judge Longstaff concluded that the plaintiffs were not seeking to recover on a new claim, and therefore the action commenced long before CAFA became law, precluding removal under the statute. Finding no federal jurisdiction existed, the case was shrink wrapped and shipped back to state court. Shutdown and blue screen of death. Hopefully, Microsoft will have better luck with Windows Vista (whenever it is finally rolled out to the public).