Spivey v. Vertrue, Inc., No. 08-8009 (7th Cir. June 11, 2008).

As always, we at the CAFA Law Blog are monitoring the CAFA cases just for you. In the Spivey case, the Seventh Circuit picked up the appeal and made a fantastic reference to Animal Farm while reversing the District Court. Great job Judge Easterbrook!

Quinten Spivey filed suit in state court as the named representative of a class claiming that the defendant, Vertrue, systematically submitted unauthorized charges on the plaintiffs’ credit cards through 22 of Vertrue’s programs. Vertrue removed to federal court under CAFA. 

Natually, Spivey moved to remand on the contention that the $5,000,000 amount in controversy requirement was unsatisfied. The district judge agreed and remanded the case. (Editors’ Note: See the CAFA Blog analysis of the District Court opinion posted on July 1, 2008). 

Vertrue filed a petition for leave to appeal. Vertrue’s lawyer mailed the petition on the seventh day after the district court’s remand order, and the petition reached the Seventh Circuit Court of Appeals and was “filed” on the tenth day after the district court’s order. Spivey contended that the Court lacked jurisdiction because Vertrue’s lawyer failed to adhere to the proscribed time period under 28 U.S.C. § 1453(c)(1). 

Section 1453(c)(1) provides that “a court of appeals may accept an appeal from an order of a district court granting or denying a motion to remand a class action to the State court from which it was removed if application is made to the court of appeals not less than 7 days after entry of the order.” The Court found that the petition was timely under that language. Spivey argued that the law could not mean what it says, rather someone must have intended to write either “not more than 7 days,” or “not later than 7 days” or “within 7 days” because time limits for appeals always set the last date allowed for action. 

The Court noted that section 1453(c)(1) had attracted considerable attention from both judges and law reviews, but no technical-corrections bill has yet to be enacted by Congress. Pew v. Cardarelli, 2008 U.S. App. Lexis 10269 at *6-7 (2d Cir. May 13, 2008); Morgan v. Gay, 466 F.3d 276, 277 (3d Cir. 2006); Amalgamated Transit Union v. Laidlaw Transit Services, Inc., 435 F.3d 1140, 1146 (9th Cir. 2006); Pritchett v. Office Depot, Inc., 420 F.3d 1090, 1093 n.2 (10th Cir. 2005); Miedema v. Maytag Corp., 450 F.3d 1322, 1326 (11th Cir. 2006).   (Editor’s Note: See the CAFA Blog analysis of Pew posted on August 20, 2008, Morgan with the district court opinion analysis posted on October 24, 2006, the first Third Circuit opinion analysis posted on December 7, 2006 and the second Third Circuit analysis posted on January 19, 2007. Also, see the CAFA Law Blog  analysis of Amalgamated Transit Union posted on June 6, 2006 and the analysis of Pritchett posted on October 23, 2005. Finally, the CAFA Law Blog analysis of Miedema posted on August 22, 2006.  See also the CAFA Law Blog critique of the Miedema decision posted on August 22, 2006). 

In reviewing Pew, Morgan, Laidlaw Transit Services, Pritchett, and Miedema, the court stated that “less” should be read as “more,” since the “less” fit with the norm in appellate deadlines and the likely goal of the legislature (to compel prompt action that would resolve which court will conduct the litigation). The Court also noted that if “less” really meant “less” then the party displeased by the remand could appeal with no time limitation under §1453(c)(1). Despite the interpretation problem, the Court believed that turning “less” into “more” would be a feat more closely associated with the mutating commandments on the barn’s wall in Animal Farm than with sincere interpretation. (Squealer and Napoleon would not be proud!)

While the Court agreed with its sister circuits holding that a petition filed within seven days of the district court’s order should be accepted; it disagreed to the extent that language in their opinions implied that a petition filed on the eighth day would be irreparably late. Further, the Court noted that none of the other circuits cited had dismissed a petition as untimely. 

Although it assumed that many members of Congress wanted a short deadline for appeals, the Court stated that it could not use legislative history to justify a reading of the statute to mean the opposite of what it says. The court interpreted the open-ended phrase “not less than 7 days” to mean that there was no terminal date for appeal, and relied on Federal Rule of Appellate Procedure 5(a)(2) to cap the time to appeal at 30 days. While their interpretation allowed a party 23 days more than the authors anticipated, the Court’s reading avoided surprises to litigants who believed that courts would honor the language of the bill. As a result, the Court found that Vertrue’s petition was timely, and accepted the appeal. The district court’s decision was therefore, reversed and the case remanded on the merits to federal court.