Meredith v. Clayton Homes, Inc., No. 04050, (W.D. Ark. September 14, 2005).
In this early commencement case, the Western District of Arkansas followed the trail blazed by Pritchett regarding the determination of the “date of commencement” of cases under the Class Action Fairness Act. Arkansas Federal District Judge Harry F. Barnes stayed the course set by Pritchett v. Office Depot (Editor’s Note: See CAFA Law Blog case summary posted on October 23, 2005), following the 10th Circuit’s construction of § 9 of CAFA in adjudicating whether this class action was commenced before CAFA’s effective date.
The defendant, CMH Homes, Inc. (CMH), removed the action, arguing complete diversity jurisdiction under §1332, and alternatively, federal jurisdiction under the minimal diversity standards first provided by CAFA. In its rather unique factual argument, CMH maintained that inconsistencies in the time stamp on the plaintiff’s pleadings indicated that the complaint was actually filed on February 18, 2005, the effective date of CAFA, instead of the previous day as claimed by the plaintiffs. However, based on affidavits from the Clerk of Court’s office, Judge Barnes did not find the defendant’s arguments about the date inconsistencies compelling, and concluded that the class action was in fact originally filed on February 17, 2005, in the Circuit Court of Miller County, Arkansas.
Judge Barnes then addressed the construction of the meaning of “commenced” under CAFA. Using Pritchett as his guide, the court noted that an action is commenced pursuant to CAFA when the complaint is filed in state court, not when it is removed to federal court, pointing to the statutory construction analysis used in Pritchett and the statements of Senator Dodd and Representative Goodlatte to bolster his argument that CAFA has no retroactive effect. In rejecting CMH’s argument that a new case is commenced upon removal, the court stated that it could “not ignore the solid legal analysis of Pritchett and decide it has jurisdiction over this case.” As further justification for his conclusion, Judge Barnes pointed out that the Eighth Circuit had recently denied a Petition for Permission to Appeal the district court’s similar remand decision in Lane’s Gifts and Collectibles, L.L.C. v. Yahoo!, Inc., 05-CV-4027, perhaps tacitly agreeing with Pritchett. Since the action was filed and thereby “commenced” in state court on February 17, 2005, one day before CAFA became law, the claims could not be removed under CAFA. Due to CMH’s failure to prove federal jurisdiction over the claims, the court remanded the action back to state court.