Prime Care of Northeast Kansas, LLC v. Blue Cross and Blue Shield of Kansas City, Inc., No. 05-2227 (D. Kan. Nov. 17, 2005).
In this class action filed by physicians against insurance companies alleging price fixing and conspiracy to monopolize in violation of Kansas law, the insurance companies attempted to follow the yellow brick road constructed by the Class Action Fairness Act into federal court by claiming that the action did not commence until they were added as defendants. Relying on directions provided by the Lollipop Guild, the defendants alleged that the action commenced April 26, 2005, upon the filing of the plaintiffs’ fifth (that’s not a typo) amended petition. However, with the support of the Wicked Witch of the West, the physicians argued that the case was “commenced” for CAFA purposes with the filing of the original complaint in Kansas state court on February 14, 2005.
U. S. District Judge Kathryn H. Vratil (we were tempted to address Her Honor as the Wizard, but refrained) first considering the defendants’ argument that CAFA shifts the burden to the plaintiff “to prove that removal was improvident.” After noting that CAFA was silent on the issue, she discussed the split among courts regarding the burden of proof issue, summarizing arguments on both sides of the fissure. However, she seized on the Tenth Circuit’s opinion in Pritchett v. Office Depot, Inc., (See CAFA Law Blog’s summary posted October 23, 2005) in which the Tenth Circuit panel found CAFA’s legislative history “too general” to transfer the burden to the party opposing removal. Thus, following the Tenth Circuit’s directives on the issue, Judge Vratil placed the burden on the defendants to prove federal jurisdiction and promised to strictly construe the removal statute, resolving all doubts against removal.
Pritchett also decided the commencement issue. Judge Vratil began her analysis of the commencement issue by stating, “[i]n Pritchett, the Tenth Circuit found that under the general federal rule, a lawsuit is commenced at a discrete moment in time: then the original complaint is filed in a court of competent jurisdiction.” Referencing the Pritchett court’s finding that CAFA’s legislative history “suggested a Congressional intent to exclude currently pending suits,” the court concluded that the action commenced on Valentine’s Day, when the plaintiffs filed their original complaint.
Pleading for an audience with the Wizard (OK, there, we did it), the defendants attempted to persuade Judge Vratil by directing her to the Seventh Circuit’s opinion in Knudsen v. Liberty Mutual Ins. Co., (See CAFA Law Blog’s summary of Knudsen I posted September 3, 2005) in which the Seventh Circuit “suggested that certain amendments, such as adding a defendant, might commence a new civil action for purposes of CAFA.” Judge Vratil’s compassionate response: “The Court is unpersuaded.” The court concluded that due to the action’s pre-CAFA commencement, federal jurisdiction could not be established under CAFA. After also finding that federal question jurisdiction had not been established, the court found that the case should be remanded back to state court.
With plenty of courage, but perhaps in need of a heart (we decline to address the brain component), the plaintiffs moved for an award of attorney’s fees incurred in defending the removal. However, Judge Vratil (perhaps reminiscent of Glenda, the Good Witch, at least for the defendants in this aspect of the case), found that such an award was not warranted due to the conflicting case law surrounding the recent enactment of CAFA. Not wanting to walk all the way back to state court in heels, and finding that the “click click” doesn’t work as well barefoot, the defendants began their trip back home with their ruby slippers in one hand and a disgruntled Toto (the dog, not the rock group) under the other arm.