Dudley-Barton v. Serv. Corp. Int’l, No. 11-1248, 2011 WL 3199523 (10th Cir. Colo. July 28, 2011).

In this case we have a simple burial of a funeral operator’s appeal. The Tenth Circuit held that the voluntary dismissal of a lawsuit after remand to state court moots the appeal of the remand order because the jurisdiction of federal courts are limited to live controversies that exist at all stages of litigation, including appellate review.   (Editors’ Note:  See the CAFA Law Blog analysis of the District Court decision in Dudley posted on July 11, 2011).

The plaintiffs brought a class action lawsuit against Service Corporation International (“SCI”), a large, multi-state funeral home operating company, based on its allegedly unlawful employment practices and policies.

The plaintiffs sought to recover unpaid wages based on SCI’s purported failure to compensate its employees for (1) time spent engaging in community work outside of regular employment hours;

(2) time spent handling phone calls and other work-related issues after normal business hours; (3) time spent working through meal breaks; and (4) overtime hours worked.

Shortly after the plaintiffs filed their complaint, SCI removed the case to federal court pursuant to CAFA.

The plaintiffs then filed a motion to remand, which the District Court granted concluding that SCI had not established that the amount in controversy exceeded the $5 million jurisdictional threshold required under CAFA.

SCI timely appealed, and before the Tenth Circuit could say, “I see dead people” and before it  could grant the leave to appeal, the plaintiffs filed in state court a notice voluntarily dismissing their claims against SCI without prejudice. (Sneaky undertakers, huh?)

The state court dismissed the case that same day.

Later, the Tenth Circuit granted SCI leave to appeal. In response the plaintiffs filed a motion to dismiss SCI’s appeal, claiming that the appeal was moot. SCI argued that the plaintiffs may not moot its appeal by dismissing their lawsuit in state court.

The Tenth Circuit granted the plaintiffs’ motion to dismiss, and dismissed the appeal as moot.

The Tenth Circuit noted that Article III of the Constitution limits the jurisdiction of federal courts to live controversies that exist at all stages of litigation, including appellate review. This requirement serves the adversarial process by ensuring that cases involve self-interested parties vigorously advocating opposing positions.  Accordingly, if the parties no longer advocate opposing positions, the case is moot and must be dismissed. The Tenth Circuit concluded that when a plaintiff voluntarily dismisses its claims in state court, the pending federal appeal of the district court’s order of remand filed pursuant to 28 U.S.C. § 1453(c) becomes moot.

Because the plaintiffs voluntarily dismissed their claims against SCI, Tenth Circuit held that there was no meaningful dispute remaining between the parties: SCI had no material interest in contesting the District Court’s remand order because the plaintiffs’ lawsuit had now been dismissed.  Further, because Plaintiffs no longer had outstanding claims against SCI, the Tenth Circuit observed that it could not grant meaningful relief to SCI by reviewing the District Court’s remand order.

Further, the Tenth Circuit observed that under 28 U.S.C. § 1447(c), the parties may continue the litigation in state court immediately upon the state court’s receiving notice of the remand order. Neither § 1447(c) nor § 1453(c), which authorizes the appeal of remand orders in class action lawsuits, states that this rule does not apply, or that the jurisdiction of the state court is somehow stayed pending the outcome of a later-authorized appeal of the remand order.  Accordingly, the Tenth Circuit concluded that SCI’s appeal became moot when the plaintiffs voluntarily dismissed their claims in Colorado state court.

Finally, the Tenth Circuit noted that there exists an exception to the mootness doctrine as it pertains to class action lawsuits when class certification has not yet been granted.  An uncertified class can later be certified even though the named plaintiffs’ claims have become moot when the named plaintiffs’ claims (1) are capable of repetition, yet evading review, or (2) are inherently transitory such that the trial court will not have even enough time to rule on a motion for class certification before the proposed representative’s individual interest expires.

The Tenth Circuit found that this rare exception did not apply here because SCI had not established that the plaintiffs’ claims were capable of repetition, yet evading review, or that the plaintiffs’ claims were inherently transitory.