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CAFA Law Blog Information, cases and insights regarding the Class Action Fairness Act of 2005

Unintended Consequences: Careful How You Amend

Posted in Case Summaries

Scott v. Cricket Communications, LLC, 15-03330-GLR (D. Md. March 30, 2018)

Reiterating that a court will not protect a party from the adverse consequences of its own voluntary acts, a District Court in Maryland denied a second motion to remand where an amended complaint cured defects it had previously identified.

Plaintiff brought a putative class action in state court on behalf of himself and a class of Maryland citizens alleging that Defendant sold him and the class phones it knew were obsolete at the time of the sale. Defendant removed the case, but an initial motion to remand was granted on the basis that it had not proven the necessary amount in controversy. Cricket had sought to establish the amount by submitting evidence as to phones sold to Maryland customers, but because it had not actually established the citizenship of those customers, the District Court held that it had not met its burden. On appeal, the Fourth Circuit remanded the matter for the District Court to make a finding of fact as to the citizenship of the Maryland class, and thus as to the amount in controversy.

The same day that the Fourth Circuit issued its opinion, Plaintiff filed a First Amended Class Action Complaint (“FAC”) in the state court containing allegations identical to the original complaint, except that it added a nationwide class. Subsequently, Cricket filed a renewed notice of removal alleging that the District Court had jurisdiction under CAFA.

On a second motion to remand, the District Court held that the filing of the FAC overcame Plaintiff’s arguments in favour of remand. First, Plaintiff argued that the Defendant’s renewed notice of removal was untimely because it was not filed within thirty days of his original complaint. The District Court found that when the Plaintiff filed his FAC, he added a nationwide class to his class action, and this voluntary act created a new fact that supported Defendant’s theory for removal, allowing it to file a renewed notice of removal under 28 U.S.C. Section 1446(b)(3) (“if the case stated by the initial pleading is not removable, a notice of removal may be filed within thirty days after receipt by the defendant …of a copy of an amended pleading … from which it may first be ascertained that the case is one which is or has become removable.”)

Next, Plaintiff argued that the District Court lacked jurisdiction over Defendant’s renewed notice of removal because the Fourth Circuit had not yet issued its mandate. Again, however, the Court held that Plaintiff’s amendment to add a nationwide class was a new fact that permitted Defendant to file a new notice of removal, regardless of the Fourth Circuit’s mandate on the prior motion to remand.

Finally, the District Court found that Defendant was now able to demonstrate CAFA jurisdiction by a preponderance of the evidence. The addition of the nationwide class removed the need for Cricket to prove the customers’ Maryland citizenship, which had been the hurdle that it had previously stumbled over.