In re UPS Supply Chain Solutions, Inc., No. 08-0513, 2008 WL 4767817 (6th Cir. Oct. 27, 2008).

No matter how you try to package it, if you remove to federal court asserting ordinary diversity jurisdiction only, you cannot then use the Class Action Fairness Act to appeal the court’s decision to remand

A former employee of United Parcel Services, Inc. sent UPS a pretty parcel in the form of a putative class action, alleging disability discrimination and violation of wage-and-hour requirements. UPS did not like the original destination of the parcel–Kentucky state court–and so UPS forwarded it to federal court, wrapped in brown paper as an ordinary diversity removal under 28 U.S.C. § 1332. UPS did not, however, put a CAFA label on the removal, relying solely on an assertion of traditional diversity jurisdiction.

The plaintiff then moved for remand, arguing that her parcel simply didn’t fit into the diversity box. The federal district court agreed with the plaintiff, finding that UPS had failed to establish the requisite $75,000 amount-in-controversy, and so the district court packed it up and dispatched it back to state court. Foam peanuts, extra. UPS then tried to re-route the matter, by filing an appeal pursuant to 28 U.S.C. § 1453(c)(1), a provision of CAFA that allows appeal “from an order of a district court granting or denying a motion to remand a class action.” The matter therefore ended up on the Sixth Circuit’s doorstep.

The Sixth Circuit glanced at the parcel and immediately took note of UPS’s original method of shipping the matter to federal court: diversity jurisdiction only. The court noted that a decision to remand for lack of jurisdiction is not appealable when the removal was based on an assertion of traditional diversity jurisdiction. The court then held that section 1453(c)(1) did not afford UPS a right to an appeal because CAFA was not applicable, given that the removal was not made under CAFA. The Sixth Circuit, therefore, refused to sign off on the appeal, and routed the parcel back down unopened.

So, the Sixth Circuit effectively found that UPS had no right to appeal under CAFA because UPS had boxed itself in by its decision to remove based on ordinary diversity only, and after its trip around the federal court system, the putative class-action was delivered right back to Kentucky state court.