Tanoh v. Dow Chemical Co.,  No. 09-55138, 09-55145, 09-55147, 09-55148, 09-55153, 09-55156, 09-55160, 2009 WL 826404 (9^th Cir. Mar. 27, 2009). 

In this case, the Ninth Circuit Court of Appeal affirms a remand order sending the claims of 680 named plaintiffs back to state court because the claims did not meet CAFA’s jurisdictional requirements as a “mass action.” 

The 680 plaintiffs asserted tort claims for exposure to Dow products containing an allegedly toxic chemical against various defendants in seven separate lawsuits filed in state court in California. Each lawsuit had fewer than 100 plaintiffs, none of whom appeared as plaintiffs in more than one of the suits. No class allegations were included in any of the suits.

Dow removed the cases to federal court, arguing, among other things, that the seven separate lawsuits taken together constituted a “mass action” under CAFA. After a series of procedural maneuvers by the parties, the district court, and the 9^th Circuit Court of Appeals, was presented with the question of whether seven individual state court actions, each with fewer than one hundred plaintiffs, should be treated as one “mass action” eligible for removal to federal court under CAFA.

In reaching its opinion, the court relies heavily on a strict reading of CAFA’s statutory language defining a “mass action” (as opposed to a class action):

any civil action . . . in which monetary relief claims of 100 or more persons are proposed to be tried jointly on the ground that the plaintiffs’ claims involve common questions of law or fact. . . . [but] “mass action” shall not include any civil action in which . . .(II) the claims are joined upon motion of a defendant; . . . or (IV) the claims have been consolidated or coordinated solely for pretrial proceedings.

28 U.S.C. §1332(d)(11)(B)(i) and (ii). The court finds this plain language dispositive and rejects Dow’s arguments that CAFA was intended to prevent the kind of gamesmanship shown by the filing of seven separate lawsuits regarding the same questions of law and fact, each apparently constructed with fewer than the required number of plaintiffs so as to evade CAFA’s “mass action” jurisdiction.

The court gives a nod to the concept that the plaintiffs are the masters of their complaint (as opposed to masters of their domain) and the presumption against federal removal jurisdiction. The court repeatedly relies on the plaintiffs’ election to proceed as a group and their express choice of proceeding in their own names, rather than as a class. 

The court discusses the statutory language expressly excluding from the definition of mass action any action in which the claims of the plaintiffs are joined upon motion by defendant and holds up this exclusion as proof that Congress considered the possibility presented by plaintiffs in this case and affirmatively decided such a situation should not give rise to federal jurisdiction. The court is not persuaded by Dow’s argument that the statutory exclusion should not apply because it never formally moved to consolidate the plaintiffs’ claims; the court finds the absence of a formal motion immaterial in light of Dow’s request that the seven lawsuits be treated as a mass action. 

The court, while continuing to disdain the Senate Report recounting CAFA’s legislative history, cites its section on “Mass Actions” as further support for the decision in this case.

The court also distinguished two decisions from other circuits in which the plaintiffs tried (and failed) to avoid CAFA jurisdiction by splitting their claims into separate lawsuits covering discrete time periods to remain under the amount in controversy threshold for each suit.  (Editors’ Note: For a description of one of these cases, see the CAFA Law Blog analysis of  Freeman v. Blue Ridge Paper Products posted on February 17, 2009).

The reason for the court’s distinction is: (1) splintering claims to evade amount in controversy requirements still results in the plaintiffs having the potential benefit of recovery in excess of the minimum for jurisdiction; and (2) CAFA is silent on how to handle claims asserted in separate chunks of time, but expressly excludes from the definition of mass action a claim consolidated on motion of a defendant. The moral of this story: splitting up the time periods covered by your claim to avoid federal jurisdiction will not work, but splitting up the plaintiffs will.

By: Stephanie John