Roether, Jeffery L., Interpreting Congressional Silence: CAFA’s Jurisdictional Burden of Proof in Post-Removal Remand Proceedings, 75 Fordham L.Rev. 2745
In his April 2007 case note entitled: Interpreting Congressional Silence: CAFA’s jurisdictional Burden of Proof in post-Removal Remand Proceedings, Jeffery L. Roether examined who bears the burden of proof regarding CAFA jurisdiction. This note advocates the continued use of the traditional rule that the party attempting to remove a state action bears the burden of establishing federal subject matter jurisdiction.
The Note outlines that the direct language of CAFA does not speak to this issue, while the legislative history reflects the enactment of a different rule. CAFA’s legislative history expresses Congress’ intent to require an objecting plaintiff to demonstrate that CAFA jurisdiction is inappropriate. This Note sets forth the traditional rule governing subject matter jurisdiction and removal, as well as proper use of legislative history.
Roether first examines the Senate Judiciary Committee’s comments following CAFA’s enactment. The Committee intensely discussed the issue of why plaintiffs’ attorneys tend to prefer, if not mandate, the trial of class actions in state court. The Committee disagreed with this mentality stating that state court judges have certified class actions “not because they believe a class trial would be more efficient than an individual trial, but because they believe class certification will simply induce the defendant to settle the case without trial.”
Furthermore, according to Roether, the Committee’s comment reflects his belief that federal courts are the proper forum for multistate class actions. The rationale focused on the ability of federal courts to alleviate the abuses that often undermine the liberties of class action defendants. Ultimately Congress concluded the outdated diversity requirements were responsible for keeping class actions out of federal court.
Roether argues that the Committee simply got it all wrong. His argument began by accusing the Judiciary Committee of ignoring current procedure in place that allows federal courts to limit the plaintiffs’ ability to evade diversity jurisdiction. These “steps” in place include the recent focus on fraudulent joinder. Fraudulent joinder allows courts to disregard a party for diversity purposes, when it determines that a party was joined for the sole intention of avoiding diversity jurisdiction.
CAFA’s requirements expand diversity jurisdiction over class actions. Under CAFA, federal subject matter jurisdiction exists over class action where: (1) proposed class has more than 100 members, (2) the aggregated claims of class members exceed five million dollars, and (3) any member of the class of plaintiffs is a citizen of a different state from any defendant. Despite this bold move toward federal court, CAFA does have exceptions, local controversy and home state, that mandate the action be remanded to state court. The discretionary exception under CAFA also allows an action that meets the requirements above to be tried in state court at the district court’s discretion.
This Note argues that by broadening federal jurisdiction over class action, the defendant’s ability to remove has been expanded. For example, CAFA permits defendants to remove under Section 1446 “without regard to whether any defendant is a citizen of the State in which the action is brought.” Second, CAFA authorizes removal “without the consent of all defendants.” Finally, CAFA eliminates the limitation placed on removal more than one year after the action commenced. As a result of these expansions, this Note argued defendants have it easy when it comes to removal under CAFA.
Next, the Note examines the legislative history along with the proper approaches for interpretation. CAFA’s controversial legislative history is expressed in the House Sponsor’s Statement, which states:
new section 1332(d) is intended to expand substantially Federal court jurisdiction over class actions. Its provisions should be read broadly, with a strong preference that interstate class actions should be heard in Federal court if removed by any defendant. If a purported class action is removed under these jurisdictional provisions, the named plaintiffs(s) should bear the burden of demonstrating that removal was improper.
The Note reviews two approaches for applying such legislative history: (1) subjective interpretation: Intentionalism and Purposivism and (2) the objective approach of Textualism. Intent or purpose evaluation focuses on the legislative intent or purpose behind the statute. The authors were quick to distinguish this approach by arguing that courts are generally weary of relying on a single legislator’s opinion, as evident in the House Sponsor’s Statement, as an “authoritative statement of congressional intent.” The authors preferred the textual approach which examines the direct language of the statute to determine its meaning. As we all know, CAFA’s text is silent as to jurisdictional burden of proof.
The Note analyzes district courts’ approach, along with the recent law review article published by some of the CAFA Law Blog editors, interpreting jurisdictional burden of proof. (Editors’ Note: See the law review article by CAFA Law Blog Editors Hunter Twiford, Anthony Rollo and John Rouse entitled “CAFA’s New ‘Minimal Diversity’ Standard For Interstate Class Actions Creates A Presumption That Jurisdiction Exists, With The Burden Of Proof Assigned To The Party Opposing Jurisdiction”).
The Note focuses on the 2005 decision in Berry v. American Express Publishing Corp., 381 F. Supp. 2d 1118, 1120 C.D. (Cal. 2005). In Berry, the plaintiff instituted a class action suit alleging that defendant American Express unlawfully charged cardholders for unsolicited magazine subscriptions in violation of various California statutes. The defendant removed pursuant to CAFA and the plaintiff sought to remand alleging the defendant could not meet the AIC. The District Court rationalized that the legislature’s intent was to shift the burden of proof to the plaintiffs in order to favor federal jurisdiction. As a result, the Court denied plaintiff’ motion to remand. (Editors’ Note: See the CAFA Law Blog analysis of Berry posted on September 5, 2005).
The authors point to the CAFA Blog editors’ law review article which asserts that CAFA has placed the burden of persuasion on the party opposing CAFA jurisdiction. The Note suggested that the law review article, along with the Berry Court’s focus on legislative history was misguided. The authors point out that the law review article, unlike the Berry Court and other district courts, claim that the portions of CAFA’s legislative history discussing burden of proof are directly connected to the Findings and Purposes section of the statutes text. It is important to note, however, that the Note focused on the law review article and stated that absent the Findings and Purpose section, the burden should remain on the opponent of federal jurisdiction because “the Supreme Court’s well-established test to determine which party bears the burden of proof” instructs district courts to examine legislative history. Rather than discount the theory set forth in the CAFA Blog editors’ article, the Note merely focuses on other circuit courts decision to apply the traditional law.
The authors main argument is that “naked legislative history is not enough to switch the burden of proof,” and that district courts should follow the opinions of the Third, Seventh, Ninth and Eleventh Circuits who continue to place the initial burden on the proponent of federal jurisdiction. Their argument combats CAFA’s general principle of broadening federal jurisdiction by simply saying: “general intent to facilitate removal coupled with ‘naked’ legislative history is not enough to overturn the ‘near-canonical’ rule that the proponent of federal jurisdiction bears the burden.”