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

The Three Amigos of the Class Action Fairness Act from the Eleventh Circuit!

Posted in Legal Publications and Articles

Three_amigos.jpg Thomas M. Byrne, Class Actions, 58 Mercer L. Rev. 1171 (Summer 2007).

In his cleverly titled article, Thomas Byrne gives a review of the Eleventh Circuit’s 2006 work in our favorite area, class actions. One may think such a title mundane, but Byrne spices it up by aptly titling his section on CAFA, “The CAFA Trio.” Following Byrne’s lead, the CAFA Law Blog editorial staff proudly presents The CAFA Three Amigos a/k/a what the 11th Circuit did with CAFA in 2006. This isn’t your ordinary article, grab your favorite beverage and enjoy, because:

“Wherever there is injustice, you will find us. Wherever there is suffering, we’ll be there. Wherever liberty is threatened, you will find…The Three Amigos!”

LOCAL CONTROVERSY

Bartender: We don’t have beer. Just tequila.

 Ned Nederlander: What’s tequila?

 Bartender: Uh, it’s like beer.” 

So goes the beginning of the first case Byrne examines, Evans v. Walter Industries, 449 F.3d 1159 (11th Cir. 2006). (Editors’ Note:  See the CAFA Law Blog analysis of Evans posted on May 25, 2006 and the CAFA Law Blog critique of Evans posted on May 26, 2006). 

In Evans, the district court remanded a class action to Alabama State Court on the basis of CAFA’s local controversy exception. Courts will decline CAFA jurisdiction over class actions otherwise covered by CAFA if (1) more that two-thirds of the members of the class are citizens of the state in which the action was filed; (2) at least one forum-state defendant is a defendant from whom significant relief is sought; (3) the forum-state defendant’s conduct forms a significant basis for the claims asserted and (4) the principal injuries resulting from the conduct were incurred in the forum state. This “narrow” exception, as properly noted by the 11th Circuit, requires plaintiff to bear the burden of proof against jurisdiction. Of course the removing party still bears the initial burden.

Ultimately, the 11th Circuit decided that plaintiffs could not support the local controversy exception because the “significant defendant” prong could not be met. The 11th Circuit found that the plaintiffs could not provide “any enlightenment at all with respect to the significance of the relief that” was sought against one defendant from the other seventeen defendants. The court indicated that it would need more information which would offer insight into whether one defendant played a significant role in the alleged damages as opposed to a lesser role, or even an minimal role. Byrne comments that the Evans case suggests that the “significance” of a defendant will be considered in light of both the depth of the defendant’s alleged involvement and the defendant’s significance to the other defendants.

AMOUNT IN CONTROVERSY

El Guapo: Jefe, what is a plethora? You just told me that I had a plethora, and I would just like to know if you know what it means to have a plethora. I would not like to think that someone would tell someone else he has a plethora, and then find out that that person has “no idea” what it means to have a plethora.

Jefe: El Guapo, I know that I, Jefe, do not have your superior intellect and education, but could it be that once again, you are angry at something else, and are looking to take it out on me?”

This quote could have been directly extracted from the 11th Circuit’s amount in controversy decision in Miedema v. Maytag Corp., 450 F.3d 1322 (11th Cir. 2006). (Editors’ Note:  See the CAFA Law Blgo analysis of Miedema posted on August 22, 2006 and the CAFA Law Blog critique of Miedema post on August 22, 2006). 

The 11th Circuit questioned the calculations Maytag used to determine CAFA’s $5 million amount in controversy requirement. Maytag relied on projected sales of an allegedly defective product. The court found no relation between the suggested retail price of the products and the damages sought and remanded the suit to state court.

NO CONTROVERSY BECAUSE NO CAFA

Dusty Bottoms: Time for plan B. Plan A was to break into El Guapo’s fortress.  

Carmen: And that you have done, now what? 

Dusty Bottoms: Well we really don’t have a plan B. We didn’t expect for the first plan to work. Sometimes you can over-plan these things.” 

Unfortunately for the defendants in Tmesys, Inc. v. Eufaula Drugs, Inc., 470 F.3d 1019 (11th Cir. 2006), CAFA was not enacted when plaintiff’s filed their class. Thus, the court decided there was no time for a plan B and remand was appropriate.

 **All quotes crudely taken from http://www.imdb.com/title/tt0092086/quotes