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The Class Action Fairness Act has been with us for about 2 1/2 years. Hundreds of district and circuit court opinions have grappled with numerous issues, some anticipated and some � such as questions about the applicability of CAFA and the burden of proof � not. One aspect of CAFA, however, has received relatively little attention, the mass action provision. A recent 11th U.S. Circuit Court of Appeals case, Lowery v. Alabama Power Co., 483 F.3d 1184 (11th Cir. 2007), sets out for the first time a comprehensive analysis of many of CAFA’s mass action provisions. The lengthy opinion is a must read for all CAFA aficionados. Nine plaintiffs, 120 fictitious entities in Alabama case In January 2003, nine individual plaintiffs sued 12 corporations and 120 fictitious entities in Alabama state court for discharging particulates and gases into the atmosphere and ground water. Each plaintiff demanded compensatory and punitive damages of $1.25 million. The plaintiffs amended their complaint three times, adding more than 400 plaintiffs, but the amended prayers for relief no longer claimed $1.25 million on each claim; instead, it sought “compensatory and punitive damages in an amount . . . in excess of the [court's] minimum jurisdictional limit.” The final amended complaint, filed on June 20, 2006, added two defendants, including Alabama Power Company (AP). AP timely filed a notice of removal under the “mass action” provision of CAFA, 28 U.S.C. � 1332(d)(11), in the federal court in Alabama. The plaintiffs timely filed a motion to remand the case to the Alabama state court, asserting that AP had not met its burden of establishing federal jurisdiction because nothing in the notice of removal or the complaint indicated the specific amount of damages the plaintiffs were actually claiming. Alternatively, they argued that the “local controversy” exception to CAFA, 28 U.S.C. � 1332(d)(4), applied. AP filed a supplement to its notice of removal on Aug. 4, stating that, to reach the required minimum total of $5 million in value, each plaintiff’s claims would need to yield only $12,500 and that mass tort claimants typically far exceeded that amount. Additionally, AP sought discovery on the jurisdictional issue. The plaintiffs sought leave to take these depositions of various defendants in order to obtain evidence to support their “local controversy” argument for remand. The district court held that it lacked jurisdiction over the claims against the defendants who had been made parties prior to CAFA’s effective date. With respect to AP and Filler Products, the court took the majority view that CAFA did not shift the burden of proving that removal was proper to the plaintiff, and that AP had failed to prove that CAFA’s jurisdictional amounts were satisfied. Invoking CAFA’s appeal provision, Section 1453(c)(1), AP, joined a few days later by most of the other defendants, moved for leave to appeal, which the 11th Circuit granted. The appeals court began by deciding whether the district court was correct to find that the claims against the defendants sued before the effective date of CAFA were properly removed. Because the plaintiffs conceded that CAFA applied to AP, the court did not have to consider an underlying applicability issue � whether the action was commenced before CAFA’s effective date (the foundation for the district court ruling remanded the claims against the pre-CAFA defendants). Thus, the court only had to consider whether the pre-CAFA defendants could “tag along” with AP’s removal to federal court. The appeals court concluded that CAFA’s plain language supported removal of all the claims against all the defendants because of the CAFA’s references to “actions,” as opposed to “claims,” and because Section 1453(b) states that class, and therefore also mass, actions “may be removed by any defendant without the consent of all defendants.” On appeal, the defendants contended that the district court’s remand order was improper because the action met the requirements for federal diversity jurisdiction under CAFA. The appeals court carefully parsed the mass action provision with other CAFA jurisdictional provisions. It noted that Section 1332(d)(11)(A) serves two functions. First, it states that a mass action “shall be deemed a class action.” Second, a mass action is only deemed a class action “if it otherwise meets the provisions of” sections 1332(d)(2) through (10). In other words, a mass action’s treatment as a class action is contingent on the mass action’s conforming with eight additional statutory provisions, sections 1332(d)(2) through (10). Also, Section 1332(d)(11)(A) incorporates into the mass action context the requirements for a class action to qualify for CAFA diversity jurisdiction. Under sections 1332(d)(2) & (6), for a mass action to be deemed a class action, the plaintiffs’ claims must exceed an aggregate of $5 million, and, under Section 1332(d)(2), the parties must be minimally diverse. Next, the court examined � 1332(d)(11)(B)(i): “the term ‘mass action’ means 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, except that jurisdiction shall exist only over those plaintiffs whose claims in a mass action satisfy the jurisdictional amount requirements under subsection (a).” Looking at the two provisions together, the court identified four discrete requirements for mass action CAFA jurisdiction: (1) an amount in controversy requirement of an aggregate of $5 million; (2) a minimal diversity requirement; (3) a numerosity requirement that the action involve the monetary claims of 100 or more plaintiffs; and (4) a commonality requirement that the plaintiffs’ claims involve common questions of law or fact. Now for the real “interpretational heavy-lifting.” While there was general agreement on the four requirements set forth above, the parties disagreed on the interpretation of the final clause of � 1332(d)(11)(B)(i)’s definition of a mass action. It provides that jurisdiction will exist over a mass action “except that jurisdiction shall exist only over those plaintiffs whose claims in a mass action satisfy the jurisdictional amount requirements under subsection (a).” Under � 1332(a), the current amount in controversy threshold is $75,000. The defendants argued that Congress intended that “except” mean” to the exclusion of.” The plaintiffs, on the other hand, argued that Congress intended “except” to mean “only.” Under the former approach, the $75,000 would seem to serve as an exception to jurisdiction, while under the latter, it would appear to be a jurisdictional requirement. Under the defendants’ approach, the district court could exercise jurisdiction over the action, but lack jurisdiction over individual plaintiffs whose claims do not exceed $75,000. Those claims would have to be remanded to state court. The court found this approach to be problematic because the district court could retain jurisdiction over an action even if, in eliminating individual claims that failed to meet the $75,000 amount in controversy, the total number of plaintiffs in the action fell below 100 or the aggregate total of the remaining plaintiffs’ claims fell below $5 million. Under the plaintiffs’ approach, the $75,000 provision would not function as an exception, but as an additional requirement. Jurisdiction over a mass action would, therefore, only be proper if each of the individual plaintiffs’ claims exceeded $75,000. The court had problems with the plaintiffs’ approach as well. It would render the $5 million aggregate amount surplusage. CAFA requires that there be at least 100 individual plaintiffs, and if each plaintiff’s claims exceeded $75,000, the value of the case would be at least $7.5 million Looking to a Senate Report that in essence supported the defendants approach, while leaving open the question whether the claims of plaintiffs ought to be remanded or supported by supplemental jurisdiction under the Supreme Court’s decision in Exxon Mobil v. Allapatah, 545 U.S. at 558, 125 S. Ct. at 2620, the 11th Circuit rejected the plaintiff’s argument. ‘Lowery’ fails to satisfy CAFA requirement The 11th Circuit also ruled that the district court may consider on a remand motion only the notice of removal and its accompanying documents � the initial and amended complaints and any other documents the defendant has received from the plaintiff and chooses to present to the court. If those documents are insufficient to demonstrate that removal was proper, the case must be remanded. And, the district court generally ought not permit discovery on the jurisdictional issues. Rather, because the plaintiff is subject to Rule 11, there is a presumption that the facts as alleged by the plaintiff are to be taken as true. The court held that the Lowery action, as set forth in plaintiffs’ third amended complaint supplanted the earlier filed complaints and failed to satisfy CAFA’s $5 million jurisdictional requirement for a mass action. The amended complaint did not contain any statement or pleadings as to the value of plaintiffs’ claims. AP’s attempt to invoke the first complaint, which alleged damages of more than $1 million per plaintiff, was unavailing. The court provides a useful practice tip: AP could have relied solely on the initial complaint as the “jurisdiction-communicating” document. Given CAFA’s legislative history, one might wonder why the court would craft such high jurisdictional hurdles for the removing defendant to navigate. The key may well be found in self-preservation. The court may well be preventing the knee-jerk removal of state court actions within the boundaries of the 11th Circuit, most of which were once regarded as plaintiff friendly, if not “judicial hellholes,” the very types of state systems that prompted Congress to enact CAFA. Perhaps CAFA was working only too well. Georgene M. Vairo is a professor of law and William M. Rains fellow at Loyola of Los Angeles Law School. She is on the Board of Editors of Moore’s Federal Practice, and writes the Moore’s chapters on removal and venue problems. She can be reached at [email protected].

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