10th Circuit adopts rules to evaluate Class Action Fairness Act remand motions and issues Indian gaming decision.

Woods v Standard Insurance Company

Woods sued Standard, the New Mexico human resources department and Standard’s local agent in a state class action suit alleging Standard took premiums but did not provide coverage and that all defendants didn’t tell Woods and other state employees that they needed to prove insurability. Standard removed the case to federal court under the Class Action Fairness Act 28 USC 1332(d). Woods moved to remand under the state actor and local defendant exceptions. The magistrate judge remanded the case under the local defendant exception. The panel reversed and remanded. It first held that Woods as plaintiff bore the burden of proving the applicability of the exceptions. It held that under the plain language of 1332(d), the state actor exception only applies if all the primary defendants are state actors. Standard is a private company and a primary defendant. Thus, the exception does not apply. The panel followed the legislative history of 1332(d) and held an alleged local defendant must be one whose conduct is central to the plaintiff’s claim, must be the primary focus of the claim and the alleged local defendant must be true target of the claim. Here, the local agent’s conduct is simply not central to the claim as the complaint’s focus is on the actions and inactions of Standard and the department, only one of the many causes of action involves the local agent and the relief sought, insurance coverage, cannot be provided by the agent. Thus, remand on this basis was held to be error. The case was remanded to determine if the $5 million threshold amount is met in this case.

Oklahoma, ex Rel. v Hobia

Oklahoma sued Hobia and the other members of an Indian tribal council for an injunction against the construction of a casino on non-Indian land. The district court issued a preliminary injunction. The panel reversed. It held that a letter from the chairwoman of the National Indian Gaming Commission did not moot the case as it anticipated future bad conduct and set out future consequences and was thus not a final agency action. The panel held that the recent United States Supreme Court Bay Mills case controlled the outcome here as there is no federal statutory right of action when the alleged violations of a gaming agreement occur off Indian land. The panel noted that Oklahoma could have sought a waiver of immunity for suit in federal court in its agreement with the tribe, but, chose to include an arbitration clause instead. The case was remanded for the district court to vacate its injunction and dismiss the case.