Second Circuit Holds That Federal Court Retains Subject Matter Jurisdiction Under CAFA Even After Plaintiff’s Amendment to Remove Class Action Allegations

In In Touch Concepts, Inc. d/b/a ZCOM v. Cellco Partnership, the Second Circuit joined the Seventh Circuit in holding that a federal court retains subject matter jurisdiction over a case that had previously been removed to federal court under the Class Action Fairness Act (“CAFA”), even after the plaintiff amended the complaint to remove the class action allegations.

In reaching this decision, the Second Circuit relied on cases such as Rockwell International Corp. v. United States (2007), where the Supreme Court held that the original complaint determines subject matter jurisdiction in cases that had been removed on federal question grounds. The Second Circuit extended the logic of that holding to cases that were removed under CAFA, holding: “After proper removal to federal court, post-removal amendments generally do not destroy statutory subject matter jurisdiction.”

The decision in In Touch Concepts makes it clear within the Second Circuit that class action plaintiffs cannot negate federal court jurisdiction after CAFA removal simply by dropping the class action allegations from a complaint. This decision provides litigants with additional certainty that their case, once removed under CAFA, will remain in federal court for resolution on the merits. It also may provide support for analogous circumstances where plaintiffs attempt to defeat removal in the first instance by stipulating to damages below the CAFA jurisdictional threshold of $5 million. That issue, however, was not before the Second Circuit.