Westwood Apex v. Contreras, No. 11-55362, 2011 WL 1744960 (9th Cir. May 2, 2011).Do you remember the famous line, “It depends on what the meaning of the word ‘is,’is”? You can relive the whole sordid, but titillating, Clinton/Lewinsky sex scandal with the excerpt of the President’s deposition by clicking here: http://www.youtube.com/watch?v=j4XT-l-_3y0Well, in this case, which does not refer to cigars or stains on dresses, the appellate court was concerned with the meaning of the word “any.” While CAFA eliminated several important roadblocks to removal of class actions commenced in state court, the Ninth Circuit held that 28 U.S.C. §1453(b) did not change the longstanding rule that a party who is joined to such an action as a defendant to a counterclaim or as a third-party defendant may not remove the case to federal court. (Editors’ Note: Regular readers of the CAFA Law Blog, who are all smart and sexy, know that we disagree. See the article published in the Consumer Financial Serivces Law Report by clicking here).

Here, when U.S. Bank National Association brought a foreclosure action in state court against James M. Adams, he filed a class action counterclaim against, inter alia, Wells Fargo Bank, the loan servicer, alleging violations of the Fair Debt Collection Practices Act.Wells Fargo, as an additional counterclaim defendant, removed the case to the federal court under 28 U.S.C. §1453 of CAFA. Adams moved to remand, which the District Court granted.The Court noted that the general removal statute, 28 U.S.C. §1441(a), provides that an action may be removed by “the defendant or the defendants,” whereas, CAFA’s removal provision, 28 U.S.C. § 1453(b), provides that an action may be removed by “any defendant without the consent of all defendants.”

Apex v. Contreras, No. CV 10-1382 (C.D. Cal. Nov. 4, 2010).A District Court in California remanded the action to state court finding that use of the term, “any defendant” in 28 U.S.C. § 1453(b) does not change the long standing rule that only original defendants can remove. The plaintiff, Westwood Apex, filed suit against the defendant, Jesus Contreras, for breach of contract in state court based on allegations that Contreras failed to pay amounts due on his student loan note.

The Ninth Circuit noted that the default rule on remand orders is that “[a]n order remanding a case to the State court from which it was removed is not reviewable on appeal or otherwise.” The Ninth Circuit further noted that 28 U.S.C. § 1453(c)(1) entitled Review of Remand Orders, provides that, when a case is removed “under this section,” “a court of appeals may accept an appeal from an order of a district court granting or denying a motion to remand a class action.”Chan argued that § 1453(c)(1) was limited to diversity actions under CAFA. Liberty argued that there was no CAFA-based limitation and that all class actions were covered by that grant of jurisdiction.The Ninth Circuit noted that § 1453(c) is designed to provide a limited means, subject to strict timing controls on both the parties and the court, for appellate review of remand orders in cases removed under § 1453(b).

Liberty Credit Services v. Yonker, No. 5:10-CV-00838, 2010 WL 2639903 (N.D. Ohio, June 29, 2010).A District Court in Ohio remanded the action to state court holding that the phrase “any defendant” used in 28 U.S.C. §1453(b) includes one of the parties against whom the original plaintiff asserts a claim and not counterclaim defendants.Liberty Credit Services filed a complaint in state court against Crystal Yonker to collect a debt of $517.18 that Liberty claimed Yonker owed on a line of credit.

The Middle District found that 1.222 representative claims are not class actions, as the term is understood for CAFA jurisdiction. Defendants then sought permission to appeal the sua sponte remand to the Eleventh Circuit.The appealability of class action remand orders is governed by CAFA and codified at 28 U.S.C. § 1453. Prior to CAFA, a district court’s order remanding a class action for lack of subject matter jurisdiction or a defect in the removal process typically was not appealable.

Although § 1446(b) of the removal statute imposes a one-year limitation on the time to remove certain cases, Congress exempted class actions from this one-year limitation as part of the Class Action Fairness Act of 2005 (CAFA). CAFA’s section governing removal of class actions is codified at 28 U.S.C. §1453. For purposes of this section, CAFA sets forth a broad definition of “class action.”

The District Court stated that this was an example of “irreconcilable conflict” between statutes. While ISLA contains a categorical bar on the removal of its cases which are brought in state court, CAFA provides for the categorical removal of qualifying class actions save for the few which are excepted in 28 U.S.C. § 1453(d). Thus, the Court noted that both being specific laws, the canon that a special law overrides a general law was not useful here.

by Brian Wolfman For a few weeks now, I've been planning to let you know about the Seventh Circuit's June 11 Class Action Fairness Act (CAFA) decision in Spivey v. Vertrue, Incorporated, No. 08-8009. So, here goes:In Spivey, Judge Frank Easterbrook broke from all other circuits to have addressed the question and held that 28 U.S.C. § 1453(c)(1) means what it says: A petition for permission to appeal a district court’s remand order under CAFA must be filed with the court of appeals “not less than 7 days after entry of the order.” (emphasis added).

Morgan v. Gay, Case No. 06-8045 (3d Cir. October 16, 2006).On October 16, 2006, the United States Court of Appeals for the Third Circuit handed down a short opinion, labeled "Precedential", written by Circuit Judge Smith regarding CAFA’s appeal period under 28 U.S.C. § 1453(c). The case was originally filed by New Jersey purchasers of the skin cream Stri Vectin-SD, not Captain Morgan’s rum, in the Superior Court of New Jersey and removed to federal court by the defendants.