Tuesday, June 06, 2006

W.D. Arkansas Holds CAFA Does Not Apply Where Relation Back Establishes Commencement Prior to CAFA Effective Date

Per Whitehead v. The Nautilus Gp., Inc., --- F. Supp. ----, 2006 WL 1027147 (W.D. Ark. Apr. 18, 2006):

. . . The Court must look to Arkansas law for a determination of the relation back issue. Id., 434 F.3d at 1071-74.

. . .

Whitehead's first amended complaint relates back to his original complaint if the claims asserted in his first amended complaint “arose out of the conduct, transaction, or occurrence set forth or attempted to be set forth in” his original complaint. SeeArk. R. Civ. P. 15(c). Whitehead's claims of unjust enrichment and fraud as alleged in both complaints arise out of Nautilus' recalls in January 2004 and November 2004. Many characteristics of the original complaint remain in the first amended complaint. For example, the proposed class definition and parties remains the same. The Court finds Whitehead's claims as asserted in the first amended complaint arose out of the conduct, transactions and occurrences set forth in his amended complaint. The Court also finds Whitehead's first amended complaint relates back to original complaint. Therefore, the Court finds this civil action was commenced on February 9, 2005, prior to the effective date of CAFA, and that CAFA does not apply to this civil action.

. . .

Nautilus filed a timely notice of removal, but the issue here is whether Nautilus may assert a new ground for jurisdiction, not asserted in its notice of removal, in its response to Whitehead's motion to remand. Nautilus did not assert this Court had subject matter jurisdiction over this civil action based on a federal question in its notice of removal but waited until it filed a response to Whitehead's motion to remand to pursue the federal question jurisdiction issue. Nautilus filed its response of December 27, 2005, or 77 days after Whitehead's first amended complaint was filed and 63 days after Nautilus removed the case. Nautilus has argued its notice of removal can be amended to assert this new ground for subject matter jurisdiction. The Court does not agree.


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