Friday, July 07, 2006

Fifth Circuit Holds that CAFA Does Not Permit Review of Otherwise Non-Reviewable Remand Decisions beyond CAFA Context

Per Patterson v. Dean Morris, L.L.P. , 448 F.3d 736 (5th Cir. May 3, 2006):

CAFA explicitly limits the power of removal of class actions to “case[s] under this section,” i.e., § 1453. 28 U.S.C. § 1453(c)(1). “The application of § 1453(c)(1) is therefore limited to the context of CAFA.” Wallace v. La. Citizens Prop. Ins. Corp., 2006 WL 848585, at *2 (5th Cir. Mar.31, 2006). Though CAFA also provides that we “may accept an appeal from an order of a district court granting or denying a motion to remand a class action,” this precatory language cannot serve as a mandate for us to reach otherwise non-reviewable remand decisions once we determine that CAFA is inapplicable [which the court did here, because the action commenced the day before CAFA became effective].

Ordinarily, “once a matter related to a bankruptcy case is equitably remanded, it is not subject to federal appellate review on any basis.” Arnold v. Garlock, Inc., 278 F.3d 426, 438 (5th Cir.2001). CAFA provides only for review of a remand order premised on the prerequisites of § 1453 or on claims with an adequate nexus to CAFA. See Wallace, 2006 WL 848585, at *2. There is no such nexus here.

We do not need to consider the Browning equitable factors to determine whether jurisdiction under CAFA obtains; we need only consider the commencement date of plaintiffs' claims. Furthermore, nothing in the text of CAFA suggests that Congress intended to supplant its policy of prohibiting appellate review of equitable remand orders in bankruptcy for class actions that do not satisfy CAFA's requirements.Because these actions commenced on February 17, 2005 (one day before CAFA took effect), CAFA cannot provide the basis for our review of the equitable remand. To hold otherwise would be to treat plaintiffs differently from every other bankrupt class subject to equitable remand before the enactment of CAFA.


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