Monday, August 14, 2006

D. Colo. Rules that Severance From State Court Action Does Not “Commence” a New Case for CAFA Purposes

Per Lally v. Country Mut. Ins. Co., Not Reported in F. Supp. 2d., 2006 WL 2092610 (D. Colo. July 27, 2006):

Country Mutual asserts that removal is proper pursuant to the Class Action Fairness Act of 2005 ["CAFA"]… This is because the severance of this action from the main state court action allegedly created a new case which triggered Country Mutual's right to remove. Alternatively, Country Mutual contends that removal is proper under diversity jurisdiction as that existed prior to CAFA. Counsel representing Country Mutual in this case also filed Notices of Removal on behalf of five other defendants.… Plaintiffs now seek to remand this case back to the state court on the basis that the removal was untimely.

Removal statutes are narrowly construed, and there is a presumption against removal jurisdiction. Pritchett v. Office Depot, Inc., 420 F.3d 1090, 1094- 95 (10th Cir.2005); Baby C v. Price, No. 04-3299, 138 Fed. Appx. 81, (10th Cir.2005) … Country Mutual, as the party seeking removal, has the burden of proving that federal jurisdiction is proper. Plog v. Colorado Ass. of Soil Conservation Districts, 841 F.Supp. 350, 352 (D.Colo.1993).

Section 1453(b) of CAFA provides for the removal of class actions from state court. CAFA is only applicable, however, to actions commenced on or after its effective date of February 18, 2005. The question of whether this court has jurisdiction over Plaintiffs' claims pursuant to CAFA therefore requires a determination of when this case was commenced. Plaintiffs argue that the applicable date is January 10, 2003, which is the date the original state court action was filed in the Boulder County District Court. Country Mutual argues that the applicable date is February 24, 2006, which is the date that Plaintiffs' claims against it were severed from the other claims asserted in the original state court action.

I find that this case, even though severed from the original state court action, commenced when the original complaint was filed in January of 2003. Thus, the CAFA is inapplicable, and the removal was not timely.


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