Thursday, September 21, 2006

D.N.J. Discusses Standard for Removal Under CAFA

Per Beegal v. Park West Gallery, Not Reported in F. Supp. 2d., Slip Copy, 2006 WL 2645123 (D.N.J. Sept. 14, 2006):

28 U.S.C. ยง 1441(a), a defendant may remove an action filed in state court to a federal court that has original jurisdiction over the action. Once an action is removed, a plaintiff can challenge removal by moving to remand the case back to the state court. To defeat a plaintiff's motion to remand, the defendant bears the burden of showing that the federal court has jurisdiction to hear the case. Abels v. State Farm Fire & Casualty Co., 770 F.2d 26, 29 (3d Cir.1995). In this action, Defendant claims that this Court has original jurisdiction pursuant to the Class Action Fairness Act of 2005 ("CAFA"). While some courts have cited CAFA's legislative history as imposing a burden on the plaintiff to show that "removal was improvident," S.Rep. No. 109-14, at 42 (2005), several circuit courts have determined that since the statute does contain a burden-shifting provision, the burden remains with the defendant. See, e.g., Miedema v. Maytag Corp., 450 F.3d 1322, 1329-30 (11th Cir.2006); Abrego v. Dow Chemical Co., 443 F.3d 676, 685 (9th Cir.2006); Brill v. Countrywide Home Loans, Inc., 427 F.3d 446, 448 (7th Cir.2005). In a recent case, a judge in this district held likewise. See Morgan v. Gay, 2006 U.S. Dist. LEXIS 55211, at *9 (D.N.J. Aug. 7, 2006) ("[U]nder CAFA the burden of establishing removal jurisdiction remains on the proponent of federal jurisdiction.").

Furthermore, where the decision to remand is a close one, district courts are encouraged to err on the side of remanding the case back to state court. See Abels, 770 F.2d at 29 ("Because lack of jurisdiction would make any decree in the case void and the continuation of the litigation in federal court futile, the removal statute should be strictly construed and all doubts should be resolved in favor of remand."); Glenmede Trust Co. v. Dow Chemical Co., 384 F.Supp. 423, 433-34 (E.D.Pa.1974) ("It is well settled that district courts should remand close or doubtful cases for two reasons. First, remand will avoid the possibility of a later determination that the district court lacked jurisdiction and, secondly, remand is normally to a state court which clearly has jurisdiction to decide the case.").


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