Tuesday, April 03, 2007

N.D. Alabama Discusses Whether An Action Filed Before CAFA and Later Amended to Add New Defendant is Removable Only as to That Defendant

Per Lowery v. Honeywell Intern., Inc., 460 F.Supp.2d 1288 (N.D. Ala. Oct. 24, 2006):

Although plaintiffs filed their original complaint before CAFA's enactment, the amendment that added Alabama Power and Filler Products, and that precipitated this removal, came after CAFA's effective date. This procedural fact creates two potentially dispositive removability questions: (1) did the filing of the third amended complaint “commence” a new suit for purposes of CAFA; and (2) if so, did the new suit, by retroactive effect, “commence” as to all defendants, or only as to Alabama Power and Filler Products. . . . In Braud, the Fifth Circuit had earlier explained that the date upon which an action is “commenced” in a state court is ascertained from that state's rules of procedure. Braud v. Transport Service Co. of Illinois, 445 F.3d 801, 803 (5th Cir.2006). Accordingly, this court must look to the Alabama Rules of Civil Procedure to find out when this action was “commenced.” . . .

As the Braud court recognized, a distinct issue appears when a complaint is amended to add a defendant. Following the Seventh Circuit's dicta from Schillinger v. Union Pac. R.R., 425 F.3d 330 (7th Cir.2005), the Fifth Circuit in Braud held that “as to the new defendant, removability is determined as of the date of receipt of service of the amended complaint, not as of the date on which the original suit was filed in state court.” 445 F.3d at 805. (emphasis added). This language is pregnant with meaning. It means that as to Alabama Power and Filler Products for the purposes of CAFA this action was not “commenced” until June 20, 2006, while as to the original defendants, it was “commenced” on January 24, 2003. . . . Accordingly, only Alabama Power and Filler Products could, by filing notices of removal within thirty days after June 20, 2006, and notifying the state court clerk of the removal, avail themselves of the removal provisions of CAFA. . . . All defendants strenuously argue that a CAFA removal by a single defendant added after CAFA's enactment operates to effect the removal of the entire action, including all of the parties and all of the claims, and not just the claims asserted against the defendant or defendants added after CAFA's effective date. Defendants rely on (1) the statutory language of CAFA, (2) Congressional intent, and (3) the Fifth Circuit's decision in Braud. . . . [B]ut . . . the court remains unpersuaded . . . by defendants' arguments. . . . Despite CAFA, federal courts are still courts of limited jurisdiction. While CAFA admittedly broadens federal removal jurisdiction, it does not unanchor the federal courts from the basic principle of federalism that requires the construction of removal statutes against a removing defendant. . . .


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