Thursday, May 10, 2007

W.D. Wash. Holds CAFA Removal Jurisdiction Remains Valid Once Established, Even if the Amount in Controversy is Later Insufficient

Per Davis v. Homecomings Financial, Slip Copy, 2007 WL 905939 (W.D. Wash. March 22, 2007):

Now that the Court's inquiry is limited to a Washington state class, it appears that the amount is controversy is less than the $5 million necessary for removal under CAFA. Plaintiff argues that the action would not be subject to removal. Although that argument is correct, the action was properly removed because at the time, the amount in controversy exceeded $5 million based on the proposed nationwide class. Because CAFA was enacted so recently, the parties have not cited any cases under that statute analyzing whether jurisdiction is lost if the amount in controversy is reduced after removal. Courts considering the issue under the diversity statute, however, have concluded that “diversity jurisdiction is determined at the time the action commences, and a federal court is not divested of jurisdiction . . . if the amount in controversy subsequently drops below the minimum jurisdictional level.” Hill v. Blind Indus. & Serv. of Md., 179 F.3d 754, 757 (9th Cir.1999). Furthermore, although CAFA does not address this issue, courts “presume that Congress is aware of the legal context in which it is legislating.” Abrego v. Dow Chem. Co., 443 F.3d 676, 683-84 (9th Cir.2006) (citing Cannon v. Univ. of Chicago, 441 U.S. 677, 696-97 (1979) and United States v. LeCoe, 936 F.2d 398, 403 (9th Cir.1991) ( “Congress is, of course, presumed to know existing law pertinent to any new legislation it enacts”)). Despite its presumed knowledge of the diversity laws, there is no indication that Congress intended to alter the established authority regarding subsequent changes to the amount in controversy. Accordingly, the Court continues to have subject matter jurisdiction over this matter even though consideration of a Washington-only class has reduced the amount in controversy.

After the Court issued its order, plaintiff explicitly stated that she was not seeking reconsideration of the Court's holding on its jurisdiction. See Dkt. # 86 (Plaintiff's Motion for Reconsideration stating that she “does not request reconsideration of any other aspect of the Court's order” other than the denial of class certification under Fed.R.Civ.P. 23(b)(3)) (emphasis in original). If plaintiff is seeking reconsideration now, her motion is untimely. The Court's prior order is the law of the case. Because the Court has already held that it continues to have jurisdiction, plaintiff's motion must be denied.


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