Seventh Circuit Holds that Removal Based on Theory that Removal Date Is the Date of "Commencement" under CAFA Was Objectively Reasonable

Per Lott v. Pfizer, Inc., --- F.3d ----, 2007 WL 1804261 (7th Cir. June 25, 2007):

Hoping to avoid removal to federal court, the plaintiffs filed a purported class action lawsuit in Madison County Circuit Court on February 17, 2005-the day before President Bush enacted CAFA . . . .

Although CAFA, by its terms, applies only to “civil action[s] commenced on or after the date of enactment of th[e] Act,” Pfizer filed a notice of removal in federal district court on April 1, 2005. In response to the plaintiffs' motion for remand, Pfizer argued that the case “commenced” on the date that it was removed to federal court, not the date on which the plaintiffs filed their complaint. . . .

On May 26, 2005, the district court ruled that it lacked subject matter jurisdiction and remanded the case to state court. It found that the suit commenced on February 17, 2005 and that the case did not satisfy the requirements for diversity jurisdiction. It also awarded the plaintiffs their attorneys' fees and costs under 28 U.S.C. § 1447(c). . . .

On December 7, 2005, the Supreme Court issued Martin v. Franklin Capital Corporation, 546 U.S. 132, ----, 126 S.Ct. 704, 711 (2005), and held that a district court may award attorneys' fees under § 1447(c) only where the removing party lacked an objectively reasonable basis for seeking removal. On December 21, 2005, Pfizer filed a motion to reconsider the fee award in light of Martin, but the district court denied the motion. . . .

. . .

Here, the district court erred by awarding the plaintiffs' attorneys' fees because Pfizer's attempt to remove the case under CAFA was objectively reasonable. When Pfizer filed its notice of removal, no circuit court had rejected Pfizer's argument that the word “commenced” means the date on which a case is removed to federal court. A few district courts had rejected the argument, see Hankins v. Pfizer, Inc., No. CV-1797-ABC-RZ, 2005 U.S. Dist. LEXIS 17191, *3 (C.D.Cal. Mar. 25, 2005); Smith v. Pfizer, Inc., No. 05-CV-0112, 2005 WL 3618319, *5 (S.D.Ill. Mar. 24, 2005); Pritchett v. Office Depot, Inc., 360 F.Supp.2d 1176, 1180 (D.Colo.2005), but a number of other district courts had held, in cases decided shortly after Congress raised the amount in controversy requirement for diversity cases, that “commenced” means the date on which a case is removed to federal court. See Cedillo v. Valcar Enters. & Darling Del. Co., 773 F.Supp. 932, 939 (N.D.Tex.1991); Hunt v. Transport Indem. Ins. Co., No. Civ. 90-00041 ACK, 1990 WL 192483, *5 (D.Haw. July 30, 1990); Lorraine Motors, Inc. v. Aetna Cas. & Sur. Co., 166 F.Supp. 319, 323 (E.D.N.Y.1958). District court decisions, let alone conflicting district court decisions, do not render the law clearly established. See Anderson v. Romero, 72 F.3d 518, 525 (7th Cir.1995). Accordingly, Pfizer acted reasonably when it attempted to remove this case under CAFA.