Thursday, August 30, 2007

S.D. Illinois Holds Second Amended Complaint Relates Back under CAFA; Remands for Lack of Federal Jurisdiction

Per Moll v. Hasbro, Inc., Slip Copy, 2007 WL 2229001 (S.D.Ill . Aug 02, 2007) (NO. 07-0271-DRH):

A case "commences" for purposes of the CAFA when the plaintiff's complaint is filed in state court, not when it is removed. Knudsen v. Liberty Mut. Ins. Co., 411 F.3d at 806. Routine amendments to the complaint relate back to the date of original filing and do not commence new suits. Schorsch v. Hewlett Packard Co., 417 F.3d 749, 751 (7th Cir.2005) (noting that under Illinois law, which applies here, an amendment to a complaint relates back when the original complaint " 'furnished to the defendant all the information necessary ... to prepare a defense to the claim subsequently asserted in the amended complaint' " (citing Boatmen's National Bank of Belleville v. Direct Lines, Inc., 656 N.E.2d 1101, 1107 (Ill.1995)); see also Phillips v. Ford Motor Co., 435 F.3d 785 (7th Cir.2006); Schillinger v. Union Pacific R.R., 425 F.3d 330 (7th Cir.2005). However, "an amended complaint kicks off a new action only if, under the procedural law of the state in which the suit was filed, it does not 'relate back' to the original complaint." Santamarina v. Sears, Roebuck & Co., 466 F.3d 570, 573 (7th Cir.2006) (citations omitted).

Here, Hasbro contends that under CAFA, the Second Amended Complaint, created a new case with new claims, under a different state law (Rhode Island) with brand new plaintiffs seeking to represent a putative class. Plaintiffs argue that CAFA does not apply because the claims contained in the Second Amended Complaint relate back to the original complaint. Based on the following, the Court finds that the claims contained in the Second Amended Complaint relate back to the original Complaint.

As Plaintiffs' original class action Complaint in this case was filed on June 27, 2004, before CAFA's enactment date of February 18, 2005, it is considered "pre-CAFA" and therefore, not within the ambit of CAFA's grant of original jurisdiction. Yet, as stated earlier, Plaintiffs filed their Second Amended Complaint on March 28, 2007, after the enactment date. Therefore, the specific issue the Court must address is whether the Second Amended Complaint relates back to the original complaint or is considered "commencing" a new action in order to trigger the applicability of CAFA.

"The criterion of relation back is whether the original complaint gave the defendant enough notice of the nature and scope of the plaintiff's claim that he shouldn't have been surprised by the amplification of the allegations of the original complaint in the amended one." Santamarina, 466 F.3d at 573 (citations omitted). Under Illinois law, as under federal law, an amendment "relates back" when it arises out of "the same transaction or occurrence set up in the original pleading." 735 ILCS 5/2-616(b); Chandler v. Illinois Central R.R., 207 Ill.2d 331, 346 (Ill.2003); see Fed.R.Civ.P. 15(c) ; Schorsch, 417 F.3d at 751; Delgado-Brunet v. Clark, 93 F.3d 339, 343 (7th Cir.1996) . Illinois courts have also found that "an amendment relates back ... when the original complaint 'furnished to the defendant all the information necessary ... to prepare a defense to the claim subsequently asserted in the amended complaint.' " Boatmen's, 656 N.E.2d at 1107; Pierce v. Joe Keim Builders, Inc., 653 N.E.2d 928, 931 (Ill.App.1995) (citations omitted) ("Thus, an amended complaint relates back only when the original complaint supplies defendant with all of the information necessary to prepare the defense to the claim asserted in the amended pleading ."). The focus is not on the nature of the cause of action pled but on the identity of the transaction, i.e., "... if the defendant has been made aware of the occurrence or transaction which is the basis for the claim, he will be able to defend against the plaintiff's claim, whatever theory it may be predicated upon." Pierce, 653 N.E.2d at 931 (citations omitted). Further, substitution of unnamed class members for named plaintiffs who fall out of the case because of settlement or other reasons is a common and normally an unexceptionable ("routine") feature of a class action litigation in both federal courts and in the Illinois courts." Phillips v. Ford Motor Co., 435 F.3d 785, 787 (7th Cir.2006).

Here, Plaintiffs' amendments adding named plaintiffs/class representatives and withdrawing claims does not appear, at this stage, to substantively alter the class definition or to broaden Hasbro's scope of liability. Instead, it appears that the amendments relate back to the same transaction or series of occurrences as stated in Plaintiff's original Complaint. The lawsuit has the same allegations against the same defendant based on the same product and asserts no new causes of action. Plaintiff's original Complaint clearly alleged multiple states' (including Rhode Island's) consumer fraud act violations. Therefore, new claims were not stated and unnamed parties were merely added as named parties, which is a routine amendment. The issue in Plaintiffs' action remains the same: Hasbro's allegedly defective Electronic Catch Phrase game. Following the Seventh Circuit's ruling in Phillips, Plaintiffs' amendment of the named plaintiffs/class representatives and withdrawing causes of action does not constitute "commencement" of a new action for purposes of triggering CAFA removal. Hasbro had all the information necessary to defend itself and thus the Second Amended Complaint relates back. The Second Amended Complaint represents a normal narrowing of issues in preparation for certification and trial. Therefore, this case must be remanded for lack of federal jurisdiction.


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