Monday, April 17, 2017
Court Says Consolidated Case Not ‘Mass Action’ Under CAFA
By KENNETH OFGANG, Staff Writer
A group of factually related lawsuits, each involving fewer than 100 plaintiffs, was not converted into a “mass action” removable to federal court merely because some plaintiffs’ lawyers sought to consolidate the cases for purposes other than trial, the Ninth U.S. Circuit Court of Appeals ruled Friday.
The panel agreed with U.S. District Judge Edward Chen of the Northern District of California that Cordis Corporation is not entitled to remove the eight product liability actions concerning its manufacture of certain medical devices from the Alameda Superior Court under the Class Action Fairnes Act, or CAFA.
The act allows a mass action to be removed to federal court without meeting the complete diversity requirement generally required for removal of state-law cases. A mass action is defined as one in which “monetary relief claims of 100 or more persons are proposed to be tried jointly on the ground that the plaintiffs’ claims involve common questions of law or fact.”
In filing its notices of removal, Cordis argued that the eight actions were “proposed to be tried jointly” because the plaintiffs had moved to consolidate the cases, not only for discovery, but also for “the institution of a bellwether-trial process.” Chen granted remand, concluding that the motion for consolidation did not propose a joint trial.
The appellate court granted permission for an interlocutory appeal.
Judge Paul Watford, writing for the Ninth Circuit, said it was undisputable that attorneys representing a large number of plaintiffs “are free to file multiple lawsuits with fewer than 100 plaintiffs based on the same factual allegations, even if their purpose in doing so is to avoid federal jurisdiction.” It is also undisputable that related cases involving more than 100 plaintiffs may be consolidated for pretrial purposes without triggering CAFA jurisdiction, he said.
The complication in the current case, he explained, is the plaintiffs’ request for a bellwether-trial process. Whether such a process turns the separate suits into a mass action for purposes of CAFA, he wrote, depends on what type of process is specifically being proposed.
“Two types of bellwether trials can be held when a large number of plaintiffs assert the same or similar claims against a common defendant or defendants,” Watford explained. “In the first type, the claims of a representative plaintiff (or small group of plaintiffs) are tried, and the parties in the other cases agree that they will be bound by the outcome of that trial, at least as to common issues…. In the second (and far more common) type of bellwether trial, the claims of a representative plaintiff or plaintiffs are tried, but the outcome of the trial is binding only as to the parties involved in the trial itself.”
Trial Types Contrasted
In the first type of trial, the agreement of the remaining parties to be bound by the result converts the case into a mass action for CAFA purposes, Watford said. In the second type, he contrasted, the status of the case does not change.
In the Cordis suits, he went on to say, the plaintiffs’ silence as to what type of bellwether process they were asking for cannot be used to presume they intended the less-common, and less-favorable to their position, type of process.
Senior Judge Ferdinand Fernandez and Judge Josephine Staton, visiting from the Central District of California, concurred in the opinion in Dunson v. Cordis Corporation, 17-15257.
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