Eighth Circuit Ruling Deepens Circuit Split on Class Action Fairness Act Circumvention Tactic

8th CircuitCross-posted at WLF’s Forbes.com contributor page

Twice in the last six weeks, we have addressed an increasingly popular trial lawyer tactic aimed at keeping class action lawsuits in state court (see here and here). The lawyers strategically break large numbers of plaintiffs with identical claims into groups less than 100 with the unstated goal of consolidation for trial. Why less than 100? Because the Class Action Fairness Act (CAFA) allows defendants to seek removal of certain class actions, including “mass actions,” which are “monetary relief claims of 100 or more persons . . . proposed to be tried jointly.”

Yesterday, the U.S. Court of Appeals for the Eighth Circuit construed the most contested phrase in cases involving this CAFA provision—”proposed to be tried jointly”—in a way that allowed the defendant to removed the suits to federal court. The opinion embraced the Seventh Circuit’s approach in a 2012 ruling (In re Abbott Labs) and rejected a Ninth Circuit decision from September 24, 2013 (Romo v. Teva).

Atwell v. Boston Scientific involved three groups of less than 100 plaintiffs suing Boston Scientific in a state court in St. Louis. The suits alleged common facts and issues. After the defendant removed the three cases to federal court, two federal trial judges remanded two of the suits back to state court. Boston Scientific invoked the CAFA provision which allows immediate appeal of such decisions. Even though the plaintiffs never explicitly proposed that the state court jointly try the remanded cases, the Eighth Circuit concluded that was their goal. The court looked at “the necessary consequence of their request” along with “plaintiffs’ candid explanation of their objectives” in reaching that conclusion.

The two separate groups of plaintiffs each filed motions one day apart with the St. Louis court asking that each case be assigned to a single judge “for purposes of discovery and trial.” Those motions did not request consolidation for trial, but because of a Missouri state court rule that encourages consolidation for judicial economy, that would be the “necessary consequence” of the plaintiffs’ motions. As the Seventh Circuit stated in In re Abbott Labs (and quoted by the Atwell court):

[I]t is difficult to see how a trial court could consolidate the cases as requested by plaintiffs and not hold a joint trial or an exemplar trial with the legal issues applied to the remaining cases.

Thankfully, unlike the Ninth Circuit in Romo, the Eighth Circuit was willing to look beyond the Atwell plaintiffs’ literal statements and actions, expose what they were really up to, and uphold Congress’s intent in passing CAFA.

The Atwell decision will almost certainly lead to a summary reversal in another similar attempt at circumventing CAFA. Johnson & Johnson has asked the Eighth Circuit for permission to appeal another remand order in a “mass action” case, Strantz v. Johnson & Johnson, a motion which is still pending.

All those concerned with CAFA circumvention will then turn their attention back to the Ninth Circuit, which is considering defendants’ request for rehearing en banc in Romo, and to the Tenth Circuit, where Johnson & Johnson has asked permission to appeal a trial judge’s remand order in Halliburton et al. v. Johnson & Johnson et al.

One thought on “Eighth Circuit Ruling Deepens Circuit Split on Class Action Fairness Act Circumvention Tactic

  1. Pingback: Update: Ninth Circuit Agrees to Reconsider Class Action Fairness Act Circumvention Ruling En Banc | The Legal Pulse

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