Mass or morass: When claims are ‘proposed to be tried jointly’ under CAFA’s ‘mass action’ mechanism

A recent circuit split regarding the scope of the “proposal” necessary positions the question for Supreme Court review

An important split in the circuits has developed regarding removal of mass actions to federal court under the Class Action Fairness Act of 2005 (CAFA). Under CAFA, mass actions — cases 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 — may be removed from state court. Plaintiffs’ lawyers regularly have avoided CAFA’s mass action removal provision by filing separate but virtually identical lawsuits in state courts, each involving fewer than 100 plaintiffs, in an effort to keep their large, high-value cases in their preferred local courthouse. While the courts have permitted this practice, plaintiffs have started going one step further:  They have moved to consolidate or coordinate their separate cases in state court to obtain the benefits of one action for over 100 plaintiffs while attempting to avoid removal by claiming that their requests are not proposals for joint trial.

But federal courts are scrutinizing plaintiffs’ coordination requests closely to determine whether they are in actuality proposals to try the cases jointly that would trigger CAFA’s removal mechanism. And a recent circuit split regarding the scope of the “proposal” necessary positions the question for Supreme Court review. The issue is that while mass action removal jurisdiction exists if such lawsuits are “proposed to be tried jointly” by plaintiffs, CAFA provides that removable class actions do not include any civil actions in which “the claims have been consolidated or coordinated solely for pretrial proceedings.” The circuit courts dispute where the line should be drawn in differentiating coordination proposals for pretrial purposes only from proposals to try jointly.

The 7th Circuit was the first circuit to address the novel question in In re Abbott Laboratories, Inc. There, plaintiffs sought to consolidate ten lawsuits in Illinois state court “through trial” and “not solely for pretrial proceedings”; however, they did not go so far as to propose a “joint trial.” The 7th Circuit held that the consolidation request triggered CAFA’s jurisdiction because a proposal for joint trial can be implicit. The 7th Circuit was not persuaded that the cases could be consolidated without the claims ultimately being subject to joint determination.

In contrast, in September 2013, the 9th Circuit affirmed remand to state court where plaintiffs sought to coordinate more than forty product liability cases in California state court “for all purposes.”  In a 2-1 decision in Romo v. Teva Pharmaceuticals and in the related Corber v. Xanodyne Pharmaceuticals, Inc. incorporating the decision in Romo, the 9th Circuit resolved the matter of first impression by requiring an explicit request for joint trial. In applying its narrow reading of the “tried jointly” requirement, the 9th Circuit distinguished Abbott on the basis that the consolidation request in Abbott specifically sought consolidation “through trial.” Judge Ronald M. Gould dissented, remarking that the decision created a circuit split with the 7th Circuit and arguing that courts should look at the “reality” of the joint trial proposal and not the terms by which plaintiffs characterize it.

The 8th Circuit weighed in less than two months later on the side of Abbott. In Atwell v. Boston Scientific Corp., the 8th Circuit held that plaintiffs’ motion in Missouri state court for special assignment to a single judge “for purposes of discovery and trial” of three products liability cases triggered CAFA removal jurisdiction. Specifically endorsing both Abbott and Judge Gould’s dissent in Romo, the 8th Circuit held that the inquiry must focus not only on what plaintiffs explicitly have requested, but also on the necessary consequences of that request.

The defendants in Romo and the related Corber have petitioned for rehearing en banc and have recently supplemented their petitions regarding the holding in Atwell. The cases have also drawn significant interest from the business community. The U.S Chamber of Commerce, Washington Legal Foundation, and phRMA filed amicus briefs advocating for removal jurisdiction in Romo and Corber both prior to the 9th Circuit’s decisions and in support of the recent petitions for rehearing en banc.

At stake is the degree to which plaintiffs will be permitted to claim the benefits of mass action-like status to resolve common issues of law or fact without subjecting themselves to CAFA’s removal jurisdiction. Although Abbott, Romo and Atwell involve different underlying state mechanisms for either coordination or consolidation, which themselves utilize different language than CAFA’s “tried jointly” language, in all three cases, plaintiffs were concerned about avoiding conflicting rulings regarding common issues of fact and law. Plaintiffs already have been permitted to artfully structure cases to exploit an apparent loophole in CAFA’s mass action provision regarding the numerosity requirement of 100 plaintiffs.  Allowing plaintiffs to be the decisive voice on whether their proposals for coordination or consolidation are “for pretrial purposes only” or for “trial jointly,” as Romo appears to advocate, could permit plaintiffs to widen that loophole and “game the system” in a way that was not intended by CAFA. CAFA, of course, was driven by a desire to curb abuses of the class action device and curtail the concentration of important multi-state or national litigation in state courts.

This danger, the likelihood of repetition of the issue, the variety of state statutes that permit coordination or consolidation in language that may differ from CAFA’s “tried jointly” requirements, and the circuit split, including the long dissent in Romo, all position this issue for review by the Supreme Court. The recent split also intensifies the general confusion among the circuit courts regarding the mass action mechanism. The Supreme Court already has granted certiorari in Mississippi ex rel Hood v. AU Optronics Corp. to resolve whether a state’s parens patriae action brought under state law can be removed as a mass action (argument held Nov. 8, 2013). That the Supreme Court has expressed interest in the mass action morass may further augur high court review of the requirement that mass actions are “proposed to be tried jointly.”

Contributing Author

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Desmond Hogan

Desmond Hogan is a partner with Hogan Lovells in Washington D.C. Hogan's practice focuses on high-stakes class-action litigation, other complex commercial litigation, and governmental investigations....

Additional Contributors: Rebecca Mandel

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