Featured Expert Contributor—Civil Justice/Class Actions
By Frank Cruz-Alvarez, a Partner with Shook, Hardy & Bacon L.L.P. in the firm’s Miami, FL office, with Erica E. McCabe, an Associate in the firm’s Kansas City, MO office.
On January 9, 2018, the U.S. Court of Appeals for the Fifth Circuit, in the consolidated interlocutory appeals of Warren Lester, et al. and Shirley Bottley, et al., affirmed the district court’s decision denying the plaintiffs’ motions to remand their respective cases back to Louisiana state court.
Interpreting the Class Action Fairness Act of 2005 (CAFA) broadly, the Fifth Circuit majority confirmed that (1) a proposal for a joint trial of related state court cases triggers a “mass action” under CAFA, and (2) CAFA provides a basis for removal even when one of the underlying suits was filed before the law’s February 18, 2005, effective date. Lester, et al. v. Exxon Mobil Corp., et al., 2018 U.S. App. LEXIS 547 at *3–4 (5th Cir. Jan. 9, 2018).
Plaintiffs in both underlying suits sought damages for injuries resulting from exposure to naturally occurring radioactive material. The original action, Warren Lester, et al. v. Exxon Mobil Corp., et al., was filed in 2002. This suit alleged various personal injury and property damages claims for over 600 plaintiffs, including the claims of Cornelius Bottley. In 2013, following Bottley’s death, his heirs brought a separate wrongful death and survival suit—Shirley Bottley, et al. v. Exxon Mobil Corp. et al. Notably, the same legal counsel represented all the Lester and Bottley plaintiffs.
For trial purposes, the district court broke the Lester action into non-preclusive “flights,” or trials, each composed of twelve or fewer plaintiffs. When Cornelius Bottley’s original Lester claim was set for trial, the Bottley plaintiffs moved to transfer and consolidate their claims with Lester. Id. Immediately thereafter, Bottley defendant, ExxonMobil Oil Corporation (Mobil Oil), invoked CAFA and removed both suits to federal court as a newly commenced mass action.
Asserting that the federal court lacked subject matter jurisdiction, both the Bottley and remaining Lester plaintiffs moved for remand. The district court denied the plaintiffs’ motions and consolidated the suits, but also advised the parties to seek Fifth Circuit review on this novel jurisdictional issue.
Still hoping to evade CAFA’s jurisdiction, the plaintiffs appealed to the Fifth Circuit raising two issues of first impression: “(1) whether a motion to consolidate and transfer related state court suits effectuates a ‘mass action’ removable under CAFA; and (2) if so, whether CAFA may be invoked as a basis for removal when one of the underlying suits comprising the purported mass action commenced prior to CAFA’s 2005 effective date.” Id. at *3.
The Fifth Circuit first addressed whether the consolidation formed a proper mass action, which subjected the plaintiffs to CAFA’s removal provision. CAFA defines mass actions as “any civil action … in which monetary relief claims of 100 or more persons are proposed to be tried jointly on the grounds that plaintiffs’ claims involve common questions of law or fact.” Id. at *4 (citing 28 U.S.C. § 1332(d)(11)(B)(i)). These actions are removable so long as the claims are not (1) “joined upon a motion of a defendant”, or (2) “consolidated or coordinated solely for pretrial proceedings.” Id. at *4–5 (citing 28 U.S.C. § 1332(d)(11)(B(i)(II), (IV)).
Relying on CAFA’s text, the Fifth Circuit rejected the plaintiffs’ argument that no mass action had been formed because the state court never signed a consolidation order. Instead, the panel confirmed that mass actions are effectuated upon the mere proposal for a joint trial. The court also carefully dodged concern regarding a non-party’s ability to unilaterally trigger CAFA by filing an unopposed motion to consolidate, emphasizing that the Lester and Bottley plaintiffs are all represented by the same legal counsel.
After acknowledging that the proposed consolidation of Lester and Bottley gave rise to a mass action under CAFA, the Fifth Circuit next addressed whether CAFA should apply where one of the underlying suits commenced before CAFA’s 2005 effective date. Based again on CAFA’s text, the panel rejected the plaintiffs’ arguments that removing Lester was an impermissible, retroactive application of CAFA.
The court—emphasizing congressional intent—concluded that CAFA’s removal power should be applied broadly to “‘any civil action commenced’ after its effective date.” Id. at *11 (citing Pub. L. No. 109-2, 119 Stat. 4, 14 (2005)). More specifically, the court interpreted CAFA’s use of the term “actions” instead of “claims” as an indication that “removal under CAFA is broadly inclusive.” Id. at *13.
The Fifth Circuit applied this interpretation to the Lester-Bottley mass action, holding that only one of the underlying civil actions must have commenced post-CAFA for CAFA’s removal provision to apply. Thus, because Bottley was a “civil action” that commenced after CAFA’s effective date, its consolidation with Lester transformed the two suits into a mass action subject to CAFA’s removal provision. The Fifth Circuit also noted that this interpretation of CAFA’s removal provision is consistent with the Eleventh Circuit’s decision in Lowery v. Alabama Power Co., 483 F.3d 1184 (11th Cir. 2007).
As a final matter, the Fifth Circuit rejected the plaintiffs’ argument that Mobil Oil lacked standing to remove Lester, and confirmed that Mobil Oil gained standing when the Lester–Bottley mass action was formed. The majority stressed that the plaintiffs were “well aware that amending the Lester complaint to add the Bottley claims against Mobil Oil could trigger CAFA.” Id. at *14.
In dissent, Judge Graves disagreed with the majority’s broad interpretation of CAFA and averred that CAFA’s non-retroactivity provision bars the federal courts from asserting subject matter jurisdiction in this matter. Judge Graves emphasized that, here, the 100-person numerosity requirement for mass actions could not be met by including the 500 remaining Lester plaintiffs because that action commenced in 2002, three years before CAFA’s enactment.
Ultimately, although the court created some ambiguity about whether CAFA would apply as broadly if the plaintiffs in the two underlying suits were not represented by the same legal counsel, it is worth noting that CAFA may have the jurisdictional power to reach claims commenced before its effective date.