Featured Expert Contributor—Civil Justice/Class Actions
Frank Cruz-Alvarez is a Partner with Shook, Hardy & Bacon L.L.P. in the firm’s Miami, FL office, and Britta Stamps Todd is an Associate in the firm’s Kansas City, Mo office. Mr. Cruz-Alvarez is the WLF Legal Pulse’s Featured Expert Contributor on Civil Justice/Class Actions.
Statutory interpretation meets CAFA remand in a new way in the Eleventh Circuit’s recent decision in Ruhlen v. Holiday Haven Homeowners, Inc. The case would have presented a novel issue for appellate review—whether a case brought under Florida Rule of Civil Procedure 1.222 (which governs mobile homeowners’ associations) qualifies as a civil action filed under FRCP 23 “or similar State statute or rule of judicial procedure authorizing an action to be brought by 1 or more representative persons as a class action,” rendering it a “class action” under CAFA. 28 U.S.C. §§ 1453(b); 1332(d)(1)(B). Over a rigorous dissent, the majority held that the appellate court lacked jurisdiction to consider the defendants’ appeal because a district court’s sua sponte remand order does not fall under CAFA’s exception to the general rule that an appellate court may not review a district court’s decision to remand a case based on a lack of subject-matter jurisdiction.
CAFA created an exception that allows an appeal “from an order of a district court granting or denying a motion to remand a class action to the State court from which it was removed.” 28 U.S.C. § 1453(c)(1). Whether the type of suit at issue in this case would qualify as a “class action” under CAFA, allowing it to be removed to federal court, would have been an issue of first impression for the Eleventh Circuit, with potential implications on other “representative actions.” But the majority dove deep into the definition and implication of the term “motion” in this CAFA provision, and surfaced with the conclusion that “a ‘motion’ is a request or an application made by a party.” Slip Op. at 4. If a motion must be made by a party, then a sua sponte order neither grants nor denies “a motion to remand,” as required by the statute. Given that interpretation by the majority, the appellate court lacks jurisdiction to consider the appeal.
“But,” attorneys might ask, “aren’t sua sponte orders really just decisions made by a court ‘on its own motion’?” Yes, according to Judge Rosenbaum’s dissent. Citing cases in which the Eleventh Circuit has referred to “sua sponte” as a court ruling “on its own motion,” the dissent argues that a plain reading of the CAFA provision confers appellate jurisdiction on sua sponte remand orders—no different than rulings on a party’s motion to remand. The dissent suggests that the Eleventh Circuit is the first federal appellate court to hold that it lacks jurisdiction over sua sponte remand orders under CAFA, and creates a circuit split with the Seventh, Eighth, and Ninth Circuits that have all implicitly held that sua sponte remand orders in CAFA cases are reviewable under § 1453(c)(1). Under the majority’s interpretation, the dissent points out, district court orders remanding class actions sua sponte will be insulated from appellate review.
Despite the inherent delay of a substantive opinion discussing “representative actions” under CAFA, class action attorneys should not write off this case as meaningless. It demonstrates the strict requirements of CAFA and a district court’s power to remand a case. In practice, a defendant may believe their case is safe in federal court if the plaintiff fails to file a motion for remand. But, under Ruhlen, the district court could choose to issue a sua sponte remand order, leaving the defendant back in state court without a right to appeal the jurisdictional issue. Parties on both sides of a class or representative action should beware this potential outcome in their removal strategies. Finally, as an added bonus for practitioners, this case—both the majority and the dissent—is chock-full of citations to statutory interpretation cases waiting to be cited in future briefs.