Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-ca9-10-55269/USCOURTS-ca9-10-55269-0/pdf.json

Nature of Suit Code: 442
Nature of Suit: Civil Rights Employment
Cause of Action: 

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FOR PUBLICATION

UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

UNITED STEEL, PAPER & FORESTRY, 

RUBBER, MANUFACTURING, ENERGY,

ALLIED INDUSTRIAL & SERVICE

WORKERS INTERNATIONAL UNION,

AFL-CIO, CLC, on behalf of its

members employed by defendants;

RICHARD FLOYD, individually and

on behalf of all similarly situated No. 10-55269 current and former employees; and

EDUARDO D.C. No. CARBAJAL, individually

and on behalf of all similarly  2:08-cv-03693-

situated current and former RGK-3

employees, OPINION

Plaintiffs-Appellees,

v.

SHELL OIL COMPANY; EQUILON

ENTERPRISES LLC, dba Shell Oil

Products US; and TESORO REFINING

AND MARKETING COMPANY,

Defendants-Appellants. 

Appeal from the United States District Court

for the Central District of California

R. Gary Klausner, District Judge, Presiding

Argued and Submitted

April 7, 2010—Pasadena, California

Filed April 21, 2010

Before: Ferdinand F. Fernandez, Barry G. Silverman, and

Susan P. Graber, Circuit Judges.

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Opinion by Judge Silverman

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COUNSEL

Timothy M. Rusche, Seyfarth Shaw LLP, Los Angeles, California; and Deanna L. Ballesteros and Angel Gomez, Epstein

Becker & Green, P.C., Los Angeles, California, for the

defendants-appellants. 

Robert A. Cantore, Gilbert & Sackman, Los Angeles, California, for the plaintiffs-appellees.

OPINION

SILVERMAN, Circuit Judge:

Defendants removed this putative class action from state

court pursuant to the Class Action Fairness Act of 2005

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(CAFA),1

 28 U.S.C. §§ 1332(d), 1453. After denying class

certification, the district court concluded that it no longer had

jurisdiction and remanded the case to state court. We accepted

defendants’ appeal to consider whether the denial of class certification divests federal courts of jurisdiction over cases

removed under § 1332(d). Today we join the Seventh and

Eleventh Circuits in holding that it does not. If the putative

class action was properly removed to begin with, the subsequent denial of Rule 23 class certification does not divest the

district court of jurisdiction. The case remains removed and

is not to be remanded to state court.

Procedural Background

Plaintiffs United Steel, Paper & Forestry, Rubber, Manufacturing, Energy, Allied Industrial & Service Workers International Union, AFL-CIO, CLC (USW), Richard Floyd, and

Eduardo Carbajal filed their class action against Shell Oil

Company, Equilon Enterprises LLC, and Tesoro Refining and

Marketing Company in California state court. The complaint

asserts that defendants’ oil refineries violated California Business & Professions Code § 17200 and failed to provide meal

periods, rest periods, timely and accurate wage statements,

and wages due at the time of termination in violation of California Labor Code §§ 201, 201.7, 202, 203, 226, 226.3, 226.7,

and 512. 

The defendants removed the case to federal court, asserting

jurisdiction under 28 U.S.C. § 1332(d)(2):

(2) The district courts shall have original jurisdiction of any civil action in which the matter in controversy exceeds the sum or value of $5,000,000,

exclusive of interest and costs, and is a class action

in which—

1Pub. L. No. 109-2, §§ 4-5, 119 Stat. 4, 9-13 (2005). 

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(A) any member of a class of plaintiffs is a

citizen of a State different from any defendant; 

(B) any member of a class of plaintiffs is a

foreign state or a citizen or subject of a foreign state and any defendant is a citizen of

a State; or 

(C) any member of a class of plaintiffs is a

citizen of a State and any defendant is a foreign state or a citizen or subject of a foreign

state. 

Section 1332(d)(1)(B) defines “class action” as

any civil action filed under rule 23 of the Federal

Rules of Civil Procedure 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[.]

Section 1332(d)(8) states:

This subsection shall apply to any class action

before or after the entry of a class certification order

by the court with respect to that action[.]

Section 1332(d)(1)(C) defines “class certification order” as

“an order issued by a court approving the treatment of some

or all aspects of a civil action as a class action.”

Putative class actions satisfying the class action definition

and the numerosity requirement of § 1332(d)(5)(B)2 may be

removed to federal court under 28 U.S.C. § 1446. See 28

2The number of members of all proposed plaintiff classes in the aggregate must be at least 100. 

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U.S.C. § 1453(a), (b). In our case, the putative class action

that plaintiffs filed in state court satisfied § 1332(d)’s numerosity and aggregated amount-in-controversy requirements.

Accordingly, Plaintiffs could have brought the action in federal court. Defendants therefore were within their rights to

remove the case to federal court pursuant to § 1453. Up to this

point, everyone agrees.

After removal, plaintiffs sought certification of two classes

of employees from the three refineries owned by defendants.

The district court denied certification, concluding that class

resolution was not superior to other methods of adjudication,

as must be found under Rule 23(b)(3) as a prerequisite to

class certification. The district court reasoned that a class

action would be difficult to manage and that damages would

be difficult to calculate for two classes involving at least

seven job titles and three refineries owned by different companies with different collective bargaining agreements. 

The district court then granted plaintiffs’ motion to remand,

holding that the case no longer satisfied CAFA’s jurisdictional requirements because there was “no reasonably foreseeable possibility” that a class action would be certified and no

other basis for federal jurisdiction. The district court reasoned

that a denial of class certification is not a post-removal change

of a jurisdictional fact, but rather a legal conclusion that

CAFA jurisdiction never existed. 

Then the jurisdictional ping-pong game began. After the

district court bounced the case back to state court, plaintiffs

filed two new class actions in state court and moved to amend

the remanded action, creating three separate pending putative

class actions in state court. Defendants then volleyed the two

new cases back to federal court by removing them once again,

and the state court stayed the remanded action pending this

appeal. Presumably, if the federal court again denies class certification, the federal cases will bounce back to state court

once more, if that is what the statute bizarrely permits.

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Jurisdiction and Standards of Review

We have jurisdiction pursuant to 28 U.S.C. § 1453(c) and

must “complete all action” on this appeal, “including rendering judgment, not later than 60 days after” our February 23

order, i.e., April 26, 2010. 28 U.S.C. § 1453(c)(2); Serrano v.

180 Connect, Inc., 478 F.3d 1018, 1020 (9th Cir. 2007); Bush

v. Cheaptickets, Inc., 425 F.3d 683, 685 (9th Cir. 2005). We

review the district court’s remand order de novo. Serrano,

478 F.3d at 1020. We also review CAFA construction and

applicability de novo. Bush, 425 F.3d at 686.

Discussion

[1] Congress passed the Class Action Fairness Act “primarily to curb perceived abuses of the class action device

which, in the view of CAFA’s proponents, had often been

used to litigate multi-state or even national class actions in

state courts.” Tanoh v. Dow Chem. Co., 561 F.3d 945, 952

(9th Cir.), cert. denied, 130 S.Ct. 187 (2009). To achieve its

purposes, CAFA provides expanded original diversity jurisdiction for class actions meeting the amount in controversy

and minimal diversity and numerosity requirements set forth

in 28 U.S.C. § 1332(d)(2). Serrano, 478 F.3d at 1020-21.

CAFA also covers more than traditional class actions by providing for removal of “mass actions.” Tanoh, 561 F.3d at 952.

[2] Even though CAFA indisputably creates original federal jurisdiction prior to class certification, the statute does not

say whether the post-removal denial of class certification

divests the federal courts of jurisdiction—or, as plaintiffs

argue, whether class certification is a necessary condition to

continued jurisdiction. Section 1332(d) does not explicitly

require class certification for continued jurisdiction, nor does

§ 1453 expressly require remand after denial of class certification.

[3] Only the Seventh and Eleventh Circuits have squarely

considered this issue, and both have held that the postUNITED STEEL v. SHELL OIL CO. 6029

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removal denial of class certification does not divest federal

courts of jurisdiction. See Cunningham Charter Corp. v.

Learjet, Inc., 592 F.3d 805, 806-07 (7th Cir. 2010); Vega v.

T-Mobile USA, Inc., 564 F.3d 1256, 1268 n.12 (11th Cir.

2009).

In Vega, the Eleventh Circuit held that the district court

abused its discretion by certifying the class, vacated the certification order, and remanded for Vega’s claims to proceed as

individual claims. 564 F.3d at 1279-80. In a footnote, however, the Eleventh Circuit held that the failure to show

numerosity does not divest federal courts of CAFA jurisdiction. Id. at 1268 n.12. The court reasoned that (1)

§ 1332(d)(5)(B)’s jurisdictional limitation applies to “proposed” classes; (2) “jurisdictional facts are assessed at the

time of removal”; and (3) “post-removal events [(including

non- or de-certification)] do not deprive federal courts of subject matter jurisdiction.” Id. (emphasis added). 

In Cunningham, the Seventh Circuit followed Vega and

reasoned that, when the statutory text is read in context, the

federal jurisdictional question must be analyzed as of when

the suit is filed as a class action, not when the class is or is

not certified. 592 F.3d at 806. The court interpreted

§ 1332(d)(8)—that CAFA applies “to any class action before

or after the entry of a class certification order”—to mean that

a “defendant can wait [if it wants to] until a class is certified

before deciding whether to remove the case to federal court”

and “implies at most an expectation that a class will or at least

may be certified eventually.” Id. The court interpreted

§ 1332(d)(1)(C)’s corresponding definition of “class certification order” to mean only “that a suit filed as a class action

cannot be maintained” as a class action without a certification

order. Id.

As the court observed, the idea that a putative class action,

once properly removed, stays removed, 

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vindicates the general principle that jurisdiction once

properly invoked is not lost by developments after a

suit is filed, such as a change in the state of which

a party is a citizen that destroys diversity. E.g., St.

Paul Mercury Indemnity Co. v. Red Cab Co., 303

U.S. 283, 293-95, 58 S.Ct. 586, 82 L.Ed. 845 (1938).

The general principle is applicable to this case

because no one suggests that a class action must be

certified before it can be removed to federal court

under the Act; section 1332(d)(8) scotches any such

inference.

Id. at 807 (citation omitted).

[4] Had Congress intended that a properly removed class

action be remanded if a class is not eventually certified, it

could have said so. We think it more likely that Congress

intended that the usual and long-standing principles apply —

post-filing developments do not defeat jurisdiction if jurisdiction was properly invoked as of the time of filing.3

Conclusion

[5] In sum, we hold that continued jurisdiction under

§ 1332(d) “does not depend on certification.” Id. at 806. If a

defendant properly removed a putative class action at the getgo, a district court’s subsequent denial of Rule 23 class certification does not divest the court of jurisdiction, and it should

not remand the case to state court.

REVERSED AND REMANDED.

3We recognize, as the Cunningham court did, exceptions to the general

rule of “once jurisdiction, always jurisdiction” — such as when a case

becomes moot in the course of litigation or when there was no jurisdiction

to begin with because the jurisdictional allegations were frivolous from the

start. See 592 F.3d at 807. 

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