## F I L E D United States Court of Appeals Tenth Circuit 

### May 12, 2006
Elisabeth A. Shumaker Clerk of Court PUBLISH
UNITED STATES COURT OF APPEALS

TENTH CIRCUIT

PRIME CARE OF NORTHEAST KANSAS, LLC; NEW CENTURY HEALTH QUALITY ALLIANCE, INC.; JAMES MIRABILE, M.D., P.A.; PAINCARE, P.A.; KANSAS CITY UROLOGY CARE, PA; THE DRAKE INSTITUTE, PA; MIDWEST NEUROSURGERY ASSOCIATES, PA; COLLEGE PARK FAMILY CARE CENTER, PA; UNITED MEDICAL GROUP, LLC; KANZA MULTISPECIALITY GROUP, PA; STATLAND CLINIC LTD, PA; HEARTLAND PRIMARY CARE, PA; KANSAS CITY ALLERGY AND ASTHMA ASSOCIATES, PA; NELSON HARMON AND KAPLAN, M.D.S., CHTD; HEAD & NECK SURGERY OF KANSAS CITY, PA; CONTEMPORARY WOMEN’S CENTRE, LLC; CYNTHIA ROMITO, MD; ASSOCIATED ORTHOPEDICS, PA; DICKSON-DIVELY MIDWEST ORTHOPEDIC CLINIC, INC.,

Plaintiffs-Appellees,

v. HUMANA INSURANCE COMPANY; UNITED HEALTHCARE INSURANCE COMPANY, INC.; COVENTRY HEALTH & LIFE INSURANCE COMPANY, No. 06-3024* After examining the briefs and appellate record, th is panel has determined

unanimously to grant the parties’ request for a dec ision on the briefs without oral argument. See Fed. R. App. P. 34(f); 10th Cir. R. 34.1(G). The case is therefore ordered submitted without oral argument. -2- Defendants-Appellants, and
BLUE CROSS AND BLUE SHIELD OF KANSAS CITY, INC.; BLUE CROSS AND BLUE SHIELD OF KANSAS, INC.; GOOD HEALTH HMO, INC; PREMIER HEALTH, INC.; TOTAL HEALTH CARE, INC.; COVENTRY SERVICES CORPORATION, doing business as Coventry Health Care, Inc.,

Defendants.

APPEAL FROM THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF KANSAS (D.C. No. 05-CV-2227-KHV)

Submitted on the briefs: * Douglas M. Weems, Barry L. Pickens, Spencer Fane Br itt & Browne, LLP, Jeffrey J. Simon, Leonard L. Wagner, Husch & Eppenb erger, LLC, Kansas City, Missouri, H. Reed Walker, Law Offices of H. Reed Wa lker, P.A., Overland Park, Kansas, for Appellants. R. Frederick Walters, Walters Bender Strohbehn & Va ughn, P.C., Kansas City, Missouri, for Appellees.-3-

Before BRISCOE , McKAY , and BRORBY , Circuit Judges.

BRISCOE , Circuit Judge.

The Class Action Fairness Act of 2005 (CAFA), Pub. L. No. 109-2, 119 Stat. 4, amended 28 U.S.C. § 1332(d) to confer federal jurisdiction over class actions involving at least 100 members and over $5 million in controversy when minimal diversity (between any defendant and any pl aintiff class member) is met. CAFA also added its own removal statute, permitting any defendant to remove a qualifying action without regard to the residence o r consent of other defendants,

see 28 U.S.C. § 1453(b), and providing discretionary appellate rev iew of rulings on motions for remand notwithstanding the extant bar in 28 U.S.C. § 1447(d) to appeals from remand orders, see 28 U.S.C. § 1453(c)(1). CAFA applies “to any civil action commenced on or after [February 18, 20 05].” 119 Stat. at 14. The question raised here is whether CAFA permits the re moval of a class action filed before the Act’s effective date if the removing def endant was first added by amendment after the effective date. The district c ourt held CAFA does not apply in these circumstances and remanded the case to state court. On de novo review,

see, e.g. , Bush v. Cheaptickets, Inc. , 425 F.3d 683, 686 (9th Cir. 2005); see also1 This court granted defendants-appellants’ applicati on for appeal by order

dated January 20, 2006. The sixty-day deadline fordisposition of such an appeal specified in § 1453(c)(2) was extended, on agreement of the parti es, until May 18, 2006, pursuant to § 1453(c)(3)(A). -4- Dallis v. Martin , 929 F.2d 587, 589 (10th Cir. 1991), we vacate the district court’s order and remand for further proceedings. Plaintiffs filed this class action in Kansas state court on February 14, 2005. They subsequently amended the pleadings several tim es, to correct and clarify party designations. On April 22, 2005, the state c ourt granted them leave to file a fifth amended petition, in which they first named D efendants Humana Insurance Company, Coventry Health & Life Insurance Company, and United Healthcare Insurance. The state court also specifically held that the amended petition related back to the initial filing date. A month later, th e newly added defendants removed the case under § 1453(b). Plaintiffs moved for remand, arguing that CAFA was not applicable because the case had been c ommenced prior to the Act’s effective date. The removing defendants oppo sed the motion, contending that as to them the action commenced a month after CAFA’s effective date, when they were first added to the pleadings. The distri ct court granted the motion for remand, and the removing defendants appealed. 1 In the short time since CAFA’s passage, courts have adopted at least three distinct positions on the issue of commencement-by- amendment for purposes of-5-

removal under the Act. A few, like the district co urt here, insist that a “civil action” can “commence” only once and, thus, take th e absolute position that if an action was commenced prior to CAFA’s effective date , no post-CAFA amendment of the pleadings can bring the Act into play. See Comes v. Microsoft Corp. , 403 F. Supp. 2d 897, 903 (S.D. Iowa 2005) (followin g Weekley v. Guidant Corp. , 392 F. Supp. 2d 1066, 1067-68 (E.D. Ark. 2005)). M ost courts, however, concede that the addition of a new claim sufficiently disti nct from prior pleadings may commence a new action removable under CAFA by the a ffected parties. The latter courts also generally agree that whetheran amendment is distinct enough to give rise to a new commencement date is p roperly gauged by the forum state’s law governing the relation-back of pleading amendments. This broad consensus splits into two opposing views, however, regarding the treatment of amendments that add new defendants to a case. On o ne view, the relation-back analysis controls the commencement question for all amendments, no distinction being made for amendments adding new defendants (of course, the requirements that must be met for amendments adding defendants t o relate back are strict). See Plubell v. Merck & Co. , 434 F.3d 1070, 1071-72 (8th Cir. 2006); see, e.g. , Eufaula Drugs, Inc. v. ScripSolutions , 2005 WL 2465746, at *2-*4 (M.D. Ala. Oct. 6, 2005) (holding CAFA inapplicable where amen dment adding defendant related back to pre-CAFA filing); New Century Health Quality Alliance, Inc. v.2 We have held that a case commenced in state court p rior to CAFA is not

“recommenced” post-CAFA by the act of removal itsel f. See Pritchett v. Office Depot, Inc. , 420 F.3d 1090, 1094-97 (10th Cir. 2005). -6- Blue Cross & Blue Shield of Kan. City, Inc. , 2005 WL 2219827, at *3-*5 (W.D. Mo. Sept. 13, 2005) (same). On the other vie w, the relation-back analysis controls for all amendments except those adding def endants, which are categorically treated as commencing a new case as t o the added defendants. See Braud v. Transp. Serv. Co. , 2006 WL 880051, at *1-*4 (5th Cir. Apr. 6, 2006) (following approach stated, but not yet dispositive ly applied, by Seventh Circuit in such cases as Schillinger v. Union Pac. R.R. , 425 F.3d 330, 333 (7th Cir. 2005) and Knudsen v. Liberty Mut. Ins. Co. , 411 F.3d 805, 807 (7th Cir. 2005)); Adams v. Fed. Materials Co. , 2005 WL 1862378, at *3-4 (W.D. Ky. July 28, 2005) (same). In sum, courts addressing post-CAFA pleading amendm ents have held that such amendments either (1) do not affect the pre-CA FA commencement date of the case; (2) affect the commencement date only if they do not relate back; or (3) affect the commencement date if they do not rel ate back or if they add new defendants to the case. This circuit has not yet c onfronted this specific issue. 2 For the reasons that follow, we now adopt the secon d position. The view that post-CAFA amendments do not affect pr e-CAFA commencement dates turns on Congress’ use of the ph rase “civil action” in-7-

CAFA’s effective date provision. Noting that “[a] civil action, viewed as the whole case, the whole proceeding, can only be comme nced once,” the courts embracing this position concede that “new claims may dramatically change the action” and “may or may not ‘relate back’ to the or iginal complaint,” but they still conclude that such proceedings cannot alter the fac t that the civil action “commenced when the initial complaint was filed.” Weekley , 392 F. Supp. 2d 1067-68; see Comes , 403 F. Supp. 2d at 903. For these courts, it is of controlling significance that “Congress did not say[CAFA] would apply to actions in which the complaint was amended after February 18, 2005 . . . unless the amendment related back to the initial complaint.” Weekley , 392 F. Supp. 2d at 1068 (emphasis added); see Comes , 403 F. Supp. 2d at 903 (“If Congress had intended the CAFA to apply to currently pending cases that w ere amended after the enactment of the CAFA, it could have explicitly don e so.”). A pointed rebuttal to this rationale for adopting t he first position, i.e., that post-CAFA amendments do not affect pre-CAFA commenc ement dates, has been given by one of the courts adopting the third posit ion, i.e., that post-CAFA amendments that do not relate back or that add defe ndants give rise to new commencement dates. In Braud, the district court held that an amendment adding a defendant did not commence a new action, relying on the same basic point cited above from Weekleyand Comes . The Fifth Circuit reversed, noting that the-8-

existence of established legal principles relating commencement to amendment (in this instance, amendments adding defendants) belied the idea that Congress’ general reference to commencement of a civil action without an explicit direction for the treatment of pleading amendments must rende r pleading amendments categorically irrelevant: [T]he district court’s remark that “there’s no spec ific language in the CAFA legislation itself . . . that would support th at position that if a new party was added [post-CAFA to a pre-CAFA case then] CAFA would apply” misses the mark. Precisely because CA FA does not define “commencement” of an action, it is obvious t hat CAFA is not intended to replace caselaw deciding when a lawsuitis considered “commenced” as to a new defendant. The caselaw holds that generally “a party brought i nto court by an amendment, and who has, for the first time, an o pportunity to make defense to the action, has a right to treat th e proceeding, as to him, as commenced by the process which brings him i nto court. United States v. Martinez , 195 U.S. 469, 473 . . . (1904) (citing Miller v. M’Intyre , 31 U.S. (6 Pet.) 61, 8 L.Ed. 320 (1832)). As the MillerCourt explained, this is because it “would be a no vel and unjust principle to make the defendants responsible for a proceeding of which they had no notice.” Miller , 61 U.S. at 64. Braud, 2006 WL 880051, at *2. There is, however, a broader point to be made here that reinforces Braud’s contextual/historical criticism of the absolute pos ition reflected in Weekleyand
Comes but at the same time brings some of the same criti cism to bear on the position espoused in Braud and the Seventh Circuit cases. Underlying Braud’s reliance on the Martinez and M’Intyre cases in the quoted passage is the principle,-9-

repeatedly invoked by the Supreme Court, that “Cong ress is presumed to enact legislation with knowledge of the law and a newly-e nacted statute is presumed to be harmonious with existing law and judicial concep ts.” Garcia v. Dep’t of Homeland Sec. , 437 F.3d 1322, 1336 (Fed. Cir. 2006) (collecting Supreme Court cases); see Bd. of County Comm’rs v. U.S. E.E.O.C. , 405 F.3d 840, 845 (10th Cir. 2005). Braud

fails to acknowledge, however, that the relevant l aw and judicial concepts in the pleading-amendment context have dev eloped significantly since the Martinezcase was decided in 1904. With the issuance of the Federal Rules of Civil Pro cedure in 1938, pleading amendments were controlled by Rule 15(c), which did not maintain the simple equation of amendment and commencement reflected in the old law cited by Braud, but looked instead to more recent relation-back p rinciples. Indeed, when courts failed to heed this move from automatic reco gnition of a new proceeding to a nuanced relation-back analysis, the Rule was amen ded in 1966 “to state more clearly when an amendment of a pleading changing [d efendants] shall ‘relate back’ to the date of the original pleading.” Advis ory Committee’s 1966 Note on Subd. (c) (“Analyses in terms of ‘new proceedings’ is traceable to [cases that] antedate the adoption of the Rules which import dif ferent criteria for determining when an amendment is to ‘relate back.’ As lower co urts have continued to rely on [outdated] cases despite the contrary intent of the Rules, clarification of Rule3 We do not gainsay the equitable appeal of allowing a defendant added to a

suit by a post-CAFA amendment to remove the case th at has just been asserted

“ against it .” Schillinger , 425 F.3d at 333 (quotation omitted). But this ap peal quickly diminishes once it is recognized that the r elation-back analysis prescribed by both Rule 15(c) and its Kansas counterpart, Kan. Stat. Ann. § 60-215(c)(2), already accounts for the “new case against this def endant” idea: these rules specify that an amendment adding a defendant relate s back to the original pleading only if the defendant “received such notic e of the institution of the (continued...) -10- 15(c) is considered advisable.”). Especially telli ng here is the Advisory Committee’s pointed clarification that, when the ad dition of a defendant satisfies relation-back criteria, “characterization of the am endment as a new proceeding is not responsive to the realty [sic], but is merely q uestion-begging; and to deny relation back is to defeat unjustly the claimant’s opportunity to prove his case.” Id. We note that, as the Kansas rule applied in this case reflects, state relation-back doctrines have largely tracked the fe deral rule. Steven S. Sparling, Note, Relation Back of “John Doe” Complaints in Federal Court: What You
Don’t Know Can Hurt You , 19 Cardozo L. Rev. 1235, 1266 & nn.250, 251 (Dec. 1997). Thus, when Congress tied CAFA’s effective date to the legal concept of commencement, it did so presumptively aware that – contrary to the principle invoked by the Fifth and Seventh Circuit cases appl ying CAFA – an amendment adding a defendant does not necessarily commence a new action as to that defendant. 3 Nor, contrary to Comes and Weekley , are commencement and3 (...continued)

action that the party [will/would] not be prejudice d in maintaining a defense” and, in fact, “knew or should have known that, but for amistake concerning the identity of the proper party, the action would have been brought against the party.” In effect, an amendment adding defendants to a case will relate back, and thus not commence a new case, only when it really i s not a new case against those defendants.

4 It is worth noting that the unqualified disregard o f any post-CAFA pleading amendments espoused by Comes and Weekleyentails the practically untenable result that once a pre-CAFA case is filed, the plai ntiff can tack on new causes of action so substantively independent of the original case that they would be properly treated as filed after CAFA’s effective date for all legal purposes controlled by Rule 15(c) except for CAFA

. -11- amendment properly seen as utterly unrelated matter s. 4 Rather, the relevant landscape in which both of these legal concepts res ide has for some time been governed by the relation-back principle. This is t he fundamental underpinning for the position that the effect of post-CAFA amendment s should be a function of whether they relate back to the pre-CAFA filing. There is one other justification invoked for the po sition adopted by the Fifth and Seventh Circuits that we should address. The argument notes that the general removal statute grants newly served defenda nts (served with the initial pleading if the case is removable or with an amende d pleading if the amendment makes the case removable) thirty days to remove, see 28 U.S.C. § 1446(b), and from this concludes that a defendant added after CA FA’s effective date should be able to remove because it has been given this proce dural window in which to do

so. Knudsen , 411 F.3d at 807; see Braud, 2006 WL 880051, at *3 (following-12-

Knudsen rationale); Adams , 2005 WL 1862378, at *3 (same). The jump from premise to conclusion here turns on a conflation of two concepts that should be kept distinct: a substantive basis for removal(here the federal action created by CAFA) and a procedural opportunity to effect removal on that substantive basis. A procedural opportunity to assert a substantive ri ght does not create the right to be asserted; the opening of a window to seek remova l under CAFA merely raises the question of whether CAFA is applicable to the c ase at that time, it does not answer it. Indeed, this particular conflation of s ubstantive and procedural removability is very much at odds with our holding in Pritchett , see supraat 6, n.2, which took pains to clarify that CAFA’s substantive applicability to a case did not turn on the procedural event of removal. Moreover, the confusion of a removal window with th e substantive right to remove would lead to absurd consequences, which canbe illustrated by a simple example. Because § 1446(b) grants the defendant thirty days to remove a case following service of the complaint, if a removal wi ndow after CAFA’s effective date is enough to trigger application of CAFA, then CAFA actually applies to all civil actions commenced after or up to thirty days before its designated effective date – a bizarre result contrary to the plain wordi ng of the Act’s effective date. For the reasons discussed above, we hold that wheth er a post-CAFA amendment triggers a substantive right of removal u nder CAFA by the affected5 We note the state court’s initial (ex parte) order holding that the operative

amendment related back is inherently non-final and subject to reconsideration in federal court. See 16 James Wm. Moore, Moore’s Federal Practice § 107.31[3] (3d ed. 2006); see also 28 U.S.C. § 1450.

6 As noted, the prevailing view is that this determin ation should be governed by the law of the state in which the action was com menced. Given the essentially identical text of Rule 15(c) and Kan. Stat. Ann. § 215(c), see supraat 10 n.3, it appears unlikely that a choice between federal and state law is necessary to our resolution of this case. At this juncture, however , we do not express an opinion as to whether federal or state law should control. Of course, it is still possible that federal and state case law applying the same l anguage has diverged in some material respect. We therefore do not foreclose th e district court’s consideration of the matter on remand in the event the parties de velop opposing positions based on a demonstrable divergence between federal and st ate law on the facts of this case. -13- parties depends on whether the amendment relates ba ck to the pre-CAFA pleading that is being amended. Because the district court followed the absolute approach reflected in Comes and Weekley , under which no post-CAFA amendment would grant removal rights under the Act, it did not cons ider whether the amendment at issue properly related back to the commencement of the case when it remanded the proceeding to state court. 5 We therefore vacate the district court’s order an d remand to the district court for further proceeding s consistent with this opinion, in particular for a determination whether the amend ment adding the removing defendants related back to the pre-CAFA commencement of this action. 6
The order of the district court is VACATED and the cause REMANDED to the district court for further proceedings.-14-