## United States Court of App eals

F O R T H E E I G H T H

C I R C U I T

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No. 1 1- 34 45

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Jo hn M. Ro lwi ng , *

* App el le e, *

* App eal fro m

th e Uni te d S ta te s

v. * Dis tri ct Co ur t fo r th e

* East ern Dis tri ct of M is so ur i.

Nes tl e Hol di ng s, In c., *

* App el la nt

. *

__ __ __ __ __ _

Su bm it te d: Decem

be r 14 , 20 11
Fi le d: Feb ru ary 2, 2 01 2

__ __ __ __ __ _

Befo re MUR PHY, BOW MAN, an d GRUENDER Ci rcu it Ju dg es

.

__ __ __ __ __ _
GRUENDER, Circ ui t J ud ge

.

Nes tl e Hol di ng s, In c. (“ Nes tl e”) app eal s th e di st ric t co ur t’s or de r rem an di ng 1

th is pu ta ti ve cl as s act io n to th e juri sd ic ti on of th e st at e co ur ts of Mi ss ou ri. Bec au se

at th e ti m e th e cas e was rem ov ed it di d no t m eet th e req ui rem en ts fo r fed eral su bjec t

m at te r juri sd ic ti on un de r th e Cl as s Acti on Fai rn es s Act of 20 05 (“ CAFA”), 28 U.S.C.
§§ 13 32 (d ), 14 53 , 17 11 -1 5, we af fir m th e o rd er o f th e d is tri ct co ur t.

The Hon or ab le Tho m as C. Mu m m ert

, Uni te d St at es Mag is tra te Ju dg e fo r th e 1

East ern Dis tri ct of Mi ss ou ri, to who m th e cas e was refe rred by co ns en t of th e pa rti es
pu rs ua nt to 28 U.S.C. § 6 36 (c).I. BACKGRO UND

On Ja nu ary 15

, 20 01

, Nes tl e ag reed to a m erg er wit h Ral st on Pu rin a Co m pa ny

th at pr ov id ed fo r th e cas h pu rch as e of Ral st on Pu rin a’s co m m on st oc k by Nes tl e. The

m erg er ag reem en t co nt ai ne d a ch oi ce-o f-l aw pr ov is io n se le ct in g Mi ss ou ri la w as

co nt ro ll in g it s te rms

. Th e mer ge r was co m pl et ed on Decem

be r 12

, 20 01

. On

Decem be r 18

, 20 01

, N e s tl e pa id Ral st on Pu rin a bo ok -en try sh areh ol de rs a to ta l of

$ 8

, 8 80 ,80 9,7 66 .50 fo r th ei r 26 5,0 98 ,79 9 ou ts ta nd in g co m m on sh ares of Ral st on

Pu rin a.

Ral st on Pu rin a bo ok -en try sh a r e h o l d er Jo hn M. Ro lwi ng fil ed th is pu ta ti ve
cl as s acti on in Mi ss ou ri s ta te co ur t o n M arch 30 , 20 11 , on be ha lf of hi m se lf and al l

ot h e r R a l s t o n Pu rin a bo ok -en try sh areh ol de rs at th e ti m e of th e ex ecu ti on of th e

m erg er ag reem en t (“ th e cl as s” ). Ro lwi ng cl ai m s th at Nes tl e was req ui red to pa y th e
cl as s on Decem

be r 12

, th at Nes tl e’s Decem be r 18 pa y m en t was de li nq ue nt

, an d th at

th e cl as s i s en ti tl ed to in te res t o n t he de li nq ue nt pa y m en t. Nes tl e rem ov ed th e cas e

to fed eral co ur t on May 17

, 20 11

, in vo ki ng CAFA-p ro vi de d juri sd ic ti on un de r 28

U.S.C. § 13 32 (d ). It th en fil ed a m ot io n to di sm is s on th e ba si s of a pr io r res ol ut io n by th e st at e co ur ts of Ohi o of a pu ta ti ve cl as s act io n, br ou gh t by th e sa m e at to rn ey on
b e h a l f of a di ffer en t na m ed pl ai nt iff in th at st at e, th at cl ai m ed da m ag es un de r t h e

sa m e th eo ry

for th e sa m e cl as s.

Befo re th e di st ric t co ur t co ul d ru le on Nes tl e’s moti on to di sm is s, Ro lwi ng

mo v e d t o rem an d th e cas e to Mi ss ou ri st at e co ur t, arg ui ng th at th e am ou nt in

co nt ro ve rs y was no t in ex ces s of $ 5 mill io n, as req ui red by § 13 32 (d ). Nes tl e

res po nd ed by ass ert in g t ha t Ro lwi ng ’s th eo ry of t he cas e cl earl y

co m pr eh en de d t he

po ss ib il it y of da m ag es in ex ces s of $5 m il li on

. The in te res t du e on Nes tl e’s pa y m en t

to th e cl as s, cal cu la te d at an an nu al iz ed rat e of ni ne pe rcen t as req ui red by Mi ss ou ri

la w, se e Mo

. Rev

. S ta t. § 40 8.0 20

, wou ld ex ceed $2 m il li on fo r each da y th at th e

pa y m en t was la te

. If pa y m en t ha d b e e n d u e o n Decem be r 12 as Ro lwi ng al le ge s,

-2-N e s t l e cl ai m s it wou ld be ex po se d to da m ag es well in ex ces s of th e $5 m il li on

th res ho ld

.

To co un te r an y at te m

pt at rem ov al

, ho wev er, Ro lwi ng ’s co m pl ai nt in cl ud ed a

pr ay er fo r rel ie f req ue st in g “ jud gm en t ag ai ns t de fen da nt in an am ou nt th at is fai r an d

reas on ab le in ex ces s of $2 5,0 00

, b u t n o t t o ex ceed $4 ,99 9,9 99 .” The pr ay er st at ed

fu rth er: “ Pl ai nt iff an d th e cl as s do no t se ek —an d wil l no t acce pt —an y r e co ve ry of

da m ag es (in th e fo rm of st at ut or y in te res t) an d an y ot he r rel ie f, in to ta l, in exc es s of

$4 ,99 9,9 99 .” Ro lwi ng d i d t h i s , a cco rd in g to hi s co m pl ai nt , e xp res sl y so as “ no t to

pr ov id e an y Uni te d St at es Dis tri ct Co ur t wit h juri sd ic ti on un de r th e te rm s of th e Cl as s
Acti on Fai rn es s Act of 20 05

. . . or an y ot he r pr ov is io n( s) of la w.” Ro lwi ng al so

in cl ud ed two st ip ul at io ns wit h hi s co m pl ai nt : on e st at in g th at as na m ed pl ai nt iff an d

pu ta ti ve cl as s rep res en ta ti ve he wou ld no t s e ek or acce pt an y reco ve ry in ex ces s of

$4 ,99 9, 9 9 9 o n h i s own be ha lf or on th e be ha lf of th e cl as s, an d a se co nd si gn ed by

hi s co un se l st at in g th at no at to rn ey s’ fees wou ld be so ug ht or acce pt ed ot he r th an on

a co nt in ge nc y ba si s ou t of th e m ax im um reco ve ry of $4 ,99 9,9 99 pr ov id ed fo r by th e

ot he r st ip ul at io n. As wit h th e co m pl ai nt ’s pra y er fo r rel ie f, bo th st ip ul at io ns st at ed

th at t h e l im it at io n on da m ag es so ug ht was fo r th e pu rp os e of de feat in g fed eral
juri sd ic ti on

.

Th e di st ric t co ur t gr an te d Ro lwi ng ’s m ot io n to rem an d on th e ba si s o f t h i s
di sc la im er of da m ag es an d de ni ed as m oo t a se co nd m ot io n to rem an d fil ed by

Ro lwi ng on th e ba si s of th e se cu rit ie s ex cep ti on in 28 U.S.C. § 13 32 (d )(9 )(C)

. Nes tl e

fil ed a pe ti ti on pu rs ua nt to 28 U.S.C. § 14 53 (c) requ es ti ng pe rm is si on to ap pe al th e
di st ric t co ur t’s re m an d o rd er, wh ic h we g ran te d.

II

. DISCUSS IO N

CAFA pr ov id es fo r fed era l s u b je ct m at te r juri sd ic ti on ov er qu al ifyin g cl as s

act io ns whe re th e ag gr eg at e amo u n t i n co nt ro ve rs y ex ceed s $5 m il li on

. 28 U.S.C.

-3-§ 13 32 (d ). Su ch cl as s acti on s gen eral ly are rem ov ab le

, an d th e us ua l on e-year ti m e

li m it on di ve rs it y -p rem is ed rem ov al is in ap pl ic ab le

. 28 U.S.C. § 14 53

. Cert ai n cl as s

act io ns de al in g ei th er wit h se cu rit ie s or cl ai m s rel at in g to bu si ne ss gove rn an ce ari si ng

ou t of st at e la w are ex cep te d fro m th is ge ne ral ru le an d are no t rem ov ab le

. 28 U.S.C.
§ 14 53 (d ). The co ur ts of a p pe al s are au th or iz ed to acce pt an ap pe al fro m an or de r

gr an ti ng or d en y in g a m ot io n t o re m an d a cla ss act io n. 2 8 U.S.C. § 14 53 (c).

“ W e rev ie w de no vo a di st ric t co ur t’s or de r to rem an d a rem ov ed cas e fo r la ck

of su bjec t m at te r juri sd ic ti on .” Bell v. Her sh ey Co

. , 5 5 7 F

. 3 d 95 3, 95 6 (8 th Ci r.

20 09 ). In th e CAFA co nt ex t, th e pa rty se ek in g rem ov al be ars th e bu rd en of pr ov in g by a pr ep on de ran ce of the ev id en ce th at th e juri sd ic ti on al req ui rem en ts fo r rem ov al

a r e met

. I

d

. at 95 6- 59

. If th e rem ov in g pa rty m eet s th is bu rd en , th e pa rty se ek in g

rem an d m

us t es ta bl i s h to a le ga l cert ai nt y th at th e req ui rem en ts fo r fed eral
juri sd ic ti on are no t m et

. Id

. at 95 9. Thu s, fo r a rem an d to be jus ti fie d, Ro lwi ng m us t

sh ow th at it is le ga ll y cert ai n th at reco ve ry in th is cas e can no t ex ceed $5 m il li on

. Se e
id

.

R ol win g ha s m ai nt ai ne d th ro ug ho ut th es e pr oc eed in gs th at th e di sc la im er o f

d a mag es gr eat er th an $4 ,99 9,9 99 in hi s pr ay er fo r rel ie f an d th e acco m pa nyin g

st ip ul at io ns m ak es it le ga ll y cert ai n th at th e am ou nt in co nt ro ve rs y can no t ex ceed $5

m il li on

. Nes tl e co un te rs th at (1 ) Mi ss ou ri la w (wh ic h go ve rn ed th e m erg er ag reem en t

an d th eref

or e wou ld co nt ro l th e su it ) wou ld no t gi ve effe ct to th e di sc la im er, an d (2 )

Ro lwi ng ’s pu rp or te d di sc la im er of pa rt of th e c l a s s ’s po te nt ia l reco ve ry is

un en fo rcea bl e be cau se it “ was in co ns is te nt wit h th e in te res ts of an d in br each of hi s
fid uc ia ry du ti es to th e pu ta ti ve cl as s.” Nes tl e co nt en ds th at

, ab se nt cert ai nt y th at th e
di sc la im er wil l be en fo rced

, it is no t a le ga l cert ai nt y th at th e am ou nt in co nt ro ve rs y
is no t i n e xc es s o f $5 m il li on , ren de rin g re m an d i na pp ro pr ia te

.

W e ha ve pr ev io us ly st at ed th at a bi nd in g st ip ul at io n li m it in g da m ag es so ug ht

to an am ou nt no t ex ceed in g $5 m il li on can be us ed to de feat CAFA juri sd ic ti on

. Bell

,

-4-55 7 F.3 d at 95 8 (“ In or de r to en su re th at an y a t t e mp t t o r e m ov e wou ld ha ve be en

un su cces sf

ul

, Bel l co ul d ha ve in cl ud ed a bi nd in g st ip ul at io n wit h hi s pe ti ti on st at in g

th at he wou ld no t se ek da m ag es gr eat er th an th e juri sd ic ti on al m in im um on

rem an d.” ). St ip ul at io ns of th is so rt, whe n fil ed co nt em po ran eo us ly wit h a pl ai nt iff ’s

co m pl ai nt an d no t aft er rem ov al

, ha ve lo ng be en reco gn iz ed as a m et ho d of de feat in g
fed eral juri sd ic ti on in th e no n- CAFA co nt ex t. Se e, e.g

. , De Agu il ar v. Boe in g Co

. , 47 F.3 d 14 04

, 14 12 (5 th Ci r. 19 95 ); In re Sh el l Oil Co.

, 97 0 F.2d 35 5, 35 6 (7t h Cir.

19 92 ) (p er cu ria m ) (“ Lit ig an ts who wan t to pr ev en t rem ov a l m us t fil e a bi nd in g

st ip ul at io n o r affi da vi t wi th th ei r co m pl ai nt s.”)

.

Nes tl e fir st arg ue s th at Ro lwi ng ’s pr ay er fo r rel ie f an d th e st ip ul at io ns are no t

en fo rcea bl e un de r Mi ss ou ri la w an d, th eref or e, no t bi nd in g on th e cl as s. W hi le it is

un c l e a r wha t effe ct

, if an y , Mi ss ou ri la w wou ld gi ve to th e pr ay er fo r rel ie f in

Ro lwi ng ’s co m

pl ai nt

, se e Mo

. Rev

. St at

. § 50 9.0 50 .1(2 ) (p ro hi bi ti ng th e sp eci fic
pl ead in g of da m ag es “ ex cep t to de te rm in e

. . . juri sd ic ti on al au th or it y ,” an d pr ov id in g

th at sp eci fic da m ag e pl ead in gs un de r th at ex cep ti on “ sh al l no t affect th e co nd uc t of

tri al wit h reg ard to st at in g, pro vi ng , or arg ui ng da m ag es ”), it is no t nece ss ary fo r us

to res ol ve th is qu es ti on

. In st ead

, we co nc lu de th at th e st ip ul at io ns are in de pe nd en tl y

en fo rcea bl e un de r th e do ct rin e of jud ic ia l es to pp el an d, th eref or e, bi nd in g wit hi n th e

m ean in g o f Bell

.

Und er Mi ss ou ri la w, “ [t]he do ct rin e of jud ic ia l es to pp el pr ov id es th at ‘[w] he re

a pa rty as su m es a cert ai n po si ti on in a le ga l pr oc eed in g, an d su ccee ds in m ai nt ai ni ng

th at po si ti on , he m ay no t th erea fte r, si m pl y b e cau se hi s in te res ts ha ve ch an ge d,

as su m e a co nt rary po si ti on , es pe ci al ly if it be to th e pr ej u d i c e of th e pa rty who ha s

acq ui es ced in th e po si ti on fo rm erl y ta ke n by hi m .’ ” Ta yl or v. St at e , 25 4 S.W .3d 85 6,

85 8 (Mo

. 20 08 ) (s eco nd al te rat io n in or ig in al ) (q uo ti ng Zed ne r v. Uni te d St at es , 54 7

U.S. 48 9, 50 4 (2 00 6) ). Acco rd in g to th is ru le

, by de feat in g rem ov al th ro ug h as se rti ng

th e po si ti on th at he wil l no t acce pt m or e th an $4 ,99 9,9 99 in da m ag es on be ha lf of th e
cl as s he is se ek in g to rep res en t, Ro l w i n g i s e s to pp ed fro m la te r acce pt in g da m ag es

-5-th at ex ceed th at am ou nt

. Si m il arl y , by ta ki ng th e po si ti on th at he wou ld on ly acce pt

fees on a co nt in ge nc y ba si s ou t of da m ag es no t ex ceed in g $4 ,99 9,9 99

, Ro lwi ng ’s

co un se l is es to pp ed fro m a ccep ti ng an y ot he r fee award

. “ St ip ul at io ns are

‘con tro ll in g an d co nc lu si ve , an d co ur ts are bo un d to en fo rce th em .’ ” Zi pp er v. Hea lt h

Mid wes t , 97 8 S .W .2d 39 8, 4 10 (Mo . C t. App . 1 99 8) (q uo ti ng Pier so n v. All en , 40 9

S.W .2d 12 7, 13 0 (Mo

. 19 66 )). The refo re, we are co nf id en t th at Mi ss ou ri co ur ts wil l

ap pl y jud ic ia l es to pp el to en fo rce t he ter m s o f th e st ip ul at io ns

.

Nes tl e’s se co nd arg um en t is th at th e st ip ul at io ns are no t en fo rcea bl e be cau se , in di sc la im in g a si gn ifi can t po rtion of the pu ta ti ve cl as s’s po te nt ia l reco ve ry , Ro lwi ng

ha s vi ol at ed hi s fid uc ia ry d u t y to th e pu ta ti ve cl as s. Nes tl e po in ts

, in pa rti cu la r, to

Bac k Doc to rs Lt d. v. Met ro po li ta n Pro

pe rt y & Ca su al ty In su ra nc e Co

. , 63 7 F.3 d 82 7
(7 th Ci r. 20 11 ), in whi ch th e Sev en th Ci rcu it st at ed th at

, in a pu ta ti ve cl as s act io n, a pl ai n t i f f “h a s a fid uc ia ry du ty to it s fel lo w cl as s m em be rs

. A rep res en ta ti ve can ’t

th ro w away wha t co ul d be a m ajor co m po ne nt of th e cl as s’s reco ve ry

. Eit he r a st at e

or a fed eral jud ge m ig ht in si st th at so m e ot he r pe rs on , m or e wil li ng to se ek [d am ag es

in ex ces s of th e juri sd ic ti on al m in im um ], ta ke ov er as rep res en ta ti ve .” Id

. at 83 0- 31

. Nes tl e co nt en ds th at

, be cau se th e da m ag e di sc la im er was a ba d- fai th ren un ci at io n of

“ a m ajor co m

po n e n t of th e cl as s’s reco ve ry ,” a co ur t m ig ht no t cert ify Ro lwi ng as
cl as s re pr es en ta ti ve , m ig ht no t ce rti fy Ro lwi ng ’s co un se l as cla ss co un se l, o r m ig ht

refu se to en fo rce Ro lwi ng ’s da m ag e di sc la im er ag ai ns t th e cl as s. Nes tl e arg ue s th at

, be cau se of t he se po ss ib il it ie s, Ro lwi ng ha s n ot m et hi s l eg al cert ai nt y bu rd en

.

As an in it ia l m at te r, we are bo un d to co ns id er on ly juri sd ic ti on al fact s pr es en t

at th e ti m e of rem ov al an d no t th os e oc cu rri ng su bs eq ue nt ly, se e St

. Pa u l Mer cu ry

In de m. Co

. v. Red Ca b Co.

, 30 3 U.S. 28 3, 29 3 (19 38 ), su ch as a hypo th et ic al fu tu re

su bs ti tu ti on of c l a s s r ep res en ta ti ve , su bs ti tu ti on of cl as s co un se l, or ot he r no n-

-6-e n f

o rcem en t of th e da m ag e di sc la im er be cau se of ba d fai th

. At an y r a t e , 2

no twi th st an di ng th e la ng ua ge ci te d by Nes tl e, Bac k Doc to rs act ua ll y suppor ts rem an d

in th is cas e. In Bac k Doc to rs , th e act ua l d am ag es at i ss ue were ap pr ox im at el y $2 .9

m il li on

. The in it ia l com

pl ai nt fil ed in Ill in oi s s ta te co ur t n ei th er requ es te d pu ni ti ve
da m ag es no r di sc la im ed th em

. The de fen da nt rem ov ed un de r CAFA, arg ui ng th at th e

am ou nt in co nt ro ve rs y was in ex ces s of $5 m il li on be cau se o f th e po te nt ia l fo r an
award of pu ni ti ve da m ag es

. The pl ai nt iff th e n a r g u e d th at rem an d was warra nt ed

be cau se it ha d no t req ue st ed pu ni ti ve da m ag es

. App lying th e sa m e le ga l cert a i n t y

st an da rd we ap pl ie d ab ov e, Bac k Doc to r s , 6 3 7 F.3 d at 82 9- 30

, th e Sev en th Ci rcu it

fo un d th at th e pl ai nt iff ha d fai le d to es ta bl is h to a le ga l cert a i nt y th at he co ul d no t

reco ve r in ex ces s o f th e juri sd ic ti on al m in im um un de r CAFA becau se hi s fa il ur e to

req ue st pu ni ti ve da m ag es di d no t co nc lu si ve ly es ta bl is h th at th ey co ul d n ot be

award ed

, id

. at 83 1.

Howev er, th e co ur t wen t on to ex pl ai n th at “ [i]f th e Su pr em e Co ur t of Ill in oi s

ha d es ta bl is he d

. . . th at om is si on of a req ue st [fo r pu ni ti ve da m ag es ] fro m th e in it ia l
pl ead in g fo rb id s a p u ni ti ve award

, th en rem an d wou ld be ap pr op ria te ” an d th at a

“ pl ai nt iff in Ill in oi s can li m it th e rel ie f to an amo u n t l e ss th an th e juri sd ic ti on al

m in im um , an d th us pr ev en t rem ov al

, by fil in g a bi nd in g st ip ul at io n or affi da vi t wit h

th e co m pl ai nt .” Id

. In ot he r wor ds

, co nt rary to Nes tl e’s vi ew of th e cas e, th e Sev en th

Ci rcu it

, in sp it e of it s co nc ern ab ou t th e po te nt ia l co n f l i c t o f i nt eres t in he ren t in

da m ag e di sc la im ers in pr e-ce rti fic at io n cl as s act io ns , ex pl ic it ly en do rs ed th e m et ho d

us ed by Rol win g i n t hi s ca se to de feat CAFA juri sd ic ti on

.

W e no te th at

, sh ou ld ci rcu m st an ces ch an ge in th e m an ne r su gg es te d by Nes tl e, 2

rem ov al s un de r CAFA are no t su bjec t to th e on e-year li m it at io n pe rio d in 28 U.S.C. § 14 46 (c)( 1)

. Und er CAFA, a pa rty can rem ov e th e cas e an y ti m e “ wit hi n 30 da y s aft er [it s rece ip t], th ro u g h se rv ic e or ot he rwis e, of a co py of an am en de d pl ead in g,

m ot io n, or de r or ot he r pa pe r fro m whi ch it m ay fir st be as cert ai ne d th at th e ca se is

on e whi ch is or h as be co m e rem ov ab le .” 28 U.S.C. § 1 44 6( b) (3 ).

-7-Bec au se we co nc lu de th at Mi ss ou ri’s well -es ta bl is h e d jud ic ia l es to pp el

do ct rin e m ak es th es e st ip ul at io ns bi nd in g, Ro lwi ng ha s sh ow n th at it is le ga ll y

im po ss ib le fo r th e am ou nt in co nt ro ve rs y in th is cas e to m eet CAFA’s th res ho ld

, an d

rem an d b as ed on CAFA’s am ou nt -in -co nt ro ve rs y req ui rem en t was ap pr op ria te

. 3

II I. CONCLUSI ON

Fo r th e fo reg oi ng reas on s, we af fir m th e jud gm en t o f th e d is tri ct co ur t.

__ __ __ __ __ __ __ __ __ __ __ __ __ __ __

Bec au se we de ci de th e cas e on th is ba si s, we ne ed no t ad dr es s Ro lwi ng ’s 3

arg um en ts fo r rem an d on th e ba si s of cl as s nu m ero si ty ( f i r s t r ai se d on ap pe al ) or CAFA’s se cu rit ie s ex cep ti on

.

-8-