IN THE UNITED STATES COURT OF APPEALS

FOR THE FIFTH CIRCUIT

No. 14-30071,

consolidated with No. 14-30072

STATE OF LOUISIANA, on behalf of insured(s)/assignor(s)/subrogor(s),

Plaintiff – Appellee

v.

AMERICAN NATIONAL PROPERTY & CASUALTY COMPANY; 

AMERICAN NATIONAL GENERAL INSURANCE COMPANY; ANPAC 

LOUISIANA INSURANCE COMPANY,

Defendants – Appellants

Appeals from the United States District Court 

for the Eastern District of Louisiana

Before JOLLY, SMITH, and CLEMENT, Circuit Judges.

E. GRADY JOLLY, Circuit Judge:

In this Class Action Fairness Act (“CAFA”) case, having roots in

Hurricane Katrina and arising from a state program to assist homeowner 

victims, the defendant, American National Property & Casualty Company 

(“ANPAC”), appeals the judgment of the district court holding that it lacked 

subject matter jurisdiction over the case. This case was initiated as a class 

action, in state court under state law, by the State of Louisiana (the “State”). 

The State brought the suit against several insurers, including ANPAC, to 

recover on the homeowner insurance policies purchased by individual

Louisiana citizens but assigned by the respective policy holders to the State in 

United States Court of Appeals

Fifth Circuit

FILED

March 26, 2014

Lyle W. Cayce

Clerk

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return for State financial assistance in repairing and rebuilding their homes 

in the wake of the hurricanes. The defendant insurance companies removed 

the case to federal court, asserting jurisdiction under CAFA. The federal court 

certified a question relating to the legality of the assignment of the policies to 

the Supreme Court of Louisiana. After the Louisiana Supreme Court held 

that, under Louisiana law, the insurance policies at issue must be considered 

individually, the State dropped its class allegations and severed this individual 

action from the original class action case. Thus arose the question of federal 

jurisdiction over these individual cases, once part of the CAFA class action. 

Although an earlier opinion from this court had held that CAFA provided 

federal jurisdiction over the class, the district courts held that these severed 

individual actions must have their own independent federal jurisdictional 

basis and found none. Because they lacked an independent basis for federal 

jurisdiction, the district courts remanded the cases to state court.

We hold that the general rule regarding federal jurisdiction over a 

removed case controls here: Jurisdictional facts are determined at the time of 

removal, not by subsequent events. Because at the time of removal CAFA 

supplied federal subject matter jurisdiction over these cases – as a prior panel 

of this court explicitly had held – we hold that CAFA continues to provide 

jurisdiction over these individual cases notwithstanding their severance from 

the class. Accordingly, we REVERSE the judgments of the district courts and 

REMAND for further proceedings not inconsistent with this opinion. 

I.

As a result of the damage inflicted on Louisiana by Hurricanes Katrina

and Rita, the State of Louisiana – with funding from the Department of 

Housing and Urban Development – initiated the Louisiana Road Home 

program. Through this program, the State distributed funds to residents to 

assist efforts to rebuild homes damaged by the hurricanes. In return for these 

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funds, and to avoid the homeowners recovering duplicate payments from 

multiple sources, citizens participating in the Road Home program were 

required to assign to the State the homeowner’s rights against his insurer up 

to the amount received from the program.

In August 2007, the State initiated a class action lawsuit in Louisiana 

state court to recover on the insurance policies of its citizens. The suit was 

brought under Louisiana Code of Civil Procedure Article 591(A) – a state class 

action statute – and named several insurance companies as defendants. This 

“Road Home Litigation” has been ongoing ever since. We will only recount the 

relevant procedural steps that have brought the case before this panel.

After the Road Home Litigation was filed, the insurance company 

defendants removed the case to federal court. The State moved to remand 

arguing that the court lacked subject matter jurisdiction. The defendants 

argued, and the district court agreed, that because the case was brought under 

a state class action statute, more than $5,000,000 was in controversy, and 

minimal diversity existed, CAFA supplied federal subject matter jurisdiction. 

The State requested permission to appeal the district court’s denial of its 

motion to remand. This court granted permission to appeal, and subsequently 

affirmed the judgment of the district court holding that CAFA supplied federal

jurisdiction. In re Katrina Canal Litig. Breaches, 524 F.3d 700, 705–12 (5th 

Cir. 2008).

Federal jurisdiction having been established, the case continued in the 

district court. The defendants next filed a motion to dismiss the State’s claims 

arguing that, under Louisiana law, homeowners were forbidden to assign their 

recovery to the State under the anti-assignment clauses in the respective

insurance policies. The State countered that these anti-assignment provisions 

did not apply to post-loss assignments. Again, this issue was litigated and 

appealed to this court. Recognizing that the issue was novel and dispositive, 

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this court certified the question to the Louisiana Supreme Court. The 

Louisiana Supreme Court accepted the certified question and responded that 

applying anti-assignment clauses to post-loss assignments did not violate 

Louisiana public policy, but that “it must be evaluated on a policy by policy 

basis.” In re Katrina Canal Breaches Litig., 63 So. 3d 955, 957 (La. 2011).1

In reaction to this ruling, the district court handling the litigation 

ordered the claims on behalf of each individual severed from the collective

action and directed the State to file a new amended complaint for each 

individual claim. Accordingly, the State filed 1,504 amended complaints, each 

encompassing its claim on behalf of each respective policy holder; each was

given a new case number and randomly assigned to a district judge.

Following the severance, the district judges ordered ANPAC to show 

cause why, now severed from the alleged CAFA class action, these cases should 

not be remanded to state court. ANPAC responded that jurisdictional facts of 

a case removed from state court are assessed at the time of removal and are

not affected by later events, and further, because this court unambiguously 

held that CAFA supplied jurisdiction at the time of removal, it was clear that 

post-removal events could not divest the court of jurisdiction. The district 

courts disagreed and held that they lacked jurisdiction. The district courts

relied on Honeywell Int’l, Inc. v. Phillips Petroleum Co., in which this court 

stated that “a severed action must have an independent jurisdictional basis.” 

415 F.3d 429, 431 (5th Cir. 2005). The district courts held that once these cases

were individually severed from their former home in the class action, CAFA 

did not supply jurisdiction; furthermore, the courts lacked diversity 

1 Subsequent to this decision, the State settled with all of the defendants save ANPAC. 

These settlements reduced the number of claims (i.e. individuals on whose behalf the State 

was attempting to collect) from about 160,000 to 1,504. 

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jurisdiction because the amount in controversy was less than $75,000. The 

district courts thus entered orders remanding the cases to state court. 

Pursuant to 28 U.S.C. § 1453(c), ANPAC petitioned this court for 

permission to appeal the remand order. Because we recognized that this case 

presents an important CAFA-related question both for this case and for the 

other individual actions currently pending, and because the record before us 

was sufficiently developed, we granted permission to appeal. See, e.g., Coll. of 

Dental Surgeons of P.R. v. Conn. Gen. Life Ins. Co., 585 F.3d 33, 38–39 (1st Cir. 

2009) (discussing factors to consider in granting permission to appeal a district 

court’s remand order in a CAFA case).

II.

A.

As presented to us, we have two competing principles that address

federal jurisdiction in these removed cases. The first is a long-established 

general rule, holding that jurisdictional facts are determined at the time of 

removal, and consequently post-removal events do not affect that properly 

established jurisdiction. See Grupo Dataflux v. Atlas Global Grp., L.P., 541 

U.S. 567, 569–70 (2004) (recognizing “the general rule that, for purposes of 

determining the existence of diversity jurisdiction, the citizenship of the 

parties is to be determined with reference to the facts as they existed at the 

time of filing”); Freeport-McMoRan, Inc. v. KN Energy, Inc., 498 U.S. 426, 428 

(1991) (per curiam) (“We have consistently held that if jurisdiction exists at the 

time an action is commenced, such jurisdiction may not be divested by 

subsequent events.”); Cavallini v. State Farm Mut. Auto Ins. Co., 44 F.3d 256, 

264–65 (5th Cir. 1995) (recognizing that removal jurisdiction is determined on 

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the basis of the complaint at the time of removal).2 The other rule at issue in 

this appeal constitutes an exception to the general rule and requires that an 

action severed from the original case must have an independent jurisdictional 

basis, which in turn calls for jurisdictional facts to be determined post-removal,

at the time of severance. Honeywell, 415 F.3d at 431 (“[A] severed action must 

have an independent jurisdictional basis.”). We start from the proposition that 

the general time-of-removal rule applies unless the Honeywell exception is 

applicable to these facts.

Reviewing the district court’s remand order de novo, Admiral Ins. Co. v. 

Abshire, 574 F.3d 267, 272 (5th Cir. 2009), we find that this exception relating 

to severed cases, announced in Honeywell, does not apply as broadly as the 

State suggests. We reach this conclusion based on several considerations that 

we now discuss.

B.

1.

We begin by considering the factual and legal context underlying

Honeywell’s statement that “a severed action must have an independent 

jurisdictional basis.” Honeywell, 415 F.3d at 431. In Honeywell, the claim at 

issue had never been invested with original federal jurisdiction. That is, at the 

time the third-party claim (the severed claim) in Honeywell was filed, the 

district court exercised only its supplemental jurisdiction over the claim –

recognizing it as related to the underlying federally-based case. Id. 

2 The State argues that subsequent developments in these cases have demonstrated 

that jurisdiction did not exist even at the time of removal. This argument is unavailing

especially in the light of the prior panel opinion squarely holding that CAFA provides federal 

jurisdiction. In re Katrina Canal Litig. Breaches, 524 F.3d at 705–12. Although when

subsequent discovery reveals that alleged jurisdictional facts were untrue at the time of 

removal a court may hold that jurisdiction was lacking at the time of removal, the State has 

made no meritorious argument that any alleged facts have been discovered to be untrue.

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The legal authority Honeywell cited to support its proposition that 

federal jurisdiction must be established anew for severed claims related only 

to a particular species of severed claims – claims that were never infused with 

original jurisdiction, but state claims that were tagging along in the tail wind 

of the original federal claims. Specifically, the panel relied on United States v. 

O’Neil, 709 F.2d 361 (5th Cir. 1983) and 28 U.S.C. § 1367. O’Neil, like 

Honeywell, dealt with the severance of counterclaims over which the district 

court had apparently exercised only supplemental jurisdiction. O’Neil, 709 

F.2d at 365. O’Neil held that these severed counterclaims required an 

independent jurisdictional basis if they were going to stay in federal court; they 

simply had never, at any point, established a federal jurisdictional basis 

independent of the underlying federal claim. Id. at 375. Thus, O’Neil does not

support the broad application the State urges – overruling the customary timeof-removal rule with respect to claims that are original federal claims at the 

time they were removed to federal court.

Similarly, Honeywell’s citation of and reliance on § 1367 further, and 

strongly, supports the conclusion that its statement, although cast in broad 

language, only applies to claims based on supplemental jurisdiction. Section 

1367 grants the district court the discretion to exercise supplemental 

jurisdiction over related state claims that have been joined “in the action 

within such original jurisdiction.” Thus, when the related state claim is 

severed from the federal claim, the once-upon-a-time related claim is no longer 

a related claim because there is no federal claim to which it can relate; nor does 

the claim any longer supplement the federal claim, and supplemental 

jurisdiction was the only support for its brief federal life.

Neither is § 1367 authority for the broader rule that the State urges. The 

section contains nothing to suggest that a court which has original federal 

jurisdiction over a claim is stripped of that jurisdiction when the claim is

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severed from a claim that itself embodies original jurisdiction. Here, these

individual claims are not related claims subject to § 1367; they are the specific

claims over which the district courts had possessed original jurisdiction at the 

time of removal and later were adjudicated to be federal claims.

To sum up: Honeywell examined a severed third-party claim that the 

district court had only exercised supplemental jurisdiction over. In support of 

its ruling that severed claims require an independent jurisdictional basis, 

Honeywell cited O’Neil, a case dealing with the severance of claims that 

enjoyed only supplemental jurisdiction, and the code section granting 

supplemental jurisdiction, which constrains the exercise of supplemental 

jurisdiction to claims within the same action. These contextual markers

strongly suggest that Honeywell’s statement was not intended to apply to 

severed claims that enjoyed original federal jurisdiction, but instead was only 

applicable to situations like that before the Honeywell court involving the 

severance of “related” claims.

2.

Furthermore, the subsequent history of Honeywell also suggests that a

broad reading of the case should be avoided. No court of appeals has ever cited

Honeywell for the proposition that severed actions require an independent 

jurisdictional basis. Nor have we found another case in our circuit or in any 

other circuit that states, so sweepingly, this exception to the time-of-filing rule; 

nor have we seen analysis that gainsays a limited application of Honeywell to 

claims based on supplemental jurisdiction. And we certainly have found no 

circuit court cases that apply the rule in Honeywell to severed claims over 

which the district court had original jurisdiction at the time of removal. 

The State’s reading of Honeywell finds some limited support in the 

opinions of some federal district courts. With the exception of several district 

court decisions within this Road Home Litigation, we have, however, found no 

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district court case that applies Honeywell to a claim that enjoyed original 

jurisdiction prior to severance. See, e.g., Admiral Ins. Co. v. Health Holdings 

USA, Inc., No. Civ. A. 3:03CV1634-G, 2005 WL 3500286, *1–3 (N.D. Tex. Dec. 

21, 2005) (applying Honeywell to severed counterclaims). And the only district 

court that has faced the precise issue we face – the intersection of Honeywell

and the time-of-removal rule in CAFA cases – held that Honeywell was not 

applicable because it does not apply to severed claims that enjoyed original 

jurisdiction prior to severance. Helm v. Alderwoods Group, Inc., No. C 08–

01184 SI, 2011 WL 2837411, *1–3 (N.D. Cal. July 18, 2011) (holding that 

individual actions severed from CAFA class action do not require an 

independent jurisdictional basis because Honeywell applies only to severed 

claims that were dependent on the presence of other parties or claims in the 

suit).

This subsequent history further suggests that Honeywell’s statement, 

though phrased broadly and without exception, should be applied only to 

severed claims that find themselves in federal court on the basis of 

supplemental jurisdiction.

3.

Next, applying Honeywell’s statement to this case would likely run afoul 

of the statutory language of CAFA. The text of CAFA states that federal 

jurisdiction will extend to “class actions” with minimal diversity and at least 

$5,000,000 in controversy. 28 U.S.C. § 1332(d)(2). The statute defines “class 

action” as “any civil action filed” under Rule 23 or a state class action statute. 

Id. at § 1332(d)(1)(B) (emphasis added). Thus, federal jurisdiction under the 

statutory provision of CAFA is explicitly concerned with the status of an action

when filed – not how it subsequently evolves. And, it is undisputed that this 

action was filed as a class action, consistent with the standards of the statute. 

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Similarly, the legislative history of CAFA indicates that the time-ofremoval rule was to be applied in these cases. The Senate Report on the bill 

reflects concerns about post-filing events either creating or destroying federal 

jurisdiction. See S. Rep. 109-14, at 70 (2005), reprinted in 2005 U.S.C.C.A.N. 

3, 65. The Senate Report dismisses these concerns as “unfounded” recognizing 

that “[w]ell-established law exists to resolve these questions, and [CAFA] does 

not change–or even complicate–the answers to these questions.” Id. The 

Senate Report goes on to state that “[c]urrent law (that [CAFA] does not alter) 

is also clear that, once a complaint is properly removed to federal court, the 

federal court’s jurisdiction cannot be ‘ousted’ by later events.” Id. Thus, the 

Senate Report is a further indication that Honeywell should not be applied to

this case; instead, CAFA provides original jurisdiction, determined at the time 

of removal.

4.

Finally, we doubt that the statement in Honeywell could apply as broadly 

as the State suggests in the light of the overwhelming authority with which it 

would pose conflicts if given this broad reading. 

The State’s reading of Honeywell would obviously constitute a significant

exception to the time-of-removal rule for assessing jurisdiction, a rule well

entrenched in federal jurisprudence. See Grupo Dataflux, 541 U.S. at 569–70. 

The State’s reading of Honeywell would also certainly seem to separate us from 

other circuits. Every circuit that has addressed the question has held that 

post-removal events do not “oust” CAFA jurisdiction. See Vega v. T-Mobile 

USA, Inc., 564 F.3d 1256, 1268 n.12 (11th Cir. 2009) (“[J]urisdictional facts are 

assessed at the time of removal; and post-removal events (including noncertification, de-certification, or severance) do not deprive federal courts of 

subject matter jurisdiction.”); United Steel Workers Int’l Union v. Shell Oil Co., 

602 F.3d 1087, 1091–92 (9th Cir. 2010) (agreeing with Vega that “post-filing 

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developments do not defeat jurisdiction if jurisdiction was properly invoked as 

of time of filing”); In re Burlington N. Santa Fe Ry. Co., 606 F.3d 379, 381 (7th 

Cir. 2010) (“CAFA is, at base, an extension of diversity jurisdiction. Even in 

cases filed originally in federal court, later changes that compromise diversity 

do not destroy jurisdiction.”); Buetow v. A.L.S. Enters., Inc., 650 F.3d 1178, 

1182 n.2 (8th Cir. 2011) (“[CAFA jurisdiction] continued despite the district 

court’s denial of Plaintiffs’ motion for class certification.”); Metz v. Unizan 

Bank, 649 F.3d 492, 500 (6th Cir. 2011) (“We agree with the other circuits that 

have addressed this issue and hold that denial of class certification does not 

divest federal courts of jurisdiction.” (internal quotation marks omitted)).

It is true, as the State points out, that none of the subsequent events in 

these cases involved a claim actually severed from the original case. But on 

the other hand, the severed claim in Honeywell was not a claim suffused with 

original federal jurisdiction at the time of removal, as indeed the instant 

severed claims were. In the face of this overwhelming and unanimous 

authority, we are unwilling to isolate our circuit on so thin a distinction as a 

single broad, unexplicated statement taken out of context. 

III.

In sum, we hold that at the time of removal, these claims clearly 

possessed original federal jurisdiction as an integrated part of the CAFA class 

action. Honeywell’s statement – that severed actions require an independent 

jurisdictional basis – applies only to severed claims that are based on 

supplemental jurisdiction. Consequently, we find the Honeywell exception is

inapplicable here and hold that the usual time-of-removal rule controls this 

appeal, and federal jurisdiction is properly exercised over these severed cases.

For the reasons stated herein, the judgments remanding to state court 

are REVERSED, and the cases are hereby REMANDED to the federal district 

courts a quo for further proceedings not inconsistent with this opinion.

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