In the

United States Court of Appeals

For the Seventh Circuit ____________________

No. 16-3938

TRI-STATE WATER TREATMENT, INC.,

Plaintiff/Counterclaim-Defendant,

v.

MICHAEL BAUER and STACEY BAUER,

Defendants/Counterclaim-Plaintiffs/Appellees,

v.

HOME DEPOT U.S.A., INC.,

Counterclaim-Defendant, Appellant.

____________________

Appeal from the United States District Court for the

Southern District of Illinois.

No. 16-cv-0419-MJR-RJD — Michael J. Reagan, Chief Judge.

____________________

ARGUED DECEMBER 1, 2016 — DECIDED JANUARY 5, 2017

____________________

Before WOOD, Chief Judge, and FLAUM and ROVNER, Circuit 

Judges.
2 No. 16-3938

WOOD, Chief Judge. In First Bank v. DJL Properties, LLC, 598 

F.3d 915 (7th Cir. 2010), we held that a counterclaim-defendant is not entitled to remove a case from state court to federal 

court under the provisions of the Class Action Fairness Act

(CAFA), 28 U.S.C. § 1453(b). Today’s case presents a related 

question: whether, even though the original counterclaim-defendant is barred from removing, an additional counterclaimdefendant may nevertheless do so. We conclude that the statute does not support treating an original counterclaim-defendant differently from a new one, and so we affirm the district court’s order remanding this case to state court. 

I

This case began as a simple collection action brought in the 

Small Claims Court of Madison County, Illinois, by Tri-State 

Water Treatment, Inc., against Stacey and Michael Bauer. TriState alleged that the Bauers failed to pay for a water treatment system it had installed at their house following a free, 

in-home assessment of their water. The Bauers responded on 

June 5, 2015, by answering the complaint and filing a counterclaim against Tri-State. See 735 ILCS 5/2-608. But it was not 

just any counterclaim: it asserted a multi-state class action 

against Tri-State for fraud in connection with the sale of its 

water-treatment system. See 735 ILCS 5/2-801. For purposes 

of the counterclaim, the Bauers were counterclaim-plaintiffs 

and Tri-State was the sole counterclaim-defendant.

Matters became more complicated when, on February 26, 

2016, the Bauers filed an amended class-action counterclaim

in which they added Home Depot U.S.A., Inc., and Aquion, 

Inc., as counterclaim-defendants. See 735 ILCS 5/2-616(a) 

(permitting amendments that “introduc[e] any party who 

ought to have been joined as plaintiff or defendant”). The 
No. 16-3938 3

Bauers served the amended counterclaim on Home Depot on 

March 15, 2016.

The amended counterclaim defines the class as consumers 

who purchased a water treatment system from Tri-State, 

Rainsoft, and Home Depot, following an in-home water test. 

It asserts that the counterclaim-defendants conducted inhome water tests that did nothing but identify mineral content, rather than contaminants, and thereby misled consumers into buying their water treatment systems.

Home Depot filed a timely notice of removal on April 14, 

2016. See 28 U.S.C. §§ 1446(b)(1), 1453(b). It argued that even 

though it was not an original “defendant” in the underlying 

case, its status as an additional counterclaim-defendant in an 

action meeting CAFA’s criteria entitled it to take this step. The 

Bauers filed a motion to remand pursuant to 28 U.S.C. 

§ 1447(c). They argued that the general removal statute 

(§ 1446), as modified by CAFA, does not permit any kind of 

counterclaim-defendant (original or additional) to remove, 

and thus that the case had to be returned to the state court.

In an order issued on September 29, 2016, the district court 

agreed with the Bauers’ position. It concluded that CAFA did 

not disturb the longstanding rule that only original defendants can remove cases to federal court. The court relied in particular on First Bank v. DJL Properties, LLC, supra, which it read 

as a broad statement that only the original defendants are entitled to remove, not any of the hyphenated defendants, 

whether initial counterclaim-defendants, new counterclaimdefendants, third-party defendants, or anything else in that 

general family. 
4 No. 16-3938

On October 11, 2016, Home Depot petitioned this court for 

permission to appeal the remand order pursuant to 28 U.S.C. 

§ 1453(c). We granted that request on November 16, 2016, in 

order to resolve the unsettled question whether CAFA permits an additional counterclaim-defendant to remove an action. See 28 U.S.C. § 1453(c)(2); Hart v. FedEx Ground Package 

Sys., Inc., 457 F.3d 675, 679 (7th Cir. 2006).

II

As the party seeking removal, Home Depot bears the burden of establishing federal jurisdiction. In re Safeco Ins. Co. of 

Am., 585 F.3d 326, 329–30 (7th Cir. 2009); Brill v. Countrywide 

Home Loans, Inc., 427 F.3d 446, 447–48 (7th Cir. 2005). It argues 

that Congress granted parties in its position the power to remove actions from state court in § 1453(b), which provides:

A class action may be removed to a district court 

of the United States in accordance with section 

1446 (except that the 1-year limitation under 

section 1446(c)(1) shall not apply), without regard to whether any defendant is a citizen of the 

State in which the action is brought, except that 

such action may be removed by any defendant

without the consent of all defendants.

28 U.S.C. § 1453(b) (emphasis added).

Home Depot argues that the second time the term “any 

defendant” appears in this section, it has two distinct functions: first, it eliminates the requirement that the defendants 

act unanimously when they remove, and second, it broadens 

the type of defendants who can remove to include any party 

that is brought into the case through service of process. Noting that nothing in the language of CAFA spells out anything 
No. 16-3938 5

like the latter purpose, the Bauers take issue with Home Depot’s second point. Instead, they argue, CAFA simply eliminates two ordinary restrictions on removal: it erases the normal ban on removal by an in-state defendant in a diversity 

case, 28 U.S.C. § 1441(b)(2); and it abolishes the normal requirement that all defendants must join in a removal notice, 

28 U.S.C. § 1446(b)(2)(A).

No one disputes the fact that suits qualifying under CAFA, 

28 U.S.C. § 1332(d)(2), are subject to at least the two changes 

that the Bauers identify: they are exempt from the normal rule 

barring removal by in-state defendants, and even a single defendant is entitled to remove “the action.” 28 U.S.C. § 1453(b). 

We addressed the latter point in First Bank, 598 F.3d at 917, 

where we observed that “[t]he function of the second ‘any’ [in 

§ 1453(b)] is to establish that a single defendant’s preference 

for a federal forum prevails, notwithstanding [Chi., Rock Island 

& Pac. Ry. Co. v. Martin, 178 U.S. 245 (1900)].”

This leaves as the only point in contention Home Depot’s 

argument that the second time the term “any defendant” is 

used in § 1453(b) it means not just any one “defendant,” but 

also any type of defendant. Home Depot proposes a rule under which anyone who joins the case through service of process should be regarded as a defendant for purposes of removal under CAFA. Such a rule, we note, would even exclude 

original defendants, if they appeared by consent rather than 

through service. As we now explain, that is just one among 

several problems with its position.
6 No. 16-3938

A

Long before 2005, when CAFA was enacted, the Supreme 

Court held that a plaintiff who files suit in state court is precluded from removing a case to federal court, even if that person is later named as a counterclaim-defendant. Shamrock Oil 

& Gas Corp. v. Sheets, 313 U.S. 100 (1941). Shamrock Oil interpreted the general federal removal statute in place at the time

against the backdrop of prior versions of the legislation. (In 

one form or another, removal is a device that has existed since 

the creation of the federal judiciary; it appeared in the First 

Judiciary Act of 1789, 1 Stat. 73, c. 20, § 12.) The Court in Shamrock Oil noted that from 1875 to 1887, the general removal statute conferred the privilege of removal on “either party.” 313 

U.S. at 105. At all other times, the Court stressed, “the statutes 

governing removals have in terms given the privilege of removal to ‘defendants’ alone ... .” Id. In the earlier case of West 

v. Aurora City, 73 U.S. (6 Wall.) 139 (1867), the Court had held 

that “[t]he right of removal is given only to a defendant who 

has not submitted himself to that jurisdiction; not to an original plaintiff in a State court who, by resorting to that jurisdiction, has become liable under the State laws to a cross-action.” 

Id. at 141. At that time, however, the rules governing counterclaims, cross-claims, and third-party claims were significantly 

different from those that now appear in the Federal Rules of 

Civil Procedure, and so there is no reason to believe that the 

Court was speaking one way or the other to the situation that 

confronts us here. All we know from Shamrock Oil is that removal is not available for a plaintiff who is a counterclaimdefendant. 313 U.S. at 108–09. Both the Supreme Court and 

Congress have left Shamrock Oil undisturbed during the ensuing 75 years.
No. 16-3938 7

As we noted earlier, CAFA made some changes to the removal rules for large, state-law based class actions. In First 

Bank, we considered one aspect of those changes: whether an 

original plaintiff who also is a class-action counterclaim-defendant has the right to remove a case to federal court under 

28 U.S.C. § 1453(b). First Bank, the original plaintiff and counterclaim-defendant, was fighting remand to the state court. It 

argued (just as Home Depot does here) that the word “defendant” as used in § 1453(b) includes original plaintiffs because “defendant” is modified by the term “any.” First Bank, 

598 F.3d at 917.

We rejected First Bank’s interpretation of the statute, concluding that CAFA’s use of “time-tested legal language” required us to adhere to the Shamrock Oil rule prohibiting removal by an original plaintiff. Id. We commented that “the 

word ‘defendant’ has an established meaning in legal practice, 

and it is vital to maintain consistent usage in order to ensure 

that Members of Congress (and those who advise them) know 

what proposed language will do, and people can understand 

the meaning of statutes.” Id. The purpose of the modifier 

“any,” we concluded, was limited to the elimination of the 

unanimity requirement. Id. 

We also were influenced by the instruction in § 1453(b) to 

conduct a CAFA removal “in accordance with section 1446.” 

Sections 1441 and 1446 use the Shamrock Oil definition of the 

word “defendant.” Adopting First Bank’s view, we said,

“would make hash of Chapter 89, because § 1453(b) refers to 

§ 1446; unless the word ‘defendant’ means the same thing in 

both sections, the removal provisions are incoherent.” Id. at 

917. Interpreting § 1453(b) in this way kept consistent the 
8 No. 16-3938

meaning of the term “defendant” as used in Chapter 89. Id. at 

917–18.

As this discussion shows, First Bank does much of the 

work that is necessary to resolve the present appeal. But it 

does not do everything, because it dealt only with the situation of an original plaintiff who becomes a counterclaim-defendant, and our case involves a new party. We thus are faced 

with the distinct issue of a party that is not an original defendant, but also not one who voluntarily chose the state court.

Different concerns, however, persuade us that CAFA does not 

extend the right of removal to such a party. 

B

Just as the counterclaim-defendant in First Bank did, Home 

Depot argues that the term “any defendant” in § 1453(b) 

grants the right to remove to defendants of any stripe, regardless of how they came into the case. It insists that the word 

“defendant” means something different, and more expansive, 

when it appears in § 1453(b) than it does when it is used in 

§§ 1441 and 1446. As we have suggested, this position is in 

some tension with First Bank, in which we rejected a comparable argument. We noted that Congress drafted § 1453(b) in 

the context of established precedent interpreting the term 

“defendant” as the original defendant in the case, not a party 

in the position of a defendant because of additional counter-, 

cross-, or third-party claims. Congress is presumed to be 

aware of judicial interpretations of its acts. See Mississippi ex 

rel. Hood v. AU Optronics Corp., 134 S.Ct. 736, 742 (2014); Lorillard v. Pons, 434 U.S. 575, 580 (1978). Courts also presume

that the same meaning attaches to a term used multiple times 

in the same statute, unless there is powerful evidence to the 

contrary. AU Optronics, 134 S.Ct. at 742.
No. 16-3938 9

Logically, there are only a limited number of possibilities 

for removal in CAFA cases, as the following simplified scenario illustrates. Suppose that A sues B in state court, and B 

makes no effort to remove the case for more than a year. With 

the state court’s permission, B amends its answer to raise a 

CAFA-qualified counterclaim against A and adds C as an additional defendant to the counterclaim under a state rule analogous to FED. R. CIV. P. 13(h). We know from Shamrock Oil and 

First Bank that A is not entitled to remove the case to federal 

court, even though the counterclaim meets CAFA’s standards

(minimal diversity, more than $5,000,000 in controversy, etc.). 

What should be done with C? Home Depot proposes that a 

party in C’s position (itself) can remove because it was 

brought into the suit involuntarily, by service of process, and 

CAFA permits removal by a single defendant. But that is just 

one of three possible ways of resolving the situation. The options include finding that (1) the entire “case” is removed, 

even though this would mean that the original plaintiff, A,

would win a right to remove that was not in the statute; (2) 

the entire “case” is removed pursuant to § 1441(c)(1), but after 

removal, as § 1441(c)(2) specifies, the court must sever the 

nonremovable case against A and remand just that part to the 

state court, thereby splitting the litigation into two duplicative 

proceedings; or (3) the new counterclaim-defendant, C, has 

no right of removal, because only an original defendant can 

remove—thus avoiding an end-run around Shamrock Oil for 

A and avoiding the inefficient splintering of the litigation.

Each of these possibilities has its pluses and minuses, but 

in the end we think that the one that does the least damage to 

both the jurisdictional statutes providing for removal and litigation efficiency is the third. We understand the Shamrock Oil 

ban against an original plaintiff’s removal to be rooted in the 
10 No. 16-3938

jurisdictional choices Congress made in the removal statutes. 

It would be reduced to a minor formality if any party added 

to a counterclaim could remove: recall, in this connection, that 

the party adding the new counterclaim-defendant would not 

have to be the counterclaim-plaintiff (B, in our example); in 

any state following the model of the federal rules (and in most 

that do not), the original counterclaim-defendant, A, would 

also be entitled to add the new party, which could be any person or entity that meets the criteria of either Rule 19 or Rule 

20. See FED. R. CIV. P. 13(h). This problem would be avoided if 

we were to adopt the case-splitting solution of the second option, following § 1441(c), but that would run squarely counter 

to CAFA’s purpose of consolidating mass class actions in one 

and only one court. It would leave us with the worst of both 

worlds: one giant class action counterclaim proceeding in 

state court, and a parallel class action counterclaim proceeding in federal court. Option 3, in contrast, offers the simple 

and efficient solution of permitting only the original defendant to remove. That is a clear rule that reduces to a minimum 

satellite litigation over which court should hear a case and 

paves the way to resolution on the merits. 

Nothing in First Bank is inconsistent with this outcome. We 

are further reinforced in our conclusion by the fact that no circuit has adopted Home Depot’s view. The only two circuits 

that have squarely addressed this issue agree with us. Palisades Collections LLC v. Shorts, 552 F.3d 327, 334–36 (4th Cir. 

2008); Westwood Apex v. Contreras, 644 F.3d 799 (9th Cir. 2011).

Indeed, First Bank cited Palisades with approval. 598 F.3d at 

916–17.

Palisades is directly on point, as it rejected an additional 

counterclaim-defendant’s argument for removal under 
No. 16-3938 11

§ 1453(b). 552 F.3d at 334–36. The Fourth Circuit reasoned that 

the word “any” did not change the well-established meaning 

of “defendant.” Id. at 335. The Ninth Circuit agreed. Westwood, 

644 F.3d at 804–05. Westwood also reasoned that the removal 

argument of the additional counterclaim-defendants there—

the same one advanced by Home Depot here—would render 

meaningless the phrase “without the consent of all defendants,” which immediately follows “any defendant” in 

§ 1453(b). Id. at 804. See also In re Mortg. Elec. Registration Sys., 

Inc. 680 F.3d 849, 851, 854 (holding that a third-party defendant cannot remove action under § 1453(b)).

C

The final arrow in Home Depot’s quiver is the Supreme 

Court’s relatively recent decision in Dart Cherokee Basin Operating Co., LLC v. Owens, 135 S.Ct. 547 (2014). This is slightly 

surprising because Dart Cherokee does not address the issue 

before us. Dart Cherokee held that a defendant does not need 

to provide evidence showing that CAFA’s $5 million amountin-controversy requirement has been met in order to remove 

an action. 135 S.Ct. at 553. But in the course of reaching that 

conclusion, the Court went out of its way to emphasize that 

there is “no antiremoval presumption ... [in] cases invoking 

CAFA, which Congress enacted to facilitate adjudication of 

certain class actions in federal court.” Id. at 554.

That might be telling if this court had taken a dim view of 

removal in CAFA cases. But as Home Depot recognized during oral argument, we have never applied or endorsed such 

an anti-removal presumption. See Johnson v. Pushpin Holdings, 

LLC, 748 F.3d 769, 773 (7th Cir. 2014); see also Spivey v. Vertrue, 

Inc., 528 F.3d 982, 986 (7th Cir. 2008). Dart Cherokee ratified our 
12 No. 16-3938

understanding of the statute. We add that there is not a whisper in Dart Cherokee of any move to overrule Shamrock Oil. If 

that is where the Supreme Court is going, it will have to get 

there on its own; it is not for us to anticipate such a move.

D

Home Depot argues that absurd results would arise if we 

were to hold that additional counterclaim-defendants cannot 

remove actions under CAFA. It fears that doing so would “reward[ ] gamesmanship,” because lawyers would be able to 

use small-claims litigation as springboards for counterclaim 

class actions that would be stuck in state court. This, it predicts, would re-introduce the forum-shopping CAFA was designed to eliminate.

We are not convinced that this will come to pass. First, the 

state courts have all the tools they need to manage abusive 

amendments to pleadings. Second, we see nothing “absurd” 

about keeping some cases in state court. Shamrock Oil implicitly allows this outcome when the removal-seeking defendant 

is an original plaintiff. In the 75 years since that case was decided, Congress has not seen fit to amend the general removal 

statute to allow such plaintiffs to remove. It is also worth noting that CAFA only selectively increased federal jurisdiction 

over multi-state class actions. It did not roll out the welcome 

mat for all multi-state class actions. Instead, it established restrictions on what class actions the federal courts could and 

could not entertain. These restrictions include amount-in-controversy and numerosity requirements, as well as the “local 

controversy” and “home state” exceptions, contained in 28 

U.S.C. § 1332(d).
No. 16-3938 13

III

If Congress wishes to fine-tune the removal rules for 

CAFA actions, it is free to do so. For now, however, we will 

apply the law as it stands, adopt the approach that is most 

consistent with the removal statutes, adhere to our own ruling 

in First Bank, and maintain consistency with our sister circuits. 

Because an additional counterclaim-defendant, like all other 

counterclaim-defendants, is not entitled to remove a CAFA 

class action under § 1453(b), we AFFIRM the district court’s order remanding this case to state court.