Source: http://openjurist.org/449/f3d/1159
Timestamp: 2013-05-23 13:09:31
Document Index: 175523700

Matched Legal Cases: ['§ 1453', '§ 1453', '§ 1332', '§ 1332', '§ 2', '§ 1441', '§ 1819', '§ 1332', '§ 1332', '§ 1332', '§ 1332', '§ 1332', '§ 1332', '§ 1332', '§ 1332', '§ 1332', '§ 1332']

449 F3d 1159 Evans Jl v. Walter Industries Inc US Tc Lp | OpenJurist
449 F. 3d 1159 - Evans Jl v. Walter Industries Inc US Tc Lp	Home449 f3d 1159 evans jl v. walter industries inc us tc lp
449 F3d 1159 Evans Jl v. Walter Industries Inc US Tc Lp 449 F.3d 1159
Isaiah EVANS, Lillian Fomby, Ida Adams, Carter Adams, Albert McCrory, J.L. Stringer, Rosetta Bailey, individuals on behalf of themselves and a class of persons similarly situated, Plaintiffs-Appellees,v.WALTER INDUSTRIES, INC., f.k.a. U.S. Pipe and Foundry, f.k.a. T.C. King Pipe and Fittings Co., et al., Defendants,MeadWestvaco Corporation, f.k.a. Standard Foundry, f.k.a. Mead Corporation, f.k.a. Woodward Iron, f.k.a. Alabama Pipe Company, f.k.a. LynchburgFoundry, United Defense LP, Scientific-Atlanta, Inc., f.k.a. Southern Tool, Huron Valley Steel Corporation, Defendants-Appellants.
No. 06-11974.
Appellants United Defense LP, MeadWestvaco Corporation, Scientific-Atlanta, Inc., and Huron Valley Steel Corporation challenge the district court's decision to remand this case to the Alabama state court. Appellants argue that this case belongs in federal court under the recently-enacted Class Action Fairness Act ("CAFA"), Pub.L. No. 109-2, 119 Stat. 4 (2005) (codified in scattered sections of 28 U.S.C.), and because the plaintiffs fraudulently joined non-diverse defendants in order to evade federal jurisdiction. We hold that the federal district court has jurisdiction over this case under CAFA. We need not reach the issue of fraudulent misjoinder.
The district court's decision to remand is reviewed de novo. Brown v. Snow, 440 F.3d 1259, 1262 (11th Cir.2006) ("We review questions of subject matter jurisdiction de novo.").
A. The Sixty-Day Rule
Under CAFA, when a district court grants or denies remand to state court, a party may make an "application" for appeal to the court of appeals. 28 U.S.C. § 1453(c)(1). We believe that Congress' choice of language is significant. Section 1453(c)(1) provides for an "application" to the court of appeals, not a "notice of appeal," within 7 days of the district court's remand order. Section 1453(c)(2) provides that the court of appeals shall complete all action 60 days after the date on which the "appeal was filed," not 60 days from the date on which the "application" was filed.
We also find it significant that review by the appeals court is clearly discretionary. See 28 U.S.C. § 1453(c)(1) ("a court of appeals may accept an appeal") (emphasis added). Thus, it is plausible to conclude that Congress contemplated the application of Fed. R.App. P. 5, which governs discretionary appeals. We conclude that a request for appeal under CAFA is subject to Fed. R.App. P. 5, entitled "Appeal by Permission." Rule 5(d)(2) provides: "A notice of appeal need not be filed. The date when the order granting permission to appeal is entered serves as the date of the notice of appeal for calculating time under these rules." Thus, there is no notice of appeal, and no appeal, until the court of appeals accepts the application, whence the appeal is deemed filed.
Accordingly, we hold that the "date on which such appeal was filed" is the date that the court of appeals accepts the appeal, and thus files the appeal. We agree with the resolution of every other court of appeals which has ruled on this issue. In this regard, we agree with the reasoning of Patterson v. Dean Morris, LLP, 444 F.3d 365 (5th Cir.2006) and Amalgamated Transit Union v. Laidlaw Transit Services., Inc., 435 F.3d 1140, 1145 (9th Cir. 2006). See also Pritchett v. Office Depot, Inc., 420 F.3d 1090, 1093 (10th Cir.2005).
B. CAFA and the Local Controversy Exception
Congress enacted CAFA on February 18, 2005. Under CAFA, federal courts now have original jurisdiction over class actions in which the amount in controversy exceeds $5,000,000 and there is minimal diversity (at least one plaintiff and one defendant are from different states). 28 U.S.C. § 1332(d)(2). CAFA, however, does have an exception to federal jurisdiction for cases that are truly local in nature. 28 U.S.C. § 1332(d)(4)(A).
S. Rep. 109-14, at 39, U.S.Code Cong. & Admin. News at 38. The language and structure of CAFA itself indicates that Congress contemplated broad federal court jurisdiction, see e.g., Pub.L. No. 109-2, § 2(b)(2), 119 Stat. 4 ("providing for Federal court consideration of interstate cases of national importance under diversity jurisdiction"), with only narrow exceptions. These notions are fully confirmed in the legislative history.
The district court correctly determined that the plaintiffs bear the burden of establishing that they fall within CAFA's local controversy exception. CAFA allows for removal of class actions that meet certain minimal requirements. CAFA does not change the traditional rule that the party seeking to remove the case to federal court bears the burden of establishing federal jurisdiction. See Brill v. Countrywide Home Loans, Inc., 427 F.3d 446 (7th Cir.2005). The parties do not dispute that the defendants have carried this burden and established that this action meets CAFA's basic requirements for removal to federal court — i.e., the controversy exceeds $5,000,000 and at least one plaintiff and one defendant are from different states (the minimal diversity requirement). However, when a party seeks to avail itself of an express statutory exception to federal jurisdiction granted under CAFA, as in this case, we hold that the party seeking remand bears the burden of proof with regard to that exception. Cf. Breuer v. Jim's Concrete of Brevard, Inc., 538 U.S. 691, 697-98, 123 S.Ct. 1882, 1886, 155 L.Ed.2d 923 (2003) (when a defendant removes a case under 28 U.S.C. § 1441(a), the burden is on a plaintiff to find an express exception to removal).3
In addition to Breuer, we find support for our decision in Castleberry v. Goldome Credit Corp., 408 F.3d 773 (11th Cir.2005) and Lazuka v. Federal Deposit Insurance Corp., 931 F.2d 1530 (11th Cir.1991). Both cases addressed the removal of actions involving the Federal Deposit Insurance Corporation (FDIC). The courts held that once the FDIC has established the prerequisites for removal under 12 U.S.C. § 1819(b)(2)(B) (i.e., the action was filed against the FDIC, and the FDIC removed the action within 90 days), then the burden of establishing the "state action" exception to federal jurisdiction shifts to the party objecting to removal. Castleberry, 408 F.3d at 785; Lazuka, 931 F.2d at 1538. As in our situation, the removing party bears the initial burden of establishing federal jurisdiction, but the objecting party bears the burden of proving an express statutory exception once federal jurisdiction has been established under the main provisions of the statute. The instant case is very similar, and the instant statute is very similar. Here 28 U.S.C. § 1332(d)(2) provides that federal courts shall have original jurisdiction of any civil action that is a class action satisfying the $5,000,000 amount in controversy and the minimal diversity requirements. Then § 1332(d)(4) sets out a very specific exception, the local controversy exception, to the jurisdiction otherwise provided in § 1332(d)(2). We conclude that the statutory framework at issue here is very similar to that involved in Castleberry and Lazuka. We hold that the plaintiffs here — the parties objecting to removal after the prerequisites for removal jurisdiction have been met — have the burden of proving the local controversy exception.
No other Circuit appears to have addressed the specific question of which party should bear the burden of proof on CAFA's local controversy exception. Two other Circuits have determined that CAFA does not upset the traditional rule that the removing party bears the burden of proof with regard to establishing federal court jurisdiction. Abrego Abrego v. Dow Chemical Co., 443 F.3d 676 (9th Cir.2006); Brill, 427 F.3d 446. We agree with these courts that CAFA does not change the well-established rule that the removing party bears that burden of proof. However, neither case involved a removing defendant who did satisfy its burden of proving the jurisdictional prerequisites, as the defendants here did when they proved that the amount in controversy exceeded $5,000,000 and that there was the necessary minimal diversity.4 Neither case involved the local controversy exception.
Thus, we address as a question of first impression the issue of who bears the burden of proving the local controversy exception, once the removing defendants have proved the amount in controversy and the minimal diversity requirement, and thus have established federal court jurisdiction under § 1332(d)(2). For the reasons set out above, and by analogy to Breuer, 123 S.Ct. at 1886, Castleberry, 408 F.3d at 784-85, and Lazuka, 931 F.2d at 1538, we hold that the plaintiffs bear the burden of proving the local controversy exception to the jurisdiction otherwise established.
3. Citizenship of Plaintiff Class
4. Significant Defendant Test
We also hold that plaintiffs have failed to prove the "significant defendant" prong of the local controversy exception. In order to avail itself of the local controversy exception, pursuant to § 1332(d)(4)(A), the plaintiffs must prove that:
28 U.S.C. § 1332(d)(4)(A)(i)(II). The district court held that U.S. Pipe, an Alabama corporation, was a significant defendant. We disagree and hold that plaintiffs have failed to prove that U.S. Pipe was a significant defendant as defined by CAFA.
Only a few courts have interpreted the local controversy exception to federal jurisdiction. At least two courts have held that a class seeks "significant relief" against a defendant when the relief sought against that defendant is a significant portion of the entire relief sought by the class. See Robinson v. Cheetah Transportation, 2006 WL 468820 (W.D.La. Feb.27, 2006); Kearns v. Ford Motor Company, 2005 WL 3967998 (C.D.Cal. Nov.21, 2005). As the Robinson court stated:
The "local controversy" exception can be satisfied in either of two ways, as provided for respectively in 28 U.S.C. § 1332(d)(4)(A) or (B). The instant case involves only § 1332(d)(4)(A)
The parties dispute whether the complaint can fairly be read to allege joint and several liability on the part of the defendants. We need not resolve that dispute. Even if the complaint does, and even if that satisfied the plaintiffs' burden with respect to the significant relief prong, § 1332(d)(4)(a)(i)(II)(aa), plaintiffs nevertheless have failed to satisfy § 1332(d)(4)(a)(i)(II)(bb) which requires that the "alleged conduct [of a significant defendant] form[] a significant basis for the claims asserted by the proposed class." In other words, the mere fact that relief might be sought against U.S. Pipe for the conduct of others (via joint liability) does not convert the conduct of others into conduct of U.S. Pipe so as to also satisfy the "significant basis" requirement
Home449 f3d 1159 evans jl v. walter industries inc us tc lp