Source: http://californiafinance.mwbllp.com/2017/05/fyi-9th-cir-holds-consolidated.html
Timestamp: 2020-01-27 17:05:37
Document Index: 507588666

Matched Legal Cases: ['§ 1332', '§ 1332', '§ 1332', '§ 1332', '§ 1332', '§ 1332', '§ 1048', '§ 1048', '§ 1048', '§ 1048', '§ 1332']

California Finance Litigation Blog: FYI: 9th Cir Holds Consolidated "Bellweather-Trial" of Multiple Actions Did Not Meet CAFA's "Mass Action" Requirements
The U.S. Court of Appeals for the Ninth Circuit recently affirmed that consolidating multiple actions for pre-trial purposes and a bellweather-trial process is insufficient to justify the removal of those actions to federal court under the "mass action" provision of the Class Action Fairness Act ("CAFA").
In doing so, the Ninth Circuit rejected several arguments the removing defendant made based on language contained in the plaintiffs' motion to consolidate. The Court concluded that even though, as consolidated, the matters satisfied the numerosity requirement of a "mass action" under CAFA, the plaintiffs did not intend a joint trial for all of the plaintiffs, which is also required under CAFA. Therefore, according to the Ninth Circuit, the consolidated cases should not have been removed pursuant to CAFA's mass action provision.
As you may recall, under CAFA, large multi-state class actions can be removed to federal court. In addition, Congress made "mass actions" also removable based on similar standards as class actions. Under CAFA, a "mass action" is defined as a civil action, other than a class action, "in which monetary relief claims of 100 or more persons are proposed to be tried jointly on the ground that the plaintiff's claims involve common questions of law or fact." See 28 U.S.C. § 1332(d)(11)(B)(i).
Here, the defendant was a manufacturer of medical devices facing eight different product liability lawsuits filed against it in state court. The plaintiffs requested that the matters be consolidated "for all pretrial purposes, including discovery and other proceedings, and the institution of a bellweather-trial process." The plaintiffs further asserted that consolidation for a bellweather-trial process "will avoid unnecessary duplication of evidence and procedures in all of the actions, avoid the risk of inconsistent adjudications, and avoid many of the same witnesses testifying on common issues in all actions, as well as promote judicial economy and convenience."
The defendant removed the matters to federal court based on the mass action provision in CAFA. The plaintiffs challenged the removal. The trial court ruled that plaintiffs' consolidation motion did not propose a joint trial of plaintiffs' claims, as required under § 1332(d)(11)(B)(i), and remanded the matters back to state court. The Ninth Circuit accepted the defendant's immediate appeal.
The Ninth Circuit identified another provision in CAFA that factored into whether removal was appropriate. Specifically, the definition of a mass action under CAFA excludes any civil action in which the plaintiffs' claims "have been consolidated or coordinated solely for pretrial proceedings." 28 U.S.C. § 1332(d)(11)(B)(ii)(IV). Thus, according to the Court, the issue presented was, based on the language contained in plaintiffs' motion to consolidate, whether the plaintiffs' proposal for a bellweather-trial process constituted a proposal to try the claims jointly. If so, the Court held, the requirements of § 1332(d)(11)(B)(i) would be satisfied.
The Court acknowledged that there were two types of bellweather-trials to be held in class or mass actions. The first type is when the claims of a representative plaintiff or small group of plaintiffs are tried and the parties in the other cases agree they will be bound by the outcome of that trial, at least as to common issues. According to the Ninth Circuit, this was the least common type of the bellweather-trials.
The second, far more common, type of bellweather-trial is where the claims of a representative plaintiff or plaintiffs are tried, but the outcome is binding only on those parties to the trial, and not any of the other parties in other cases. Instead, the parties in the other cases use the trial outcome for informational purposes and to aid in settlements.
The Ninth Circuit determined that if plaintiffs proposed holding a bellweather-trial of the first type (i.e., the claims of a representative plaintiff or small group of plaintiffs are tried and the parties in the other cases agree they will be bound by the outcome of that trial, at least as to common issues), then the plaintiffs proposed a joint trial of their claims under § 1332(d)(11)(B)(i) because the findings in the bellweather-trial would have preclusive effect on the plaintiffs in the other cases.
However, the Ninth Circuit held, if the plaintiffs proposed holding a bellweather-trial of the second type (i.e., where the claims of a representative plaintiff or plaintiffs are tried, but the outcome is binding only on those parties to the trial, and not any of the other parties in other cases), then the plaintiffs did not propose trying the plaintiffs' claims jointly under § 1332(d)(11)(B)(i).
The defendant argued that plaintiffs' motion to consolidate made several references that required the court to conclude plaintiffs were requesting a bellweather-trial of the first type.
The first argument defendant made was that the plaintiffs moved to consolidate the matters pursuant to California Code of Civil Procedure § 1048(a). According to the defendant, § 1048(a) did not allow consolidation for pretrial purposes only. The Ninth Circuit rejected this argument, finding that no such language existed in that provision. In addition, the Ninth Circuit concluded that § 1048 was amended in 1971 to mirrorFed.R.Civ.Pro. 42, which "has long been interpreted to allow for consolidation for pretrial purposes only." The Court also found that the one case the defendant relied on in support of this argument actually acknowledged that § 1048(a) authorized two types of consolidation, one for purposes of trial and the other for all purposes, including trial.
The defendant's second argument in support of its assertion that plaintiffs intended for a bellweather-trial that had a preclusive effect was that one of the reasons plaintiffs gave for consolidating the matters was to "avoid the risk of inconsistent adjudications." The Ninth Circuit rejected this argument as well, finding that the plaintiffs could have been referring to several different issues related to "inconsistent adjudications," including evidentiary motions, dispositive motions and motions in limine. The Court determined that defendant did not satisfy its burden of eliminating alternative interpretations of "inconsistent adjudications," and, as a result, its second argument was not persuasive to the Court.
The final argument the defendant made was that plaintiffs' motion to consolidate defined "inconsistent adjudications" to mean "different results because tried before different judge and jury, etc." The Ninth Circuit found that, when read in isolation, the plaintiffs' definition supported defendant's argument. According to the Court, however, the defendant took the definition out of context. The definition was given in a passage related to the general purposes of consolidation. More importantly, the plaintiffs immediately followed the definition with a disclaimer stating they were not seeking consolidation "for purposes of a single trial to determine the outcome for all plaintiffs," and that they were seeking "a single judge to oversee and coordinate common discovery and pretrial proceedings." The plaintiffs went on to state that the bellweather-trial "would likely prove an effective tool to resolution of the [other] cases."
Taken collectively, according the Ninth Circuit, the plaintiffs' motion to consolidate established plaintiffs were seeking a bellweather-trial of the limited-binding type, such that the plaintiffs did not propose trying the plaintiffs' claims jointly under § 1332(d)(11)(B)(i).
Thus, in affirming the trial court's remand of the matters to state court, the Ninth Circuit concluded that plaintiffs' request for consolidation of pretrial proceedings does not trigger the mass action removal under CAFA, and that plaintiffs' request for a bellweather-trial process did not indicate they were seeking a trial whose result would have a preclusive effect on the plaintiffs in the other cases. In the absence of such an intent, the Court held, removal jurisdiction under the mass action provision of CAFA did not exist.
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