Court Opinion

ID: 5118776
Source: CourtListenerOpinion
Date Created: 2021-10-15 18:01:08.728721+00
Date Added: 2024-06-11T08:22:09.535577
License: Public Domain

In the

    United States Court of Appeals
                 For the Seventh Circuit
                     ____________________
No. 21-2533
RANITA RAILEY, individually and on behalf of all others simi-
larly situated,
                                           Plaintiff-Appellee,

                                 v.

SUNSET FOOD MART, INC.,
                                               Defendant-Appellant.
                     ____________________

         Appeal from the United States District Court for the
           Northern District of Illinois, Eastern Division.
         No. 1:20-cv-06758 — Harry D. Leinenweber, Judge.
                     ____________________

  ARGUED SEPTEMBER 27, 2021 — DECIDED OCTOBER 15, 2021
                ____________________

   Before EASTERBROOK, KANNE, and SCUDDER, Circuit Judges.
    SCUDDER, Circuit Judge. Ranita Railey clocked in and out of
work at the Sunset Food Mart in Lake Forest, Illinois, by plac-
ing her hand on a biometric scanner. She later brought a class
action in state court alleging violations of the Illinois Bio-
metric Information Privacy Act. Two years into litigation,
Sunset removed the case to federal court. The district court
found Sunset’s removal untimely. Exercising the appellate
2                                                    No. 21-2533

jurisdiction Congress provided in the Class Action Fairness
Act, we aﬃrm the district court’s order remanding to state
court.
                                I
                                A
     Ranita Railey began working at Sunset Food Mart, a small
Illinois grocery chain with ﬁve stores, in January 2016. Three
years later she ﬁled a putative class action on behalf of herself
and other Sunset employees alleging that the company’s use
of a biometric time clock violated the Illinois Biometric Infor-
mation Privacy Act. Railey’s complaint survived dismissal
and proceeded to discovery, when, in November 2020, Sunset
removed the case to federal court.
    The company rooted the removal in its view that Railey’s
claims were completely preempted by the Labor Management
Relations Act. See, e.g., Avco Corp. v. Aero Lodge No. 735, 390
U.S. 557 (1968) (authorizing removal on a complete preemp-
tion theory); Miller v. Southwest Airlines Co., 926 F.3d 898, 904–
05 (7th Cir. 2019) (recognizing the same basis for removal in
the context of the Railway Labor Act). Sunset explained the
timing of the removal by pointing to an interrogatory re-
sponse it received from Railey in October 2020 in which she
conﬁrmed her membership in a labor union. Several months
later, in January 2021, Sunset ﬁled what it called a “Supple-
mental Statement in Support of Jurisdiction” urging the dis-
trict court to ﬁnd that the Class Action Fairness Act also sup-
ported removal. For her part, Railey sought to have the case
remanded to state court.
No. 21-2533                                                    3

                               B
   After extensive brieﬁng, the district court found Sunset’s
removal untimely and ordered the case remanded to state
court.
    First, the district court considered the timeliness of Sun-
set’s preemption-based removal. The court concluded that the
case was not initially removable because nowhere in her state
court complaint did Railey allege membership in a union. The
absence of such an allegation, the district court reasoned,
meant that the ordinary 30-day time limit for removal in 28
U.S.C. § 1446(b)(1) did not apply.
    From there the district court focused on whether the infor-
mation the parties exchanged in discovery alerted Sunset to a
basis for removal and, if so, when. The court saw that as the
right question because, in its view, the case was not initially
removable and Congress imposes on a defendant a second 30-
day removal window upon receipt of an “amended pleading,
motion, order or other paper from which it may ﬁrst be ascer-
tained that the case is one which is or has become removable.”
28 U.S.C. § 1446(b)(3); see also Walker v. Trailer Transit, Inc.,
727 F.3d 819, 824 (7th Cir. 2013) (explaining that § 1446(b)’s
supplemental clock begins to run when “the defendant re-
ceives a pleading or other paper that aﬃrmatively and unam-
biguously reveals that the predicates for removal are pre-
sent”).
   After surveying the parties’ ﬁlings and discovery ex-
changes, the court focused on Sunset’s January 2020 response
to Railey’s ﬁrst request for the production of documents. In
that response, Sunset agreed to produce its agreements with
“the Independent Food Clerks Union, of which Plaintiﬀ was
4                                                   No. 21-2533

aﬃliated prior to her January 1, 2018 promotion to Assistant
Deli Manager.” The district court determined that Sunset’s re-
sponse was the type of “paper” providing “unambiguous no-
tice” that the Labor Management Relations Act applied to and
indeed may completely preempt Railey’s claims—infor-
mation suﬃcient to trigger the start of the 30-day clock in
§ 1446(b)(3). Sunset’s removal in November 2020—nearly
nine months after the company sent the relevant discovery re-
sponse—came too late.
    Second, the district court considered Sunset’s alternative
contention that the Class Action Fairness Act supplied an in-
dependent basis for removal. On this front, the company con-
tended that Railey’s change in domicile from Illinois to Geor-
gia as the litigation proceeded in state court meant the parties
had become minimally diverse and thus the case was remov-
able under 28 U.S.C. § 1332(d)(2)(A). The district court disa-
greed, ﬁnding that here, too, Sunset’s removal was untimely.
     Section 1332(d)(7) instructs district courts to evaluate the
citizenship of members of a proposed plaintiﬀ class “as of the
date of ﬁling of the complaint or amended complaint” or, al-
ternatively, “as of the date of service by plaintiﬀs of an
amended pleading, motion, or other paper, indicating the ex-
istence of Federal jurisdiction.” Based on its prior determina-
tion that Sunset’s January 2020 discovery response was a pa-
per indicating federal subject matter jurisdiction, the district
court concluded that this same acknowledgement by Sunset
also opened a 30-day window under § 1332(d)(7) for the com-
pany to reevaluate Railey’s domicile and, if appropriate, re-
move on diversity grounds. But Sunset waited 11 months, un-
til January 15, 2021, before invoking Class Action Fairness Act
No. 21-2533                                                     5

minimal diversity. So, on this basis, too, the district court con-
cluded that Sunset’s removal was untimely.
   We then granted Sunset’s request to appeal the district
court’s remand order. See 28 U.S.C. § 1453(c)(1).
                                II
    Ordinarily we lack jurisdiction to review a district court’s
remand order. See id. § 1447(d). But Congress established an
exception for certain class actions in the Class Action Fairness
Act. See id. § 1453(c)(1). With that enactment supplying our
jurisdiction, we begin by assessing Sunset’s contention that its
removal was both timely and proper based on Railey’s change
of domicile (and the creation of minimal diversity) in Febru-
ary 2020.
                                A
    The Class Action Fairness Act provides federal district
courts with original jurisdiction over class actions if the puta-
tive class has at least 100 members, the parties are minimally
diverse, and the value of the aggregated claims exceeds
$5 million. See id. § 1332(d). The statute also makes class ac-
tions more easily removable. See id. § 1453(b) (providing that
§ 1446’s one-year limitation on removal in diversity cases
does not apply and eliminating both the requirement that de-
fendants agree unanimously to removal and the prohibition
on removal by so-called “home state” defendants); see also
Dart Cherokee Basin Operating Co., LLC v. Owens, 574 U.S. 81,
89 (2014) (observing that there is “no antiremoval presump-
tion attend[ing] cases invoking CAFA,” especially given Con-
gress’s purpose of “facilitat[ing] adjudication of certain class
actions in federal court”).
6                                                   No. 21-2533

    Removal is not a one-shot proposition. A defendant may
remove even a previously remanded case if subsequent
pleadings or litigation events reveal a new basis for removal.
See, e.g., Benson v. SI Handling Sys., Inc., 188 F.3d 780, 782–83
(7th Cir. 1999) (explaining that “[n]othing in § 1446 forecloses
multiple petitions for removal” as circumstances can change,
“for example, by dismissal of a party whose presence spoiled
complete diversity of citizenship, or by a disclosure that the
stakes exceed the jurisdictional amount”). And separate re-
moval attempts are governed by separate removal clocks. Put
more directly, even if the district court were correct that Sun-
set’s January 2020 discovery response triggered a 30-day clock
for the company to ﬁle a preemption-based notice of removal,
that window does not govern the timeliness of the subsequent
and distinct diversity-based notice of removal under the Class
Action Fairness Act.
    The district court misinterpreted § 1332(d)(7) as compel-
ling a diﬀerent conclusion. In § 1332(d)(7), Congress recog-
nized that a putative class member’s citizenship is not set in
stone. Indeed, that very provision instructs courts to reevalu-
ate the class’s makeup at the time the case becomes removable
under the terms of the Class Action Fairness Act. By Sunset’s
account, that occurred when Railey moved out of Illinois and
changed her domicile to Georgia in February 2020. But the
district court committed error by reading § 1332(d)(7) to im-
pose a 30-day window for a defendant to reevaluate citizen-
ship whenever a case is removable on non-class action
grounds, or to otherwise tie the timeliness of Sunset’s class-
action based removal to the 30-day clock governing its
preemption-based removal under § 1446(b)(3). The bases for
removal were diﬀerent—independent of one another—and so
No. 21-2533                                                     7

were the clocks that measured the timeliness of Sunset’s re-
moval.
   The proper approach, in short, is to evaluate Sunset’s re-
moval under the Class Action Fairness Act on its own terms,
not with some dependence on or connection with the alto-
gether diﬀerent basis for removal rooted in a theory of com-
plete preemption under the Labor Management Relations
Act.
    Recognize further that “[t]he moment a case becomes re-
movable and the moment the 30-day removal clock begins to
run are not two sides of the same coin.” Walker, 727 F.3d at 824
(internal quotations and citation omitted). A plaintiﬀ may
trigger a removal clock—and protect itself against a defend-
ant’s strategic maneuvering—by “aﬃrmatively and unambig-
uously” disclosing facts establishing federal jurisdiction in an
initial pleading or subsequent litigation document. Id. at 824.
But if a defendant independently discovers that the case is re-
movable under the terms of the Class Action Fairness Act, it
may remove the case at whatever point it deems appropriate,
regardless of whether the window for removal on another ba-
sis already opened and closed. See, e.g., Cutrone v. Mortg. Elec.
Registration Sys., Inc., 749 F.3d 137, 146–47 (2d Cir. 2014) (con-
cluding that “removal is permissible outside of the 30-day pe-
riods of 28 U.S.C. §§ 1446(b)(1) and (b)(3) where a defendant’s
own investigation yields evidence of removability”); Roth v.
CHA Hollywood Med. Ctr., L.P., 720 F.3d 1121, 1125 (9th Cir.
2013) (same).
    That is how things unfolded here. Sunset informed the dis-
trict court that it discovered Railey’s change in domicile in
January 2021 through its own social media investigation into
her domicile—not through a pleading, motion, or other paper
8                                                     No. 21-2533

that would have triggered § 1446(b)(3)’s 30-day clock. A few
days later the company advanced its alternative theory of fed-
eral jurisdiction—removal under the Class Action Fairness
Act based on newly discovered facts showing the presence of
minimal diversity. Assuming that Sunset is correct both that
Railey’s domicile (and thus her citizenship) has changed and
that this change created minimal diversity under the statute,
its notice of removal was timely.
    In the end, though, the district court was right to remand
the case. Congress created an exception to Class Action Fair-
ness Act jurisdiction for “home-state controversies.” The ex-
ception directs that district courts “shall decline to exercise ju-
risdiction” over a class action in which “two-thirds or more of
the members of all proposed plaintiﬀ classes in the aggregate,
and the primary defendants, are citizens of the State in which
the action was originally ﬁled.” 28 U.S.C. § 1332(d)(4)(B).
Railey invokes this precise exception, observing that both
Sunset and all of the putative class members (per her pro-
posed class deﬁnition) are Illinois citizens.
    Railey is right that these circumstances precluded Sunset’s
removal under the Class Action Fairness Act. By limiting the
class to Illinois citizens, Railey eliminated any concern that
any Sunset employees domiciled outside the state comprise
greater than one-third of the class and all but “guaranteed
that the suit would remain in state court.” In re Sprint Nextel
Corp., 593 F.3d 669, 676 (7th Cir. 2010).
    The company’s arguments against the exception’s applica-
bility—that Railey has deﬁned herself out of the class; that she
waived this position by not raising it below; that a class pur-
suing Biometric Information Privacy Act claims cannot be re-
stricted to Illinois citizens; and that the individual, subjective
No. 21-2533                                                      9

nature of citizenship creates a predominance issue precluding
class certiﬁcation—are unavailing. Railey has brought a puta-
tive class action on behalf of Illinois citizens against a small
Illinois grocery chain under Illinois law, and “it doesn’t take
any evidence to establish that [Illinois] citizens make up at
least two-thirds of the members of a class that is open only to
[Illinois] citizens.” Id. And even accepting that the home-state
controversy exception is not jurisdictional, we believe the
proper course is to follow Congress’s direction in
§ 1332(d)(4)(B) and aﬃrm the district court’s remand order.
                                B
    We close with a few words on the district court’s assess-
ment of Sunset’s preemption-based removal of Railey’s
claims. We can address the issue because, alongside exercis-
ing the appellate jurisdiction supplied by § 1453(c)(1), “we are
free to consider any potential error in the district court’s deci-
sion.” Brill v. Countrywide Home Loans, Inc., 427 F.3d 446, 451
(7th Cir. 2005). Our recent decision in Fernandez v. Kerry, Inc.
suggests that Railey’s claims may, in fact, be preempted by
the Labor Management Relations Act. No. 21-1067, 2021 WL
4260667, at *1–2 (7th Cir. 2021). On these facts, however, we
have little diﬃculty concluding the district court was right to
grant Railey’s motion to remand. Our reasoning travels a dif-
ferent path, though.
    Recall the general rule. If the case stated by a plaintiﬀ’s in-
itial pleading is removable, a defendant has 30 days after the
pleading is served to ﬁle its notice of removal. 28 U.S.C.
§ 1446(b)(1). That short time limit “forces the defendant to
make a prompt decision about removal once a pleading or
other litigation document provides clear notice that the pred-
icates for removal are present.” Walker, 727 F.3d at 823.
10                                                  No. 21-2533

   But defendants are not required to engage in guesswork
about a plaintiﬀ’s legal theory or exhaustively scrutinize am-
biguous pleadings to discern whether the plaintiﬀ is trying to
obscure a basis for federal jurisdiction. If it is not clear from
the face of the complaint that a plaintiﬀ is seeking more than
$75,000 in damages, for example, the removal clock will not
begin to run until the defendant receives a pleading or other
paper that conveys a qualifying damages amount. Id. at 825.
This rule “promotes clarity and ease of administration for the
courts,” discourages tactical evasiveness by plaintiﬀs, and ob-
viates the need for “wasteful protective removals by defend-
ants.” Id. at 824.
    On the other hand, a defendant cannot bury its head in the
sand or feign ignorance about information within its control.
If removability turns on information about the defendant that
the defendant itself knows or can readily ascertain, the 30-day
clock in § 1446(b)(1) begins to run. This is so because “[w]hen
the defendant has vital knowledge that the plaintiﬀ may lack,
a burden that induces the removing party to come forward
with the information—so that the choice between state and
federal court may be made accurately—is much to be de-
sired.” Brill, 427 F.3d at 447–48.
    Sunset missed its preemption-based removal window
here. Railey’s complaint included her name, her dates of em-
ployment, the job titles she held during the relevant period,
and her work locations. Sunset acknowledged at oral argu-
ment that this information was suﬃcient to determine, either
at the time of service or shortly after, that Railey was repre-
sented by a union. The acknowledgment did not surprise us,
for the company operates ﬁve grocery stores in Illinois and
surely knows, or can discern with ease, whether this or that
No. 21-2533                                                   11

employee works within a unit subject to a collective bargain-
ing agreement. Railey’s class deﬁnition also gave Sunset clear
notice that the proposed class included all of and indeed only
the company’s Illinois employees—many, if not most, of
whom are subject to collective bargaining arrangements.
Based on this information, diligent counsel had everything
necessary to recognize that the Labor Management Relations
Act may preempt Railey’s or the class’s claims.
    Do not read this opinion to impose any meaningful bur-
den on defendants. We stand fully by our prior determination
that district courts are not required to engage in a “fact-inten-
sive inquiry about what the defendant subjectively knew or
should have discovered” about the plaintiﬀ’s case to assess
the timeliness of a defendant’s removal. Walker, 727 F.3d at
825. We add only the straightforward observation that, when
it comes to removal, a defendant can be held to information
about its own operations that it knows or can discern with
ease. That is so here, for the circumstances are akin to asking
a defendant corporation whether it knows its place of incor-
poration and principal place of business. With hardly any ef-
fort, Sunset could have discerned—from the moment it re-
ceived the original complaint—that a collective bargaining
agreement governed its employment relationship with Ranita
Railey and bore on the claims of the putative class. That real-
ity means that the 30-day removal clock in § 1446(b)(1) began
to tick when Railey served her complaint in February 2019.
Sunset’s November 2020 preemption-based notice of removal
was therefore untimely, and the district court’s remand order
was appropriate.
   For these reasons, we AFFIRM.