In a recent decision, the Ninth Circuit Court of Appeals strictly construed the “single local event” exception to federal jurisdiction under CAFA as not encompassing “events or occurrences” that are of a continuing nature.

Plaintiffs are Washington residents who filed a complaint in state court alleging that Boeing contaminated their groundwater and, together with its environmental remediation contractor, Landau, did not properly investigate, remediate, and clean up the contamination, or warn plaintiffs of the contamination. Boeing removed the action to federal court, asserting that federal jurisdiction existed under CAFA because the case qualified as a “mass action” in which “monetary relief claims of 100 or more persons are proposed to be tried jointly on the ground that the plaintiffs’ claims involve common questions of law or fact . . .”

The district court remanded the case to state court, because it found that, under the single local event exception, the term “mass action” does not include a civil action in which “all of the claims in the action arise from an event or occurrence in the State in which the action was filed, and that allegedly resulted in injuries in that State or in States contiguous to that State.”  In reaching this decision, the district court departed from the Ninth Circuit’s prior strict construction of “event or occurrence,” as that phrase is used in the single local event exception, and instead chose to apply the Third Circuit’s broader construction of the phrase.

Specifically, the Ninth Circuit has strictly construed the phrase “event or occurrence” to apply “only where all claims arise from a single event or occurrence,” such as an environmental accident, that gives rise to the claims of all plaintiffs.” According to the Ninth Circuit, this interpretation is consistent with the legislative history of CAFA, from which it is clear that the single local event exception was intended to apply “only to a truly local single event with no substantial interstate effects” in order to “allow cases involving environmental torts such as a chemical spill to remain in state court if both the event and the injuries were truly local.”

In contrast, the Third Circuit has more broadly construed the phrase “event or occurrence” to also possibly apply where the record demonstrates circumstances that share some commonality and persist over a period of time. According to the Third Circuit, the plain text of the statutory scheme does not delimit the words “event or occurrence” to a specific incident with a fixed duration of time. Moreover, because those words do not commonly or necessarily refer in every instance to what transpired at an isolated moment in time, there would be no reason to conclude that Congress intended to limit the phrase “event or occurrence” in such a way. To the contrary, Congress recognized that some mass actions are better suited to adjudication in the state courts where they originated, which is apparent not only from CAFA’s “event or occurrence” exclusion for mass actions, but also from its local-controversy and home-state exceptions. These CAFA provisions assure that aggregate actions with substantial ties to a particular state remain in the courts of that state.

On appeal of the district court’s decision to remand, the Ninth Circuit decided that it was unnecessary to reconcile its definition of “event or occurrence” with the Third Circuit’s, because, in the absence of intervening higher authority based on reasoning clearly irreconcilable with its own, the court was bound by its own precedent. And even if that were not the case, the court stated that it would not adopt the Third Circuit’s broad definition of “event or occurrence” for several additional reasons. First, the court reasoned that the broad definition would render other CAFA provisions redundant, such as the local controversy exception. Second, the court examined legislative history showing the intent of Congress to “draw[] a line between a one-time chemical spill and a continuing course of pollution, contamination, or conduct that occurs over a period of years.” Finally, the court deemed reconciliation unnecessary under the facts of the case, because, even if “event or occurrence” could be interpreted to cover one continuing activity or tort, that is not what plaintiffs alleged in their complaint. Rather, plaintiffs were seeking relief from at least two separate activities by two distinct defendants:  the leeching of hazardous materials over the course of 40 years by Boeing, and the negligent failure to remediate the pollution over the course of 10 years by Landau. As such, there was no basis to apply the single local event exception, and the case should not have been remanded by the district court.

Allen v. The Boeing Co. and Landau Assocs., Inc., No. 15-35162 (9th Cir. Apr. 27, 2015).