In College of Dental Surgeons of Puerto Rico v. Connecticut General Life Insurance Company, 585 F.3d 33 (1st Cir. 2009), a statutorily-created, compulsory-membership association of Puerto Rico dentists sued multiple insurance companies in a Puerto Rico trial court alleging that defendants’ practices violated Puerto Rico law and harmed association members. Plaintiff sought class action treatment under Puerto Rico statute, declaratory and injunctive relief and $150 million in damages. Certain defendants removed the action to the United States District Court for the District of Puerto Rico under the expanded diversity jurisdiction provisions of the Class Action Fairness Act (“CAFA”). On motions of plaintiff and other defendants, however, the district court remanded the action, reasoning that CAFA jurisdiction was lacking because the complaint did not sufficiently define the putative class to meet the requirements of Fed. R. Civ. P. 23. The United States Court of Appeals for the First Circuit, pursuant to 28 U.S.C. § 1453(c)(1), granted the removing defendants’ application for interlocutory appeal from the remand order.
The court first observed that § 1453(c)(1) grants federal courts of appeals discretionary authority to accept an appeal from a district court decision on a motion to remand a putative class action—whereas remand orders were not appealable before CAFA—but does not elaborate on how that discretion should be exercised. The court accordingly articulated criteria bearing on its willingness to accept such an appeal, including: whether the CAFA question presented is important, unsettled, consequential to the resolution of the case, likely to evade review absent interlocutory appeal and likely to recur; whether the district court’s order is sufficiently final to permit review; and the balance of harms.
Turning to the trial court’s order, the court noted that CAFA created federal jurisdiction for class actions—defined as any civil action filed under Fed. R. Civ. P. 23 or any “similar [s]tate statute or rule . . . authorizing an action to be brought by 1 or more persons as a class action”—in which the amount in controversy exceeds $5 million and any defendant is diverse in citizenship from any plaintiff. Under the statutory language, therefore, the court held that the relevant issue for jurisdictional purposes was not whether the proposed class satisfied the requirements of Fed. R. Civ. P. 23 on the bare pleadings, but simply whether the suit had been “brought . . . as a class action” under Puerto Rico statute, which it had. In response to appellees’ contention that the suit could not have been brought as a class action because the association lacked standing to assert class claims on its members’ behalf, the court applied federal standing law to conclude that plaintiff had associational standing to sue on its members’ behalf, at least with respect to the claims for declaratory and injunctive relief. Accordingly, the court reversed the remand order.