Back in 1990, Kenneth Carter was in an automobile accident with an underinsured motorist, one serious enough to exhaust the other party's limited bodily injury coverage. Carter's policy allowed him to stack coverage, meaning he probably had $150,000 coming to him. But his insurer didn't tell him that, instead allowing him to believe that he only had $50,000 in coverage. So Carter sued his Allstate, his insurer, and made a settlement demand for $250,000. (His counsel represented a few other claimants with similar allegations, and made individual settlement demands of up to $6 million for them.) Allstate tried to remove the case to federal court, but because Carter had joined a local defendant, the case was remanded. After remand, Carter amended his complaint to add class action allegations.
At that point, Allstate removed the lawsuit again under the auspices of the Class Action Fairness Act. And then it moved to strike the class allegations, because it had already faced--and defeated at certification--a class action his lawyers had previously filed alleging similar facts. Allstate did not argue preclusion or comity; instead it made the common-sense argument that the same flaws that had doomed the previous class action were present in Carter's complaint.
At this point, Carter's counsel tried something that probably seemed inspired in the moment: they conceded the motion to strike. They then moved to remand the case again, arguing that the court lacked jurisdiction over Carter's claim for one of four reasons: (1) the amount in controversy was not sufficient; (2) with amendment, his proposed class action was a local controversy because of the claims against the local defendant, (3) the striking of his class allegations should be considered an exception to the "time of removal" rule for jurisdiction, and--requiring particular chutzpah--(4) the striking of his class allegations demonstrated they were frivolous, and therefore his lawsuit was not a real class action for CAFA purposes.
The court, in Carter v. Allstate Ins. Co., 2012 U.S. Dist. LEXIS 117288 (N.D. W. Va. Aug. 21, 2012), rejected each of these arguments. It found that (1) the proposed class action was more expansive than the previous class action that the lawyers had brought in federal court, and therefore would likely meet the $5 million amount in controversy; (2) the defendant claims adjuster had likely not administered every class member's claims, and therefore the claims against her were not a "significant basis" for the class action; and (3) (and (4)) that there was no reason to depart from the normal rule that jurisdiction is determined from the time of removal.
The lesson here is a subtler one than usual. GIven the gantlet they often must run, plaintiffs are often intensely tactical rather than strategic in their thinking. It doesn't matter as much if they have a coherent long-term goal if they can't get past the next motion. (This could be one reason why otherwise-helpful plaintiff's lawyer Max Kennerly always insists that writing kitchen-sink briefs is a good idea.) That can put plaintiffs at a disadvantage against defendants, because unless tactics are part of a larger coherent strategy, it doesn't matter how brilliant they are. At some point, the court's need for a consistent story will catch up with the plaintiffs. And once a party is exposed as acting purely tactically, it lacks the ethos to convince the court in more difficult arguments that may arise. Good strategy is coherent, and that coherency alone will sometimes help one to win.