We routinely report on class actions here on the Product Liability Monitor. With this update, however, we are shifting gears to “mass” actions under the Class Action Fairness Act, commonly referred to as CAFA. Specifically, CAFA creates federal jurisdiction based on minimum diversity for certain class and mass actions. CAFA’s enactment made it more difficult for plaintiffs’ attorneys to “game the system” by trying to defeat diversity jurisdiction. It provides defendants a right to removal to a federal forum for “interstate cases of national importance.” See Cert. Petition.
In Cordis Corporation v. Jerry Dunson, et al., multi-plaintiff lawsuits were filed on behalf of more than 300 plaintiffs in the Superior Court of California. The plaintiffs were residents of at least 35 different states and the District of Columbia, alleging various injuries from the use of Cordis’ inferior vena cava filters, which are designed for high-risk surgical patients to assist in preventing pulmonary emboli from reaching the heart or lungs.
In one pending case, plaintiffs moved to consolidate their case with the other multi-plaintiff actions pending (along with any future cases filed) in the same court on the basis that the claims stemmed from common facts and issues. Plaintiffs’ request sought consolidation “for all pretrial purposes, including discovery and other proceedings.” However, the consolidation request was not limited to solely pretrial proceedings. Rather, plaintiffs requested that consolidation of their cases include a bellwether-trial process in order to avoid inconsistent adjudications.
Thereafter, Cordis removed eight of the cases to the Northern District of California under 28 U.S.C. §1332(d)(11). Under the statute, “mass actions” are “deemed” class actions removable to federal court when plaintiffs propose that “monetary relief claims of 100 or more persons…be tried jointly on the ground that the plaintiffs’ claims involve common questions of law or fact.” A “mass action” only includes a proposal by plaintiffs, not defendants, and does not include claims consolidated “solely for pretrial proceedings.” This provision was “designed to offer a measure of protection to defendants from potentially unfair consolidations extending through trial” in state courts of plaintiffs’ choosing and aimed to “level the playing field” by giving defendants the ability to remove to federal court. At issue here was plaintiffs’ “proposal” for their cases to be “tried jointly.”
Plaintiffs moved to remand, and the Northern District of California granted their request on the basis that the consolidation petition focused primarily on “pretrial” proceedings. As for plaintiffs’ request for a bellwether trial process, the Northern District of California found, relying on a prior Ninth Circuit decision, that a bellwether trial “without more” was an insufficient basis for CAFA removal because it serves an “informational” purpose.
Cordis appealed to the Ninth Circuit. The issue before the Ninth Circuit was whether plaintiffs’ request for a consolidated bellwether trial process qualified the actions for removal. The Ninth Circuit explained that to trigger defendant’s right to removal under CAFA, the results of the bellwether trial must have a preclusive effect on not just defendants, but on plaintiffs too. Since mutual preclusion would only happen with plaintiffs’ consent, the Ninth Circuit concluded that removal was improper. The Ninth Circuit held that plaintiffs’ request for consolidation was only “pretrial” and therefore, did not meet the mass action removal provision’s requirement to be “tried jointly.”
Cordis petitioned to the Supreme Court, emphasizing that the Ninth Circuit’s ruling “eviscerates the mass action removal provisions” of CAFA “by creating an illogical prerequisite to mass action removal that will never be met.” Specifically, the petition argues that the decision means that plaintiffs get the venue result they want by proposing the preclusion result they want –“preclusion that cuts only one way, against defendants.” Indeed, “[t]o bar defendants from removing because plaintiffs do not agree to be bound by adverse factual determinations in a bellwether trial process they propose turns the underlying rationale of mass action removal, as a means of protecting defendants, back upon itself.”
Critically, the petition emphasizes that the Ninth Circuit’s decision is contrary to other Circuit courts, including the Seventh, Eighth, and Third Circuits, which have held that plaintiffs’ proposal for a bellwether-trial process amounts to a proposal to try their claims jointly for purposes of mass action removal to federal court. Indeed, both the Seventh and Eighth Circuits have explicitly concluded that when plaintiffs propose to consolidate 100 or more claims and that proposal includes a request for bellwether trials that may bind defendants under preclusion principles, then defendants can remove to federal court. As the petition stresses, these “Circuits recognize what should be a truism: a bellwether trial process is not pretrial, but trial.” In urging the Supreme Court to revisit the Ninth Circuit’s decision, the petition emphasizes that the Ninth Circuit’s ruling allows plaintiffs to achieve “consolidation with the potential to be maximally prejudicial to defendants by having a single state court selected by plaintiffs make all rulings, and structure and select cases for bellwether trials, with adverse results potentially binding on defendants.” This result puts us “back in the world as it stood before CAFA.”
We will continue to monitor this case and report back on whether the Supreme Court takes on this critical issue.