SAN FRANCISCO (Legal Newsline) - An appeals court has upheld the right of out-of-state defendants to remove lawsuits from state court to federal court when the suit involves numerous plaintiffs.
"We must decide whether removal is proper under the 'mass action' provision of the Class Action Fairness Act of 2005...when plaintiffs in several actions moved for coordination in the state trial court pursuant to California Code of Civil Procedure section 404 'for all purposes' and justified their request in part by asserting a need to avoid inconsistent judgments," the Nov. 18 opinion filed in the U.S. Court of Appeals for the Ninth Circuit states.
Chief Judge Alex Kozinski and circuit judges Barry G. Silverman, Susan P. Graber, Ronald M. Gould, Richard C. Tallman, Richard R. Clifton, Mary H. Murguia, Morgan Christen and Andrew D. Hurwitz voted in the majority, with Gould authoring the opinion.
Circuit judges Johnnie B. Rawlinson and Marsha S. Berzon voted in the minority, with Rawlinson authoring a dissenting opinion.
The plaintiffs in propoxyphene pain reliever litigation moved for coordination in the state trial court pursuant to California Code of Civil Procedure section 404. The court held that plaintiffs’ petitions to coordinate actions under Section 404 constituted proposals for these actions to be tried jointly, making the actions a "mass action" subject to removal and federal jurisdiction under CAFA.
"To date, more than forty actions have been filed in California state courts regarding propoxyphene pain relievers," the opinion states. "On October 23, 2012, a group of attorneys responsible for many of the propoxyphene actions against Teva, Xanodyne and other defendants filed petitions asking the California Judicial Council to establish a coordinated proceeding for all California propoxyphene actions under section 404 of the California Code of Civil Procedure."
The cases were originally filed in California state court and removed to the U.S. District Court for the Central District of California on Nov. 20, 2012. On Feb. 20, 2013 and March 12, 2013, they were remanded back to state court.
Xanodyne Pharmaceuticals Inc. and Teva Pharmaceuticals USA Inc. appealed the orders, arguing the federal court had jurisdiction under CAFA.
"CAFA extends federal removal jurisdiction for certain class actions and for mass actions 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 opinion states. "Because we conclude that all of the CAFA requirements for a removable mass action are met under the totality of the circumstances in these cases, we reverse the district court’s remand orders."
The Ninth Circuit reversed the district court’s orders granting motions to remand to state court based on the its conclusion that all of the CAFA requirements for a removable mass action were met under the totality of the circumstances.
The Class Action Fairness Act extends federal removal jurisdiction for certain class actions and for mass actions 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 laws of law or fact."
"This is admittedly a fairly close case but, upon reflection, I respectfully dissent from the conclusion of my esteemed colleagues that this case fits within the parameters for removal under the Class Action Fairness Act of 2005," Rawlinson's dissenting opinion states. "I start from the well-established premise that removal is disfavored when determining federal jurisdiction, and that any doubt that exists when considering removal statutes should be construed against removal."
CAFA's mass action provision is "fairly narrow," according to the dissenting opinion.
"With those principles firmly in mind, I reach a different conclusion than that of the majority," the dissenting opinion states. "The plain language of the Class Action Fairness Act...confers jurisdiction upon federal district courts to try a 'mass action.'"
The conclusion that the plaintiffs implicitly requested a joint trial is not supported by the language of CAFA or by the cases from the Seventh and Eighth Circuits so heavily relied upon by the majority, according to the dissenting opinion.
Last year, the Washington Legal Foundation filed an amicus brief in support of a petition for rehearing in the appeal.
"Congress passed the Class Action Fairness Act to guarantee out-of-state defendants a federal forum when large class-action lawsuits are filed against them," said Richard Samp, chief counsel for the Washington Legal Foundation, in a press release. "Plaintiffs’ lawyers keep trying devious new strategies to prevent removal to federal court, but today’s decision goes a long way in preventing such gamesmanship."
The 85 plaintiffs in the two class actions include Margalit Corber, Rene Caro, Steve Dantzler, Linda Sowards, Lori Huisman, Johnny George Sr., Terry Perry, William Rackley, Angela Young, and Pamela Rodriguez.
Teva is represented by Jay Lefkowitz, Daniel A. Bress and Danielle R. Sassoon of Kirkland & Ellis LLP in New York; and Ginger Pigott, Amy B. Alderfer and Karin L. Bohmholdt of Greenberg Traurig LLP in Los Angeles, among others.
Xanodyne is represented by Karin Bohmholdt of Greenberg & Traurig LLP in Los Angeles; Karen Woodward, Hall R. Marston and Christopher P. Norton of Sedgwick LLP in Los Angeles; and Linda E. Maichl and Michael J. Suffern of Ulmer & Berne LLP in Cincinnati.
The plaintiffs are represented by Louis M. Bograd and Andre M. Mura of Center for Constitutional Litigation in Washington, D.C.; Matthew J. Sill of Sill Law Group LLP in Edmond, Okla.; and Andrew N. Chang and Stuart B. Esner of Esner, Chang & Boyer in Pasadena, Calif., among others.
U.S. Court of Appeals for the Ninth Circuit case number: 13-56306, 13-56310
From Legal Newsline: Kyla Asbury can be reached at firstname.lastname@example.org.