Home Depot U.S.A., Inc. v. Jackson, 139 S. Ct. 1743 (2019). Among other changes made by the so-called Class Action Fairness Act of 2005, 28 U.S.C. 1453(b) (“CAFA”) made it easier for class action defendants to remove to federal court putative class action cases filed in state courts. That provision states that a class action may be removed by “any defendant without the consent of all defendants.” CAFA supplemented the general removal statute, 28 U.S.C. 1441(a), which permits removal of any civil action “by the defendant or the defendants.”
But what about the circumstance where “a third-party counterclaim defendant— that is, a party brought into a [state court] lawsuit through a counter-claim filed by the original defendant,” is sued in that pleading by a putative class? Can that third-party counterclaim defendant remove the case to federal court? Today, in a 5-4 decision, the Supreme Court of the United States said “no” to the attempt of Home Depot to do that. Justice Thomas wrote the majority opinion, in which Justices Ginsburg, Breyer, Sotomayor, and Kagan joined. Justice Alito authored the dissenting opinion, to which the Chief Justice and Justices Gorsuch and Kavanaugh also subscribed.
The essential issue was what the meaning of “defendant” under CAFA and the removal statute was intended to be. The majority concluded that “defendant” did not include third party counterclaim defendants. Justice Thomas buttressed that result by citing Shamrock Oil & Gas Co. v. Sheets, 313 U.S. 100 (1941), which held that an original plaintiff may not remove a counterclaim against it. The majority saw no reason not to apply the same principle to third party counterclaim defendants, who are merely located in a different part of the “v.”
Justice Thomas also observed that the use of the term “defendant” elsewhere confirmed that Congress did not intend to stretch that term to cover third party counterclaim defendants in this context. Rules 12 and 14 of the Federal Rules of Civil Procedure, for example, “differentiate between third-party defendants, counterclaim defendants, and defendants.” And other sections of the general removal statute permit “any party,” not just a “defendant,” to remove.
Those rationales supported the majority’s view that the general removal statute did not permit third party counterclaim defendants to remove. But Home Depot argued that CAFA , which states that “any defendant” can remove, saved the day for third party counterclaim defendants. Justice Thomas did not agree.
“To the extent Home Depot is arguing that the term ‘defendant’ has a different meaning in §1453(b) than it does in §1441(a), we reject its interpretation. Because §§1453(b) and 1441(a) both rely on the procedures for removal in §1446, which also employs the term ‘defendant,’ interpreting ‘defendant’ to have different meanings in different sections would render the removal provisions incoherent.” And CAFA’s provision that “any” defendant can remove was used merely in connection with the language about removal without the consent of “all” defendants.
The dissenters complained that the majority had allowed defendants to use CAFA as a “tactic” to prevent removal. But Justice Thomas said that that was merely the result of the language that Congress chose to use. Congress, he said, has the power to change the statute, but the Supreme Court does not.
The dissenters were evidently frustrated that their continuing effort to benefit parties who defend class actions did not succeed today. But it is at best ironic that a group of Justices who normally prize the literal language of statutes rejected the majority’s focus on the language of the general removal statute and CAFA in today’s case. It is unusual for Justice Thomas to join the Court’s moderates in a case such as this. But he showed fidelity to principles of statutory interpretation that generally animate the Court, even though the result might not have been one that he would normally favor.