Mass Action Plaintiffs Must be Careful in Pleading, or Their Case Will be Removable to Federal Court Under CAFA

Ramirez v. Vintage Pharmaceuticals, LLC, 852 F.3d 324 (3d Cir. 2017).  The so-called Class Action Fairness Act of 2005 (“CAFA”) extended federal jurisdiction not only to class actions over which federal courts previously did not have power, but also to “mass actions.”  28 U.S.C. §1332(d)(11).  To qualify as a mass action, there must be at least 100 plaintiffs who seek to have their cases “tried jointly.”  But as Judge Vanaskie noted in his opinion today, “cases that are consolidated or coordinated only for pretrial purposes are explicitly exempted from CAFA’s mass action provision, and thus are not removable.”  The question in this case was whether the matter qualified as a mass action that was subject to federal jurisdiction under CAFA.

In this case, 113 users of birth control products filed a product liability case in Pennsylvania state court against manufacturers of those pills.  Defendants invoked CAFA’s mass action provision and removed the case to federal court.  Plaintiffs sought to remand the case back to state court, citing language in their complaint that their “claims have been filed together … for purposes of case management on a mass tort basis.”  The District Court agreed with plaintiffs and remanded the case.

Defendants sought review under 28 U.S.C. §1453(b), which allows removal of class or mass actions and affords appellate review of remand orders.  The Third Circuit accepted the appeal and reversed the District Court, holding that the removal of the case to federal court was permissible.  Defendants, as the parties seeking removal, had the burden of demonstrating the propriety of removal, but the panel found that defendants had carried that burden.  Judge Vanaskie observed that the legal issue of whether the case was a mass action was subject to de novo review.

Judge Vanaskie ruled that several elements of plaintiffs’ complaint represented an explicit request for a joint trial.  “First, after each count in the Complaint, Plaintiffs ‘respectfully request a jury trial’– never multiple or separate trials.”  Second, plaintiffs’ prayer for relief sought “an award of damages in such amount to be determined at trial,” not separate damage awards.  Third, a Notice to Defend warned defendants that if they did not appear, “a judgment” might be entered against them.  Fourth, the Complaint said that all plaintiffs’ claims arose “out of a common separate of operative facts” that were “common to all counts.”  Finally, Judge Vanaskie cited cases from other Courts of Appeal that had stated that a complaint on behalf of more than 100 plaintiffs that alleges common questions of law and fact creates a presumption that the plaintiffs “have implicitly proposed a joint trial.”

Judge Vanaskie then addressed plaintiffs’ contention that the language stating that the cases had been filed together “for purposes of case management on a mass tort basis” took their case out of the mass action category.  He recognized that plaintiffs, as the masters of their complaint, could plead around the CAFA mass action provision, and that “a clear and express statement in the Complaint evincing an intent to limit coordination of claims to some subset of pretrial proceedings would effectively shield this action from removal under CAFA.”

But plaintiffs’ language here was not specific enough.  The verbiage did not limit coordination to pretrial proceedings only, or otherwise limit coordination to avoid CAFA jurisdiction.  Nor did plaintiffs take an even easier route: filing separate complaints that each included fewer than 100 plaintiffs.

Plaintiffs also argued that a request that they filed in state court, to be part of Pennsylvania’s Mass Tort Program, showed that they were not seeking a joint trial.  But Judge Vanaskie found that contention unpersuasive as well.  The Mass Tort Program did not bar a joint trial, and the potential trial of multiple (though not all 113) cases together, which the Mass Tort Program allowed, was enough to defeat plaintiffs’ argument that their invocation of the Program showed that they were not seeking a joint trial.

Defendants use any available tactic to move class or mass actions from state court to federal court, where defendants feel that they have an advantage.  CAFA was designed to allow this sort of forum-shopping by defendants (ironically, in order to defeat what was perceived as forum-shopping by plaintiffs who preferred state court venue).  Today’s decision highlights the importance of foresight and care by plaintiffs’ counsel in structuring their pleadings and employing language that will enable them to defeat removal if their goal is to remain in state court.