By Soham Desai on December 4, 2017
The 2005 Class Action Fairness Act created federal jurisdiction based on minimum diversity for certain class and mass actions in an effort to preclude artfully maneuvering to defeat diversity jurisdiction. Actions with at least 100 plaintiffs, minimal diversity between the parties, and an amount in controversy exceeding $5 million dollars may be removed to federal court. In response, plaintiffs’ attorneys began subdividing their cases into groups of less than 100 plaintiffs in order to avoid removal under CAFA.
CAFA also provides federal courts with original jurisdiction over “mass actions.” It defines a “mass action” as one in which 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.” In Corber v. Xanodyne Pharmaceuticals, the Ninth Circuit held that if, after filing separate lawsuits, plaintiffs requested that the state court consolidate the cases for all purposes, they are unified and removable. The Ninth Circuit also rejected the argument that a plaintiff must expressly request joint trial to allow removal under CAFA and held that a request for consolidation for “all purposes” was effectively a proposition for a joint trial.
Recently, however, in Dunson et al. v. Cordis Corp.,854 F.3d 551 (9th Cir. 2017), the Ninth Circuit undercut its en banc holding in Corber, and created a device to avoid federal jurisdiction under CAFA. In Dunson, eight multi-plaintiff suits were filed on behalf of more than 100 total plaintiffs alleging injuries from Cordis’ medical devices. Plaintiffs moved for consolidation of the actions “for all pretrial purposes, including discovery and other proceedings, and the institution of a bellwether-trial process,” citing facts and issues common to all cases and the need to “avoid the risk of inconsistent adjudications.” Cordis removed the cases to Federal Court as a CAFA “mass action.” However, the District Court remanded to state court on the ground that the request for a bellwether trial did not propose a joint trial of their claims.
The issue on appeal was whether plaintiffs’ request for a consolidated bellwether trial triggered the right to remove under CAFA. The Ninth Circuit held that removability depends on the nature of the bellwether trial sought by plaintiffs. If the parties in other cases agree to be bound by the outcome of the trial “at least as to common issues,” it would constitute as a joint trial allowing removal. However, if the results of the bellwether trial sought were merely illustrative and bound solely the parties involved in trial, it would not bind all defendants and plaintiffs and would not permit removal.
The Ninth Circuit further indulged a presumption in Dunson that when plaintiffs propose a bellwether trial, without saying more, “they mean a bellwether trial in which the results will not be binding on plaintiffs in the other cases but instead will be used for informational purposes only.” And it shrugged off plaintiffs’ expressed purpose to “avoid the risk of inconsistent adjudications” by saying that this could mean avoiding inconsistent rulings on dispositive motions or motions in limine.
Dunson creates a device to avoid CAFA removal. This undermines the Congressional intent to allow removal of “mass actions” where formal class certification is not sought. Cordis has petitioned for certiorari, asserting that by allowing plaintiffs to prevent removal by mere verbalisms in a bellwether trial process they propose, it eviscerates the policy of CAFA. Dunson also creates a circuit split, because the Third, Seventh, and Eighth Circuits have all held that a proposed bellwether trial process, in the context of mass action removal to federal court, is equivalent to a request for a joint trial triggering removal rights. If certiorari is granted, the Supreme Court can address this judicially created loophole that allows product liability plaintiffs to aggregate cases in state courts and undercuts the Congressional purposes underlying CAFA.