Corporate clients defending class action lawsuits in state courts within the Eighth Circuit should take note of the recent decision Atwell v. Bos. Scientific Corp., 740 F.3d 1160 (8th Cir., 2013). One portion of the Class Action Fairness Act of 2005 allows for removal of “mass actions” from state court to federal court, often thought to be a more favorable venue for defendants in many instances.

“Mass action” is defined by CAFA as “any civil action . . . 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.”  28 U.S.C. § 1332(d)(11)(B)(i).  The key issue in Atwell was what it means for these claims to be “tried jointly.”  Federal jurisdiction does not exist where “the claims have been consolidated or coordinated solely for pretrial proceedings.”  28 U.S.C. § 1332(d)(11)(B)(ii)(IV) (emphasis added).

As clients who routinely deal with these claims are aware, class actions frequently can be coordinated or consolidated to avoid inconsistency of rulings as between the plaintiffs’ claims.  This can result in an exemplar or bellwether trial, which can have lasting effects for future litigants, resulting in decisions that may bind future courts under doctrines of collateral estoppel and res judicata.  This raises the stakes and underscores the importance of venue.

In Atwell, three groups of plaintiffs—each group under 100 and thus not by itself removable under CAFA—asked the Circuit Court for St. Louis City to coordinate their cases to avoid inconsistent rulings and to promote judicial economy, invoking several local rules on that subject.  Once these plaintiffs had sought coordination of their actions for these purposes, Boston Scientific—one of the defendants in these transvaginal mesh cases—removed the matters collectively to federal court under the theory that they had been converted to a single mass action.

The plaintiffs ostensibly sought only to “coordinate” their cases to avoid inconsistent rulings but not to “consolidate” them for purposes of trial.  Presumably, their counsel believed federal jurisdiction would not exist in that instance, either because this coordination was “solely for pretrial proceedings” (28 U.S.C. § 1332(d)(11)(B)(ii)(IV)) or because they then would not be “tried jointly.” (28 U.S.C. § 1332(d)(11)(B)(i)).

The Eighth Circuit examined not only the motions these plaintiffs filed to coordinate their cases to avoid inconsistent rulings, it also examined statements of plaintiffs’ counsel at the hearing on the matter.  One counsel stated: “We specifically said we don’t want these cases consolidated. . . . We’re simply asking for your Honor to assign one single judge to handle all these cases for consistency of rulings, judicial economy, administration of justice.”  However, another used a term that the Eighth Circuit seized upon: “You’ll understand . . . we’ve got multiple plaintiffs.  There’s going to be a process in which we select a bellwether case to try.”

Reviewing a circuit split on the subject, the Eighth Circuit sided squarely with the Seventh Circuit and held that coordination or consolidation of matters for a bellwether trial qualified as claims being “tried jointly” such that federal jurisdiction existed.  The Ninth Circuit, by contrast, had recently found that groups of plaintiffs seeking coordination but not consolidation  had not necessarily sought to have their matters “tried jointly.”  The Eighth Circuit instead joined the Seventh Circuit in holding this as essentially a distinction without a difference where the inevitable consequence of seeking consistent judicial rulings is a bellwether or exemplar trial.  The Court’s ruling in Atwell makes clear it placed great reliance on plaintiffs’ counsel’s admission that the ultimate goal was to conduct a bellwether trial.

On the subject of bellwether trials, Atwell and the Seventh Circuit cases were explicit that limiting the “mass action” removal provision to instances where the requisite 100 claims were all to be tried together (as opposed to in an exemplar or bellwether trial) would render the provision “defunct.”

As a result, clients defending class actions in state courts within the Eighth Circuit should discuss with counsel the potential that their matters may be—or may become—removable to federal court in circumstances such as Atwell.

For additional information, please contact Matt Diehr or Joe Orlet.