Fifth Circuit holds that amending complaint constitutes "commencement" of new suit creating removal jurisdiction under CAFA.

• Author: Reeves, IV, Archibald T.
• Position: Class Action Fairness Act of 2005

In a case of first impression, the Fifth Circuit addressed the question of whether an amendment of a complaint adding a new defendant "commences" a new suit under the language of the Class Action Fairness Act of 2005 ("CAFA"), allowing removal pursuant to CAFA despite the fact that the lawsuit was actually filed before CAFA's effective date. Braud v. Transport Service Company of Illinois, 445 F.3d 801 (5th Cir. 2006). In reaching this conclusion, the Fifth Circuit reviewed the current state of the law addressing post-effective date amendments adding parties and held that, under the circumstances of the case before the court, the amendment at issue "commenced" a new action.

In Braud, the plaintiffs filed a class action, prior to the effective date of CAFA, against a transport company for damages resulting from a chemical spill. Then, after CAFA's effective date (February 18, 2005), plaintiffs amended the complaint to add Ineos Americas, LLC ("Ineos") as a defendant. Within thirty days of service of the complaint, Ineos removed the action to the federal court, stating that federal jurisdiction existed under CAFA. The district court remanded the case to state court, concluding that CAFA did not apply because the plaintiffs filed their original complaint before CAFA's effective date. The fact that Ineos was not added until after the effective date did not change that analysis.

On appeal, the Fifth Circuit noted that CAFA applies to actions "commenced on or after" the effective date of the Act and that state law governs when a lawsuit has been initially "commenced" for purposes of CAFA. The court explained that under Louisiana law, a suit is commenced "by the filing of a pleading presenting the demand to a court of competent jurisdiction." Braud, 455 F. 3d at 804. On that basis, the lawsuit at issue was commenced with the filing of the original complaint before CAFA's effective date.

However, the Fifth Circuit explained that this did not resolve the issue of whether an amendment to the complaint which adds a new defendant "commences" a new suit for purposes of CAFA. In an earlier opinion, the Seventh Circuit had acknowledged that post-CAFA amendments of a pre-CAFA complaint adding a new defendant could commence a new lawsuit for the purpose of CAFA. Knudsen v. Liberty Mutual Ins. Co., 411 F. 3d 805 (7th Cir. 2005). The Fifth Circuit followed the Seventh Circuit's reasoning and rejected the plaintiffs' arguments to the contrary.

The plaintiffs...