Trial Practice and Procedure

• Publication year: 2021

Trial Practice and Procedure

John O'Shea Sullivan

Kevin R. Stone

[Page 1239]

Trial Practice and Procedure

by John O'Shea Sullivan^*

and Kevin R. Stone^**

I. Introduction

The 2020 survey period yielded noteworthy decisions relating to federal trial practice and procedure in the United States Court of Appeals for the Eleventh Circuit, several of which involved issues of first impression.¹ This Article analyzes recent developments in the Eleventh Circuit, including significant rulings in the areas of statutory interpretation, subject matter jurisdiction, civil procedure, class actions, and other issues of interest to the trial practitioner.

II. Statutory Interpretation and Removal

A. New Parties Added to Civil Actions Are Not "Defendants" and Are Ineligible to Remove Under 28 U.S.C. § 1441

In Bowling v. U.S. Bank National Assoc.,² the Eleventh Circuit reversed the United States District Court for the Northern District of Alabama's denial of a motion to remand a case after removal of the case by parties who were not originally sued by the plaintiff, but had been added to the litigation by the original defendant as "Third-Party

[Page 1240]

Counterclaim Defendants."³ The court admitted the case did not involve a "riveting topic."⁴ However, a Supreme Court of the United States' opinion,⁵ published after the district court's denial of the motion to remand, changed the law and abrogated case law decided in the former Fifth Circuit that was binding in the Eleventh Circuit,⁶ which had stood as the law for more than forty years.⁷

The litigation started in state court in Alabama where a purchaser of real property in a foreclosure sale sued the occupants and mortgagers, the Bowlings, for ejectment. The Bowlings filed their "Answer and Counterclaim" which added three new parties as Third-Party Counterclaim Defendants, the lender and servicers on the foreclosed loan. The Bowlings' claims against the Third-Party Counterclaim Defendants included a mix of state and federal law claims, including claims for alleged violations of the federal Truth in Lending Act, the Fair Credit Reporting Act, and others. The Third-Party Counterclaim Defendants removed the entire case to federal court, citing 28 U.S.C. §§ 1441(a) and 1441(c) as grounds.⁸

The Bowlings moved to remand the case to state court, however, under the former Fifth Circuit's decision in Carl Heck Engineers, Inc. v. Lafourche Parish Police Jury (Carl Heck),⁹ and 28 U.S.C. § 1441(c),¹⁰ the district court denied the motion, finding removal was proper.¹¹ On appeal, the Eleventh Circuit carefully analyzed Carl Heck.¹² In Carl Heck, the district court refused to remand a case removed by a third-party defendant and the former Fifth Circuit affirmed, finding that the third-party claim was a "separate and independent claim which if sued upon alone could have been brought properly in federal court."¹³ The Eleventh Circuit stated that it was understandable that in 2014 the district court, in Bowling, concluded that the Third-Party Counterclaim

[Page 1241]

Defendants' claims were removable under 28 U.S.C. § 1441(c) in light of the decision in Carl Heck.¹⁴

By the time Bowling made it to the Eleventh Circuit on appeal, the law on removal had changed substantially. In what the Eleventh Circuit called a "removal game-changer,"¹⁵ the Supreme Court decided Home Depot U.S.A, Inc. v. Jackson.¹⁶ Home Depot, decided in 2019, abrogated the holding in Carl Heck and held that the removal statute does not permit removal by any counterclaim defendant, including parties brought into the lawsuit for the first time by counterclaim.¹⁷

As it did with Carl Heck, the Eleventh Circuit carefully analyzed Home Depot and the current text of 28 U.S.C. §§ 1441(a) and (c).¹⁸ Discussing six things that led to the high Court's holding in Home Depot, the Eleventh Circuit concluded that the law on removal is now that "'a third-party counterclaim defendant is not a 'defendant' who can remove under § 1441(a).'"¹⁹ But because the case at bar involved § 1441(a), and not § 1441(c), the Eleventh Circuit still needed to determine whether the principles announced in Home Depot applied to the situation involving removal of federal and state law claims under § 1441(c).²⁰

The court held that "[e]very analytical tool the Supreme Court relied on in Home Depot to conclude that counterclaim defendants may not remove a civil action under § 1441(a) applies with equal force to § 1441(c)."²¹ The court looked to the definition of "defendants" as used in § 1441(a) and § 1441(c) to find that "'identical words and phrases used in the same statute should normally be given the same meaning.'"²² Having found that "defendants" in § 1441(a) means the original defendants to the action, not later-added parties, the court held that § 1441(c)'s use of "defendants" has the same meaning to allow § 1441(c) to provide additional criteria for a certain subset of civil actions.²³ The court

[Page 1242]

concluded by declaring that Carl Heck is "no longer good law," and after Home Depot, third-party counterclaim defendants and other parties not originally sued by the plaintiff cannot remove a "civil action" under 28 U.S.C. § 1441(c).²⁴

B. Interpretation of "Mass Action" Jurisdiction Statutes

In Spencer v. Specialty Foundry Products Inc.,²⁵ a products liability case, the Eleventh Circuit engaged in a grueling exercise of statutory interpretation to assess whether a complaint adequately alleged an "event or occurrence" so as to fall within the "local event" exception to removal under the Class Action Fairness Act of 2005 (CAFA) and ultimately held that the exception did not apply.²⁶

In Spencer, former workers at a foundry in Alabama claimed they were harmed by exposure to hazardous and harmful chemicals released and formed at the foundry. They filed suit in Alabama state court against ten entities that manufactured, sold, supplied, and distributed the products they believed harmed them. One defendant removed the case to federal court under CAFA's "mass action" provision, which authorizes original federal jurisdiction over actions seeking more than $5 million in monetary relief with more than 100 minimally diverse plaintiffs whose claims involve common questions of law or fact.²⁷ The Plaintiffs moved to remand the case to state court, citing two reasons, only one of which was at issue on appeal.²⁸ Specifically, they contended that the case did not qualify as a "mass action" under CAFA because "all of the claims arise from an event or occurrence in the State in which the action was filed,"

[Page 1243]

and this event or occurrence "allegedly resulted in injuries in that State."²⁹ In other words, "mass actions" are removable, but not if "all of the claims in the action arise from an event or occurrence in the State in which the action was filed, and that allegedly resulted in injuries in that State or in States contiguous to that State."³⁰ "This carve-out to federal jurisdiction is called the 'local event exception.'"³¹

The district court remanded to state court, finding that, "because the foundry was located in Alabama, the plaintiffs worked in Alabama, the alleged injuries occurred in Alabama, and the sole purchaser of the defendants' products was the foundry, this case is 'truly local' such that CAFA jurisdiction would be improper under the local event exception."³² The focus of the appeal was the local event exception, specifically the phrase an "event or occurrence."³³ "If the allegations in the complaint constitute[d] 'an event or occurrence,' the [d]istrict [c]ourt was correct in remanding the case back to state court."³⁴ If, however, the allegations were not an event or occurrence, then removal was proper and remand was improper.³⁵ The Eleventh Circuit reversed, holding that the exception did not apply, and the federal court had CAFA jurisdiction.³⁶

Not surprisingly, the parties disagreed as to the scope of the term, "an event or occurrence" and offered their preferred meanings of the phrase.³⁷ The Eleventh Circuit disagreed with the parties' respective definitions and arrived at its own meaning of "an event or occurrence."³⁸ The court started with the axiom that it must look to the plain language of the text of the statute and because the statute does not define the term "an event or occurrence," the court looked to dictionaries for guidance to interpret the statute's "words in accordance with their plain and ordinary meaning."³⁹ Dictionaries define "event" and "occurrence" essentially the

[Page 1244]

same.⁴⁰ Moreover, the court concluded that the phrase "is broad enough to include a solitary happening that occurs in a single moment in time and (in some cases at least) a continuing set of related circumstances."⁴¹

With that broad definition of the two main words in hand, the court then discussed the meaning of the word "an" preceding the term "event or occurrence."⁴² The court concluded that, although the use of "an" implies one series of connected circumstances, "it would be a misreading of the statute to restrict the local event exception to events or occurrences that are concentrated in a single point in time."⁴³ A salient example of this, explained the court, is the World Series—it is "an event" that encompasses many different occurrences (games, pitches, strikeouts) over a long, but set, period of time, with the same teams playing.⁴⁴ With those definitions and examples, the court concluded that the text was clear, so the district court erred by resorting to analysis of the legislative history.⁴⁵

After analyzing interpretations of the statute by the Third,⁴⁶ Fifth,⁴⁷ and Ninth Circuits,⁴⁸ the Eleventh Circuit ultimately held that "the local event exception applies to a singular harm-causing moment in time, as well as a contextually connected series of incidents that culminates in that harm-causing event or occurrence."⁴⁹ From there, the court explained that the allegations in the complaint did not fall within the local event exception...