Trial Practice and Procedure - John O'shea Sullivan and Ashby L. Kent

• Publication year: 2007

Trial Practice and Procedureby John O'Shea Sullivan^* and Ashby L. Kent^**

I. Introduction

The 2006 survey period yielded several noteworthy decisions in the Eleventh Circuit Court of Appeals relating to federal trial practice and procedure, many of which involved issues of first impression. This Article analyzes several recent developments in the Eleventh Circuit, including significant rulings in the areas of class actions, subject matter jurisdiction, statutory interpretation, judicial estoppel, civil procedure, and other issues of interest to the trial practitioner.

II. Class Action Practice Under the Class Action Fairness Act of 2005 ("CAFA")¹

A. Determining Which Party Should Bear the Burden of Proof in Establishing CAFA's "Local Controversy" Exception to Federal Subject Matter Jurisdiction

In Evans v. Walter Industries, Inc.,² the Eleventh Circuit held, as a matter of first impression in all circuits, that the party seeking remand bears the burden of proof if it seeks to avail itself of any express statutory exception to federal jurisdiction, such as the "local controversy" exception, granted under CAFA.³ The court further concluded that the sixty-day period within which the court must complete all action on an appeal, including rendering judgment, begins to run on the date when the appellate court grants the appellant's application to appeal, not the date on which the application for appeal was filed.⁴

The plaintiffs filed this putative class action in Alabama state court, asserting property damage and personal injury claims against numerous defendants who operated manufacturing facilities in Anniston, Alabama. The plaintiffs attributed their alleged injuries to the defendants' release of various waste substances over an approximately eighty-five-year period.⁵ After certain defendants removed the case under CAFA, the plaintiffs moved to remand, arguing that the case fell within CAFA's "local controversy" exception to federal jurisdiction because more than two-thirds of the plaintiff class were Alabama citizens, and at least one Alabama defendant was a "significant" defendant within the meaning of CAFA.⁶ The United States District Court for the Northern District of Alabama agreed and remanded the case to state court. The removing defendants appealed.⁷

Before reaching the merits of the appeal, the court first had to interpret CAFA's sixty-day rule governing the review of remand orders to determine when its ruling on the appeal would be due.⁸ If the circuit court accepts an appeal, CAFA requires the court to complete all action on the appeal, including rendering judgment, within sixty days from the date "'on which such appeal was filed.'"⁹ The court concluded that an appeal should be deemed "filed," and the sixty-day period should thus begin to run, on the date the court grants the application to appeal, noting that CAFA provides for an "application," rather than a "notice" of appeal.¹⁰ The court also noted the language in 28 U.S.C. Sec. 1453(c)- (2), which indicated that the sixty-day period should begin after the "appeal was filed," not after the "application" was filed.¹¹ The court further concluded that Federal Rule of Appellate Procedure 5,¹² which governs discretionary appeals, could apply to requests for appeals under CAFA and provides that "[t]he date when the order granting permission to appeal is entered serves as the date of the notice of appeal for [purposes of] calculating time . . . ."¹³ Accordingly, the court held that the sixty-day period begins to run from "the date that the court of appeals accepts the appeal, and thus file[d] the appeal."¹⁴

Having determined its deadline under CAFA's sixty-day rule,¹⁵ the court then addressed whether the case fell within CAFA's "local controversy" exception to federal subject matter jurisdiction.¹⁶ Because CAFA's language and structure contemplated broad federal jurisdiction over class actions, the court emphasized that statutory exceptions should be construed narrowly so as not to create "jurisdictional loophole[s]."¹⁷ Determining that "[n]o other Circuit appears to have addressed the specific question of which party should bear the burden of proof on CAFA's local controversy exception," the court addressed "as a question of first impression the issue of who bears the burden of proving the local controversy exception, once the removing defendants have proved the amount in controversy and the minimal diversity requirement, and thus have established federal court jurisdiction under Sec. 1332(d)(2)."¹⁸ The court noted that CAFA did "not change the traditional rule that the party seeking to remove the case bears the burden of establishing federal jurisdiction,"¹⁹ but it affirmed the district court's finding that the plaintiffs, who sought remand under CAFA's local controversy exception, should bear the burden of proving that the case falls within this narrow exception.²⁰

In the absence of any precedent in the CAFA context, the Eleventh Circuit looked to its prior holdings that addressed the removal of actions involving the Federal Deposit Insurance Corporation ("FDIC").²¹ In those instances, the court held that once the FDIC met the statutory prerequisites for removal, the burden of establishing the statutory "state action" exception to federal jurisdiction shifted to the party objecting to removal.²² Comparing CAFA's "local controversy" exception to the statutory framework at issue in the FDIC cases, the court held that the plaintiffs, as the parties objecting to removal after the prerequisites for removal jurisdiction under CAFA had been met, bore the burden of proving that their case fell within the local controversy exception.²³

B. Removing Defendant Bears Burden ofEstablishing Federal Subject Matter Jurisdiction Under CAFA

In Miedema v. Maytag Corp.,²⁴ the Eleventh Circuit affirmed the decision of the United States District Court for the Southern District of Florida, which had "not[ed] the existence of disagreement among courts as to which party bears the burden of establishing subject matter jurisdiction under CAFA," but "adhered to the traditional rule in the CAFA context that a removing defendant bears the burden of establishing subject matter jurisdiction."²⁵ The court further concluded that CAFA did not change federal courts' long-standing practice of construing removal statutes strictly and resolving all doubts in favor of remand.²⁶

The plaintiff, Leslie Miedema, filed suit against Maytag Corporation ("Maytag") in Florida state court on behalf of herself and a putative class of "'[a]ll purchasers of Maytag ranges/ovens, in the State of Florida, bearing [certain model numbers].'"²⁷ Miedema alleged that various ranges and ovens designed and manufactured by Maytag contained a defective door latch assembly that allowed heat to escape and damage other range and oven components.²⁸ Maytag removed the case to the United States District Court for the Southern District of Florida under CAFA, alleging that Miedema and Maytag were of diverse citizenship and the putative class consisted of thousands of Floridians, making the amount in controversy exceed $5 million.²⁹ Miedema moved to remand, arguing that Maytag had the burden of establishing subject matter jurisdiction by a preponderance of the evidence and that Maytag had failed to do so with respect to the amount in controversy.³⁰

"[N]oting the existence of disagreement among courts as to which party bears the burden of establishing subject matter jurisdiction under CAFA," the district court ordered additional briefing on this issue to help determine whether the amount in controversy requirement had been satisfied.³¹ After receiving the additional submissions, the district court "adhered to the traditional rule in the CAFA context that a removing defendant bears the burden of establishing subject matter jurisdiction."³² Acknowledging that the breadth of Miedema's complaint contributed to the uncertainty surrounding the amount in controversy, the district court nonetheless held that Maytag had not met its burden and that it was required to resolve all doubts in favor of remand. Maytag petitioned for permission to appeal the remand order pursuant to 28 U.S.C. Sec. 1453(c).³³

Before addressing the merits of Maytag's appeal, the Eleventh Circuit recalled its holding in Evans v. Walter Industries, Inc.³⁴ regarding the timeliness of Maytag's application for appeal under CAFA.³⁵ The court noted that CAFA permits a court of appeals to accept an application to appeal if the application is made to the appellate court "'not less than 7 days after entry of the [district court's] order' granting or denying a motion to remand."³⁶ Acknowledging that it had not directly addressed CAFA's seven-day application rule, the Eleventh Circuit noted that several circuits had declined to read the "not less than" language literally, finding it to be a typographical error or that a literal reading would produce an absurd result.³⁷ Reaffirming the construction of Sec. 1453(c)(1) that it had taken in Evans,³⁸ the court held that Maytag's application for appeal was timely because it was made within seven days of the district court's remand order.³⁹

Turning to the merits of Maytag's appeal, the court rejected Maytag's claim that the district court erred by applying the traditional rule that the removing defendant bears the burden of establishing subject matter jurisdiction in the CAFA context.⁴⁰ Although Maytag conceded that CAFA's text does not address which party has the burden of proof in establishing federal jurisdiction, Maytag argued that CAFA's legislative history "expresses a clear intent to require that an objecting plaintiff demonstrate removal was improvident, i.e., that all applicable jurisdic-tional requirements were not met."⁴¹ Maytag argued that the district court should have placed the burden on Miedema to prove that subject matter jurisdiction was lacking.⁴² Maytag pointed to a Senate Committee report which...