Removal Jurisdiction Over Mass Actions

Publication year2021


Mallory A. Gitt

Abstract : The mass action provision in the Class Action Fairness Act of 2005 provides a federal forum for certain state court litigation that resembles class actions but otherwise could not be removed. The provision is triggered when state court plaintiffs propose a joint trial of common legal or factual issues. But defining what constitutes that triggering event has proved difficult for federal courts. They have not used a uniform framework to determine when they have subject matter jurisdiction over the purported mass action, and have lacked a common interpretation of the statutory language to begin the inquiry. That lack of coherence has created confusion for litigants and potentially upset the balance of power between federal and state courts. This Comment proposes a uniform framework for federal courts to use in construing their subject matter jurisdiction in mass action cases.


Mass actions exist because Congress did not trust state courts to properly adjudicate aggregate litigation.(fn1) Mass actions were not a formal kind of litigation before Congress passed the Class Action Fairness Act of 2005(fn2) ("CAFA"), but were created to stanch the tide of abusive class action litigation-at least in Congress' view.(fn3) Legislation was necessary because, according to Congress, an out-of-control system of class action litigation had led to unfair results(fn4) and large payouts to greedy plaintiffs' attorneys.(fn5) State courts in particular kept "cases of national importance out of Federal court"(fn6) by applying their governing class action rules "inconsistently" and "inadequate[ly] supervis[ing]"(fn7) aggregate litigation. And stringent diversity jurisdiction rules further kept many defendants from removing such suits to federal court.(fn8) Through CAFA, Congress gave defendants a new avenue by which to federalize state court litigation. Defendants could now remove state litigation that merely resembled a class action.

A mass action is a different procedural device than a class action.(fn9) However, the mass action device aggregates litigation so that it generally operates the same way as a class action.(fn10) A mass action is formed when plaintiffs bring together-or, in the words of the statute, propose a joint trial of common issues of fact or law(fn11)-state court suits.(fn12) The joined suits must also meet CAFA's other jurisdictional requirements, including numerosity and amount in controversy.(fn13) When plaintiffs make a "proposal," the defendant may remove the suits as one consolidated suit to federal court.(fn14) It has been unclear, however, what is a proposal and how-if at all-federal courts should interpret the effects of the "proposal" the plaintiffs have made when the courts determine whether they have subject matter jurisdiction.(fn15)

Despite the contention that mass actions would be a rarely used procedure,(fn16) the mass action provision has become the subject of intense litigation.(fn17) As that litigation has wended its way through the courts, defining the contours of the mass action provision has been a challenging process. One court described the mass action provisions as "an opaque, baroque maze of interlocking cross-references that defy easy interpretation."(fn18) Another called the provisions a "Gordian knot."(fn19) Still another stated simply, "CAFA as a whole, and the mass action provision in particular, is confusing."(fn20)

For their part, litigants-both plaintiffs and defendants-are litigating to test the boundaries of federal court jurisdiction over mass actions. Plaintiffs have attempted to keep their suits in state court by structuring them to avoid CAFA's federal jurisdiction triggers.(fn21) Defendants have removed to federal court on novel theories. For example, they have argued that the number of real parties in interest meets the 100-plaintiff threshold that CAFA requires(fn22) and that a bellwether trial is in effect a "joint trial."(fn23) In 2013, the Supreme Court decided Standard Fire Insurance Co. v. Knowles ,(fn24) which demonstrates the gamesmanship CAFA in general has engendered. A class action plaintiff in state court stipulated that the putative class would not seek damages above $5 million.(fn25) In doing so, he sought to avoid CAFA's $5 million amount-in-controversy threshold.(fn26) The district court found that damages would have exceeded that amount but for the putative class member's stipulation, but that because damages were below the threshold, there could be no federal court jurisdiction over the action.(fn27) The Supreme Court disagreed, holding that a plaintiff could not stipulate to any limit on the amount of damages it would pursue when there was a putative class because there was no class yet that could be legally bound.(fn28) Thus, the contours of CAFA jurisdiction-including under the mass action provision-are still being worked out in the federal courts.

It is against this backdrop that this Comment takes up CAFA's less well-understood mass action provision. Litigants have zeroed in on what constitutes a proposal for a joint trial of common legal and factual issues in the last several years,(fn29) and thus when a federal court has jurisdiction over a mass action. But the questions raised by the mass action provision do not only concern procedural matters. The questions also implicate fundamental values in our judicial system: the boundaries of power between the state and federal courts;(fn30) the relationship between plaintiffs, who are the masters of their complaints;(fn31) and the rights of defendants, who may have a statutory right to have their cases heard in federal court.(fn32)

This Comment addresses two fundamental problems that have emerged when federal courts have construed their jurisdiction under CAFA's mass action provision: (1) that there is no coherent interpretation of what it means to propose that multiple cases "be tried jointly on the ground that the plaintiffs' claims involve common questions of law or fact,"(fn33) and (2) that there is no principled framework for analyzing subject matter jurisdiction in a mass action case. Because the federal courts have not been consistent, there have been real consequences for litigants, as well as for the balance of power between state and federal courts. Thus, this Comment proposes solutions to both of these problems. This Comment builds on existing case law to put forth a coherent definition for what constitutes a proposal for a joint trial-the part of the mass action provision subject to much debate.(fn34) It then proposes a framework for federal courts to determine their subject matter jurisdiction when faced with a purported mass action.

Parts I through III provide necessary background to the interpretive issues that have arisen in mass action cases in federal court. Part I briefly traces the history of class action adjudication, discussing the limits that the Supreme Court imposed on the device in the late 1990s.(fn35) Part II then addresses why litigation that merely resembled a class action became a political target and what Congress sought to achieve in passing CAFA. It particularly focuses on Congress' view of state courts in the run-up to CAFA's passage and why that led Congress to include mass actions in the statute. It also discusses at length CAFA's mass action provision.(fn36) Part III discusses underlying assumptions of federal court subject matter jurisdiction, including the federal courts' willingness to go beyond pleadings and investigate their jurisdiction,(fn37) using fraudulent joinder as an example. This Part provides useful context for understanding how some federal courts have deviated in the mass action context from their standard approach to construing subject matter jurisdiction.

Part IV reconciles the primary mass action decisions in the federal courts, concluding that the courts have developed two interpretive approaches: one that facilitates an expansive grant of federal court jurisdiction in mass action cases, and one that facilitates a narrow grant of jurisdiction. The approach that a court uses is important because it determines as a threshold matter whether a group of state court cases is a mass action and thus whether a federal forum is available to the litigants. This Part argues that neither approach is completely reconcilable with how federal courts interpret their diversity jurisdiction in other contexts, and argues that bringing coherence to this area of law would benefit both litigants and courts. It concludes by asserting that the Supreme Court's recent decision in Mississippi ex rel Hood v. AU Optronics Corp. ,(fn38) although it squarely addresses CAFA's mass action provision, does not much affect mass action litigation beyond parens patriae (fn39) suits.

Part V proposes a framework that the federal courts should employ in construing their subject matter jurisdiction in mass action cases. It argues that this framework is contemplated by CAFA itself, and, in any case, adheres to traditional principles in subject matter jurisdiction doctrine and affords due deference to state courts. It calls for federal courts-on their own motion if necessary-to require factual evidence of removal jurisdiction if the parties themselves do not provide it, and the evidence is not apparent from the face of the parties' pleadings that the federal court lacks jurisdiction. When assessing...

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