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CAFA Class Action Defense Cases–Tanoh v. Dow Chemical: Ninth Circuit Holds State Lawsuits With Less Than 100 People Not Removable Under Class Action Fairness Act (CAFA) Because Total Number Of Plaintiffs Cannot Be Combined

Class Action Fairness Act (CAFA), which Authorizes Removal of Class Actions and Treats Certain “Mass Actions” as Class Actions for Purposes of Removal, does not Allow Defendant to Combine Plaintiffs from Separate State Court Lawsuits in Order to Satisfy Numerosity Requirement for Removal Ninth Circuit Holds

Seven lawsuits were filed in California state court by 664 plaintiffs against Dow Chemical and others alleging that they were exposed to a Dow chemical product “while working on banana and pineapple plantations” in villages on the Ivory Coast; the lawsuits alleged the chemical exposure caused “a host of serious and permanent injuries…, including sterility and infertility.” Tanoh v. Dow Chemical Co., 561 F.3d 945, 950-51 (9thh Cir. 2009). Each of the lawsuits named fewer than 100 plaintiffs, id., at 951. Dow removed the lawsuits to federal court on the grounds of federal diversity, claiming that the California defendants “had been fraudulently joined to defeat removal to federal court,” and federal jurisdiction under the Class Action Fairness Act (CAFA). Id. CAFA provides for removal not only of class actions but also of “mass actions,” defined as civil lawsuits seeking monetary relief on behalf of 100 or more people. See 28 U.S.C. § 1332(d)(11)(B)(i). CAFA specifically provides that a mass action does not include “any civil action in which … (II) the claims are joined upon motion of a defendant; … or (IV) the claims have been consolidated or coordinated solely for pretrial proceedings.” Tanoh, at 951 (quoting 28 U.S.C. § 1332(d)(11)(B)(ii)). The district court remanded the lawsuits to state court sua sponte, “holding that defendants had failed to show that the California companies were fraudulently joined and that removal under CAFA was not proper because each of the actions involved fewer than the one hundred plaintiff statutory minimum for a ‘mass action’ under CAFA.” Id. In so holding, the federal court rejected defense arguments that plaintiffs “had ‘strategically sought to avoid federal jurisdiction’ by filing several separate state court actions in groups fewer than one hundred” because “CAFA specifically excludes actions in which claims have been ‘joined upon motion of a defendant’ from the definition of a ‘mass action,’” id. The Ninth Circuit reversed on the grounds that the lower court “exceeded its authority by ordering a remand sua sponte.” Id. On remand, plaintiffs’ moved for remand and the district court granted the motion on the same grounds as before, id. Dow again sought and received leave to appeal, id., at 952, and the Ninth Circuit consolidated all seven appeals sua sponte, id., at 952 n.3. The Ninth Circuit then affirmed.

The Ninth Circuit concisely defined the issue and summarized its holding at page 950 as follows: “We are asked to decide whether seven individual state court actions, each with fewer than one hundred plaintiffs, should be treated as one ‘mass action’ eligible for removal to federal court under the Class Action Fairness Act of 2005…. CAFA extends federal removal jurisdiction only to civil actions ‘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). As neither the parties nor the trial court has proposed jointly trying the claims of one hundred or more plaintiffs in this case, we affirm the district court’s order remanding each of the seven individual actions to state court.” The Circuit Court recognized that, “Although plaintiffs in a mass action, unlike in a class action, do not seek to represent the interests of parties not before the court, CAFA provides that a qualifying mass action ‘shall be deemed to be a class action’ removable to federal court under the Act, so long as the rest of CAFA’s jurisdictional requirements are met.” Tanoh, at 952. But while CAFA “extends federal diversity jurisdiction to both class actions and certain mass actions, the latter provision is fairly narrow,” id., at 953; specifically, the civil action must involve monetary relief on behalf of at least 100 people, 28 U.S.C. § 1332(d)(11)(B)(i). The Ninth Circuit held at page 953, “By its plain terms, § 1332(d)(11) therefore does not apply to plaintiffs’ claims in this case, as none of the seven state court actions involves the claims of one hundred or more plaintiffs, and neither the parties nor the trial court has proposed consolidating the actions for trial.”

Finally, the Circuit Court rejected Dow’s argument that the removals fell within the scope of CAFA because plaintiffs had sought to “game” the system by filing suit covering 664 people in seven separate actions rather than a single action. See Tanoh, at 953-57. Accordingly, it affirmed the district court order remanding the lawsuits to state court. Id., at 957.

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