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Class Action Defense Issues: Removal of Class Actions – 28 U.S.C. 1453

Defending Against Class Actions – Removal

In defending against class actions, it will often benefit a defendant to remove the case to federal court whenever possible. CAFA (Class Action Fairness Act of 2005) greatly expands removal jurisdiction of the federal courts pursuant to 28 U.S.C. § 1453. The removal procedure for non-class action cases is set forth in 28 U.S.C. § 1441. Various issues concerning CAFA, removal and remand are discussed in separate articles. For the convenience of the reader, we set forth the full text of Section 1453 below.

28 U.S.C. § 1453. Removal of Class Actions

(a) Definitions.–In this section, the terms “class”, “class action”, “class certification order”, and “class member” shall have the meanings given such terms under section 1332(d)(1).

(b) In general.–A class action may be removed to a district court of the United States in accordance with section 1446 (except that the 1-year limitation under section 1446(b) shall not apply), without regard to whether any defendant is a citizen of the State in which the action is brought, except that such action may be removed by any defendant without the consent of all defendants.

(c) Review of remand orders.–

(1) In general.–Section 1447 shall apply to any removal of a case under this section, except that notwithstanding section 1447(d), a court of appeals may accept an appeal from an order of a district court granting or denying a motion to remand a class action to the State court from which it was removed if application is made to the court of appeals not less than 7 days after entry of the order.

(2) Time period for judgment.–If the court of appeals accepts an appeal under paragraph (1), the court shall complete all action on such appeal, including rendering judgment, not later than 60 days after the date on which such appeal was filed, unless an extension is granted under paragraph (3).

(3) Extension of time period.–The court of appeals may grant an extension of the 60-day period described in paragraph (2) if–

(A) all parties to the proceeding agree to such extension, for any period of time; or

(B) such extension is for good cause shown and in the interests of justice, for a period not to exceed 10 days.

(4) Denial of appeal.–If a final judgment on the appeal under paragraph (1) is not issued before the end of the period described in paragraph (2), including any extension under paragraph (3), the appeal shall be denied.

(d) Exception.–This section shall not apply to any class action that solely involves–

(1) a claim concerning a covered security as defined under section 16(f) (3) of the Securities Act of 1933 (15 U.S.C. 78p(f)(3)) and section 28(f)(5)(E) of the Securities Exchange Act of 1934 (15 U.S.C. 78bb(f)(5)(E));

(2) a claim that relates to the internal affairs or governance of a corporation or other form of business enterprise and arises under or by virtue of the laws of the State in which such corporation or business enterprise is incorporated or organized; or

(3) a claim that relates to the rights, duties (including fiduciary duties), and obligations relating to or created by or pursuant to any security (as defined under section 2(a)(1) of the Securities Act of 1933 (15 U.S.C. 77b(a)(1)) and the regulations issued thereunder).