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Class Action Defense Cases–Prime Care of Northeast Kansas v. Humana Insurance: Tenth Circuit Rules On Removal Of Class Action Under CAFA (Class Action Fairness Act)

CAFA (Class Action Fairness Act of 2005) Allows Removal of Suit Filed Prior to CAFA’s Effective Date by Defendant Added to Suit by Amendment After CAFA’s Effective Date Tenth Circuit Holds

On May 12, 2006, the Court of Appeals for the Tenth Circuit considered as a matter of first impression the question of “whether CAFA permits the removal of a class action filed before the Act’s effective date if the removing defendant was first added by amendment after the effective date.” Prime Care of Northeast Kansas, LLC v. Humana Ins. Co., 447 F.3d 1284, 1285 (10th Cir. 2006). The district court had concluded that CAFA did not apply in such cases and remanded the matter to state court. The Tenth Circuit reversed, vacating the district court’s remand order and remanding the action to federal court.

The Tenth Circuit recognized that courts that have considered post-CAFA amendments to the operative pleading have reached one of three competing conclusions. In brief, those courts “have held that such amendments either (1) do not affect the pre-CAFA commencement date of the case; (2) affect the commencement date only if they do not relate back; or (3) affect the commencement date if they do not relate back or if they add new defendants to the case.” Prime Care, at 1286. The Court “adopt[ed] the second position.” Id. Specifically, “whether a post-CAFA amendment triggers a substantive right to removal under CAFA by the affected parties depends on whether the amendment relates back to the pre-CAFA pleading that is being amended.” Id., at 1289

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