State Law Governed the Effective Date of the Filing of an Amended Complaint for Purposes of CAFA (Class Action Fairness Act of 2005) Illinois Federal Court Holds
In January 2004, plaintiff filed a lawsuit in Illinois state court against its cargo loss insurer for breach of contract, delay in paying insurance claim and fraud. On February 7, 2005, plaintiff requested leave of court to file an amended complaint to allege class action allegations and to represent three nationwide classes against the insurer; the motion was granted on February 18 – the same date that CAFA(Class Action Fairness Act of 2005) became effective. Buller Trucking Co. v. Owner Operator Independent Driver Risk Retention Group, Inc., 461 F.Supp.2d 768, 770-71 (S.D. Ill. 2006). On March 7, 2005, defense attorneys removed the class action to federal court. The district court remanded the class action to state court and defense attorneys petitioned the Seventh Circuit for leave to appeal. Id., at 771. The Circuit Court vacated the district court’s remand order and instructed the lower court to consider whether the filing of the amended complaint after CAFA became effective rendered the class action removable under CAFA. Id. The district court concluded that the effective date of the amended complaint pre-dated CAFA thus compelling remand to state court.
After summarizing CAFA and observing that CAFA does not apply retroactively to cases filed before its effective date, Buller Trucking, at 772, the district court explained that whether an amended complaint “recommences” a class action under state law for purposes of CAFA generally turns on “whether the amendment ‘relates back’ to the filing date of the original complaint: if it does, then the case is not removable, but if it does not, the case is subject to removal under CAFA.” Id. (quoting Knudsen v. Liberty Mut. Ins. Co., 411 F.3d 805, 807 (7th Cir. 2005)). In the Seventh Circuit, “a new claim for relief (a new ’cause of action’ in state practice), the addition of a new defendant, or any other step sufficiently distinct that courts would treat it as independent for limitations purposes, could well commence a new piece of litigation for federal purposes even if it bears an old docket number for state purposes.” Id. (quoting Knudsen, 411 F.3d at 807).
In concluding that the amended complaint did not recommence the class action for purposes of CAFA, the district court relied on the Seventh Circuit opinion in Schillinger v. Union Pacific Railroad Co., 425 F.3d 330 (7th Cir. 2005), which held that the inadvertent joinder of a new party-defendant did not constitute a post-CAFA commencement of the action. Buller Trucking, at 772-73. In essence, the Circuit Court concluded that “‘[t]his case should not come to federal court if the only ground for jurisdiction is a clerical error, however careless.'” Id., at 773 (quoting Schillinger, at 333).
The district court also found “important” an alternative basis for the Seventh Circuit’s decision in Schillinger – that under Illinois law “for purposes of a statute of limitations, an amended complaint is deemed filed at the time a request for leave to amend is filed,” id., at 773 (quoting Schillinger, at 334) (italics added). As the Circuit Court explained, “The logic underlying this practice is that defendants are on notice of the amendment when the motion is filed and it would be unfair to plaintiffs if a trial court waited months or years to rule.” Schillinger, at 334. But Schillinger expressly left open the “complex issue” of whether under CAFA federal law should be applied to deem the amendment filed on the date the amended complaint is accepted rather than the date the amendment is proffered. The district court tackled that issue and held that Illinois state law applied and the amended complaint should be deemed filed as of the date plaintiffs’ sought leave to amend. Id., at 775-78. Accordingly, the district court once again remanded the class action to Illinois state court. Id., at 781.
NOTE: The district court also concluded that federal court jurisdiction did not exist “under pre-CAFA law.” Buller Trucking, at 779-81.