A Class Action By Any Other Name Is Still A Class Action And Subject To CAFA

The U.S. District Court for the Eastern District of Missouri denied a plaintiff’s motion to remand a collection against insurers brought on behalf of a certified class that had obtained a judgment in a separate action against a mobile home park operator. After obtaining the judgment, the class representative filed a separate “equitable garnishment action” against the park operator’s insurers under a Missouri statute that provides for collection of insurance by a judgment creditor.

The insurers removed the action to federal court. The plaintiff did not dispute numerosity, minimal diversity, or amount in controversy under the Class Action Fairness Act (CAFA). Instead, the plaintiff argued that the action should be remanded because it was not a “class action” but rather a collection action filed separately under Missouri statute that had nothing to do with class actions. Plaintiff also argued that 28 U.S.C. § 1332(d)(8) limits CAFA's removal jurisdiction to the action in which the class was certified.

The court cited CAFA’s legislative history and noted that in passing CAFA, Congress emphasized that the term “class action” should be liberally interpreted, that CAFA should not be applied solely to lawsuits that are labeled class actions, and that lawsuits that resemble a purported class action should be considered as such for purposes of CAFA. The fact that the plaintiff’s action did not cite to class action procedures or rules was irrelevant, the court determined, because the plaintiff sought to proceed on behalf of a certified class.

Williams v. Employers Mut. Cas. Co., Case No. 4:13-CV-2393 (E.D.Mo. April 8, 2014)

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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