Courts Find Removal Is Not Permitted Under CAFA Where Plaintiff Did Not Plead A Class Action Under Rule 23 Or Comparable State Rule

District Courts continue to shape the boundaries of CAFA jurisdiction in suits that are not pleaded as class actions.

For example, the District Court for the Eastern District of Louisiana held that defendants could not rely on the “real party in interest” inquiry articulated in the Supreme Court’s recent decision in Mississippi ex rel. Hood v. AU Optronics Corp., 134 S.Ct. 736 (2014) to create a class action where the State did not plead one.  The case arose from complaints made to Louisiana’s attorney general by residents who purchased memberships into Defendants’ points-based vacation club.  In response, the State filed a parens patriae action alleging violation of the Louisiana Unfair Trade Practices Act (“LUTPA”).  Defendants removed the action to federal court alleging jurisdiction under CAFA for actions brought under a statute or rule that imposes constraints similar to those of Federal Rule of Civil Procedure 23.  The court granted Louisiana’s motion to remand.

Citing Hood, the court first concluded that mass action jurisdiction did not exist because the State was the only named plaintiff.  Next, the court observed that Louisiana had not asserted a class action under Rule 23 or the similar state rules and held that the “real-party-in-interest” inquiry in Hood could not be used to create numerousity where plaintiff did not even propose a class.  The court remarked that since the State attorney general chose not to plead a class action, “it would be inappropriate to allow Defendants to alter that choice.”

Similarly, the District Court for the District of Columbia rejected defendants’ attempt to remove a suit filed by a non-profit organization acting as a private attorney general on behalf of the general public alleging violations of the D.C. Consumer Protections Procedures Act (“DCCPPA”).  The defendant argued that a public interest organization like plaintiff was only permitted to bring a DCCPPA action “on behalf of the interests of a consumer or class of consumers.”  The Court relied on its precedent in similar cases, Breakman v. AOL LLC, 545 F. Supp. 2d 96 (D.D.C.2008), and Zuckman v. Monster Beverage Corp., 958 F. Supp. 2d 293 (D.D.C. 2013), and held that removal was not permitted under CAFA because the plaintiff had not brought a “class action” under D.C. Superior Court Rule 23 and the DCCPPA private attorney general statute lacked the hallmarks of a Rule 23 class action.

Louisiana v. Zealandia Holding Co., Inc. et al, Case No. 13-6724 (E.D. La. Apr. 8, 2014)

National Consumers League v. Flowers Bakeries, LLC, Case No. 13-1725 (D.D.C. Apr. 8, 2014)

For a contrary result, see our recent blog on 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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