We read with great interest the Ninth Circuit’s recent opinion on CAFA “mass action” jurisdiction, Corber v. Xanodyne Pharmaceuticals, Inc., No. 13-56306, 2014 WL 6436154 (9th Cir. Nov. 18, 2014). If you have not read it yet, you should. We hesitate to call it a blockbuster, since we think the opinion’s reasoning is more narrow that it needed to be (more on that later). But the result (holding that CAFA removal was proper) is clearly correct, and the opinion hopefully will become a stalwart against one of the more brazen abuses that we see in pharmaceutical litigation – the disingenuous joining of hundreds of unrelated plaintiffs in multiple complaints in a single jurisdiction, but with each complaint numbering fewer than 100 plaintiffs in order to avoid CAFA removal.
It is a form of “litigation tourism”—the mass importation of plaintiffs into jurisdictions that have no interest whatsoever in adjudicating their claims—and we have always wondered why courts tolerate it. It has become a particular problem in California, whose underfunded courts are clogged as it is and whose taxpayers should not have to subsidize transient plaintiffs and the attorneys who represent them.
You won’t find this context in Corber, but trust us, it’s simmering there just beneath the surface. Corber was one of multiple complaints filed in California state court alleging injuries in connection with the prescription drug propoxyphene. The complaints together asserted the claims of hundreds of unrelated plaintiffs from all parts. But rather than file one complaint for each plaintiff (which would have subjected the vast majority to removal under standard diversity jurisdiction) or file one consolidated complaint (which clearly would have been removable as a mass action under CAFA), the plaintiffs’ attorneys divided their clients into multiple mass complaints, with each complaint including at least one non-diverse plaintiff to defeat complete diversity and each numbering fewer than 100 plaintiffs. To review, CAFA permits removal of “any civil action . . . in which monetary relief claims of 100 or more persons are proposed to be tried jointly on the ground that the plaintiffs’ claims involve common questions of law or fact.” 28 U.S.C. § 1332(d)(11)(B)(i). So 100 is the somewhat-magic number that plaintiffs are careful to stay beneath, which these plaintiffs’ lawyers scrupulously did.
Despite the plaintiffs’ machinations, the defendants removed the cases to federal court under CAFA on the basis that the cases together were a mass action. Corber, 2014 WL 6436154, at *2. We applaud that move, since it was transparent from the pleadings that these attorneys intended to pursue these cases together. To remove all doubt, they also filed a petition with the California Judicial Council requested that all the cases be coordinated before a single judge for all purposes, another signal that these actions, taken together, were a mass action subject to federal jurisdiction. Id.
The removals initially met with little success. The district court remanded Corber (and its related cases), and a three-judge panel of the Ninth Circuit affirmed. See Romo v. Teva Pharmaceuticals USA, Inc., 731 F.3d 918 (9th Cir. 2013). The court, however, granted a petition for rehearing en banc, resulting in the current opinion holding that “all the CAFA requirements for a removable mass action are met under the totality of the circumstances in these cases.” Corber, 2014 WL 6436154, at *1.
The issue on appeal, as stated by the en banc panel, was whether the plaintiffs’ petition for coordination before a single judge was a proposal for the cases “to be tried jointly” under CAFA. Id. at *2. The panel held that it was, based mainly on the language of the plaintiffs’ own coordination petition. In that petition, the plaintiffs sought coordination “for all purposes” without limitation, which “must include the purposes of trial.” Id. at *4. The court also emphasized that the plaintiffs had urged coordination because of issues “that would be addressed only through some form of joint trial, such as the danger of inconsistent judgments and conflicting determinations of liability.” Id. Under the totality of these circumstances, the actions constituted a mass action that the defendants had properly removed under CAFA.
We obviously like this result because it is a fair and just application of CAFA and because it is one step toward ending what one district judge who we know and admire called “permitted gamesmanship,” as opposed to prohibited conduct. See In re Avandia Marketing, Sales Practices and Prods. Liab. Litig., 2104 U.S. Dist. LEXIS 67675 (E.D. Pa. May 15, 2014). We respectfully disagreed with that conclusion, and apparently so does the Ninth Circuit. The Seventh Circuit weighed in on the defense side under similar circumstances in In re Abbott Laboratories, Inc., 698 F.3d 568 (7th Cir. 2012), which we commented on here.
If we have any beef with the Corber opinion, it is that the panel’s reasoning is too narrow. To begin with, the panel discounted the U.S. Supreme Court’s opinion in Standard Fire Insurance Co. v. Knowles, 133 S. Ct. 1345 (2013), where the Supreme Court held unanimously that a plaintiff’s stipulation that the amount in controversy was less than CAFA’s $5 million jurisdictional minimum did not defeat federal jurisdiction under CAFA. Corber, 2014 WL 6436154, at *3. We think the Knowles opinion is critically important because it held that plaintiffs’ attorneys cannot transparently game the system to avoid federal jurisdiction. That is what was going on in Corber, and we wish the Ninth Circuit had called it that way.
We also think the Ninth Circuit focused too narrowly on the language in the plaintiffs’ coordination petition. In California, coordination petitions request coordination for all purposes; it’s in the statute, Cal. Civ. Proc. Code § 404.1 (“for all purposes”). It is not like federal court, where multidistrict litigation under 28 U.S.C. § 1407 is for pretrial purposes only. Thus, we would have followed the Knowles “actions speak louder than words” approach and held that the plaintiffs’ petition for coordination was per se a plaintiffs’ proposal that the cases be tried jointly.
In this vein, the Ninth Circuit panel suggested hypothetically (i.e., the panel “could envision”) that the plaintiffs might have limited their petition to request coordination for pretrial purposes only, which would make it “difficult to suggest that Plaintiffs had proposed a joint trial.” Id. at *4. Some commentators have seized on this to suggest that the Ninth Circuit has provided a “roadmap” for plaintiffs who will continue their attempts to evade federal jurisdiction.
We are not so sure. For one thing, the Ninth Circuit itself admitted that “it is not clear whether the California Judicial Council would grant coordination for less than all purposes.” Id. We share the court’s skepticism and believe it more likely that issues regarding trial—including whether, when, and how to try the cases—would be left to the coordination trial judge. (Whether any defendant would actually acquiesce or agree to a “joint trial” in the form of multiple claims being presented simultaneously to one jury is another issue altogether. As one judge observed in dissenting from the initial Ninth Circuit opinion affirming the remand, “‘joint trial’ does not mean everyone sitting in the courtroom at the same time.” Romo, 731 F.3d at 927 n.4.)
Moreover, the Ninth Circuit rejects, in the very next breath, the plaintiffs’ argument that a petition must expressly request a “joint trial” to satisfy CAFA because such a rule “would ignore the real substance of Plaintiffs’ petition.” Id. at *5. We agree that the “real substance” should control, which means that a boilerplate request for only “pretrial” coordination has no more meaning that the bogus “stipulation” in Knowles to an amount in controversy less than $5 million. Finally, by focusing so heavily on the language of the coordination petition, the Ninth Circuit overlooked that there are other ways in which plaintiffs can, through their actions, request that their claims be “tried jointly” within the meaning of CAFA. What about the complaints themselves? Each case included dozens of plaintiffs combined under one caption, and if that is not a request for joint proceedings, we are not sure what is. It should make no difference that the plaintiffs’ lawyers stopped their word processors and started a new caption when the plaintiff tally in each case reached some number less than 100.
What if the plaintiffs had filed their mass complaints all in the same state court, say Los Angeles County? In that case, they would not need a coordination petition; the local rules would assign the related cases to a single judge without intervention from the Judicial Council. That’s a mass action. What if hundreds of plaintiffs filed their mass complaints, Corber style, with the full knowledge that those complaints would be transferred to a coordination proceeding that was already underway? That’s a mass action.
Corber could be a large step in limiting the litigation tourism that has vexed the drug and device practice for some time now. Another positive step is the Supreme Court’s Bauman opinion on general personal jurisdiction, which makes it all the more difficult to haul an unwilling defendant into a jurisdiction in which it is not at home. As we reported here and here, Bauman has likewise made it more difficult to defeat removal jurisdiction, as a non-diverse defendant over which the court has no personal jurisdiction is either dismissed or considered fraudulently joined. Either way, that defendant’s non-diverse citizenship is disregarded and thus cannot defeat complete diversity. Let’s hope that developments like these cause the mass-complaint strategy to collapse on itself. That would be a good thing.