It is has been a rough few weeks for forum-shopping litigation tourists. We wrote the other day on the Missouri Supreme Court’s landmark opinion in State ex rel. Norfolk Southern Railway Co. v. Dolan, which held that Missouri’s courts do not have jurisdiction over out-of-state controversies involving out-of-state defendants. It has long been the practice of many plaintiffs’ lawyers to group hundreds of claims together in Missouri state court because they prefer that venue and for the sake of their own convenience. The Norfolk Southern Railway case should put an end to that.
Another bulwark against litigation tourism is the Class Action Fairness Act, which Congress enacted in 2005 to address abuses in aggregated litigation. Among other provisions, CAFA makes actions combining 100 or more plaintiffs removable to federal court as “mass actions.” We have written a lot on mass actions, including multiple posts on removing mass actions to federal court even when plaintiffs’ counsel try to break their claims into multiple actions of less than 100 plaintiffs. A not-too-old post on the topic is here, and you can link from there to numerous others. The gist is that transparent gamesmanship should not prevent federal courts from retaining jurisdiction over hundreds of plaintiffs bringing coordinated claims, even when plaintiffs’ lawyers go through their usual machinations to avoid it.
That is what happened in Portnoff v. Janssen Pharmaceuticals, No. 16-5955, 2017 WL 708745 (E.D. Pa. Feb. 22, 2017), and the district court’s order denying the plaintiff’s motion to remand is really interesting. First some background: Six plaintiffs’ law firms filed a “Petition to Consolidate and for Mass Tort Designation” in the Philadelphia Court of Common Pleas requesting consolidation of 87 pending pharmaceutical cases. They withdrew the petition about two weeks later and filed a second petition in its place. Id. at **2-3.
The number of cases and plaintiffs in the second petition are key. The petition identified 94 cases and well over 100 plaintiffs. But the six plaintiffs’ firms who filed the petition represented only 96 of the plaintiffs and had no authority to bind the others. However, once the 20-day deadline for other plaintiffs to object passed, those other plaintiffs became subject to the petition, thus boosting the numbers over 100. The defendants thereafter removed all the cases to federal court as a CAFA “mass action.” Id. **1-3. Pretty smart, if you ask us. But the plaintiffs did not think so, and they moved to remand on the basis that (1) the removal was untimely and (2) the cases were not a “mass action,” i.e., 100 or more plaintiffs whose claims “are proposed to be jointly tried.”
The district court rejected both arguments. First, the district court acknowledged that although removal statutes are generally strictly construed, “the presumption against removal does not apply to class actions invoking jurisdiction under [CAFA].” Id. at *2. We understand that the party invoking federal jurisdiction bears the burden of establishing jurisdiction, but we have never thought that a “presumption” against removal really exists. Either way, it is refreshing to have a district judge roundly reject any such presumption in a CAFA removal. As the court reasoned, “Congress enacted CAFA to facilitate class actions in federal court, and its provisions should be read broadly, with a strong preference that interstate class actions should be heard in federal court if properly removed by any defendant.” Id. (citations omitted).
As for timeliness, the plaintiffs submitted a legal assistant’s affidavit attesting that the second consolidation petition was merely a “refiled version” of the initial petition and thus was not a new case triggering a new clock for removal. Id. at *4. But the district court found the initial petition to be a legal nullity. And, the defendants could not have removed the case anyway until the deadline for other plaintiffs to object passed and it was apparent that the petition covered more than 100 plaintiffs. That is the event that made the cases removable.
This last point is the most interesting part of the order. In determining whether a paper provides “sufficient notice of removability,” the court applied an objective standard. In other words,
[T]he 30-day removal clock does not begin to run until litigation documents . . . reveal facts supporting removal . . . . Critically, though, . . . the triggering event focused solely upon the defendant’s receipt of a litigation document[;] that is, the scope of the defendant’s knowledge . . . plays no role in triggering the 30-day removal clock.
Id. at *4 (emphasis added, citations omitted). Or, put yet another way, “[T]he relevant test is not what the defendants’ purportedly knew, but what these documents said.” Id. at *5 (citations omitted).
But here is where it gets really good. In ascertaining whether a paper gives notice of removability, a defendant must apply a “reasonable amount of intelligence.” Id. at 6. We admit that we have never before seen the “reasonable amount of intelligence” standard. But now that it has come to our attention, we love it. We will apply it to other aspects of life. If the Cleveland Browns pay a king’s ransom for an untested and overrated quarterback, did they apply a “reasonable amount of intelligence”? If any governmental entity says it can balance its budget by increasing spending while simultaneously decreasing revenue, did it apply a “reasonable amount of intelligence”? If anyone orders gazpacho in a Chinese restaurant (or any other kind of restaurant), does that reflect a “reasonable amount of intelligence”?
Fine, these are loaded questions. But in Portnoff, a “reasonable amount of intelligence” foretold that no paper proposed consolidation of more than 100 pages until the deadline for other plaintiffs to object passed. Until that time, there were at most 96 plaintiffs, and the removal clock had not started.
Second, what about the fact that these were multiple separate civil actions? Were the plaintiffs’ claims “proposed to be jointly tried? Yes, they were. Whether claims are “proposed to be jointly tried” has been hotly contested (see our posts referenced above). But here, the plaintiffs’ consolidation petition “explicitly and plainly” proposed consolidation for pretrial and trial. Id. at *8. The plaintiffs tried to negate their request with an affidavit from the attorney who prepared the petition stating that she used a previously filed petition as a template and that the request for a consolidated trial was a “scrivener’s error.” Id. at *8. The plaintiffs also tried to file a post-removal “supplement” disclaiming any “intent to suggest that consolidation of trials occur.” Id.
We are sure the attorney “scrivener” did not enjoy drafting that affidavit, but the district court was unforgiving. The petition reinforced the request for consolidated resolution multiple times, and multiple plaintiffs’ attorneys reviewed and signed off on the petition. In the end, we cannot improve on the district court’s conclusion: “In short, a common sense reading of the entire Petition established that Plaintiff proposed a joint trial.” Id. at *9. Chalk one up for common sense and fairness—and intelligence.