The Class Action Fairness Act of 2005 and its removal provisions
Overview
As I noted in A second, more detailed look at the new class action law, the Class Action Fairness Act of 2005 technically changes only one aspect of federal subject matter jurisdiction--diversity jurisdiction. I began my analysis of the Act by talking about the possible chilling effect of the combination of the Act's removal provisions and its automatic conversion of some non-class actions to class actions. This post will examine the removal issues in detail.
Removal reprise
Once again, here is a brief description of removal...
28 U.S.C. § 1441(a) allows for cases originally filed in state court to be transferred to federal court through a process known as "removal."
Once a defendant starts the procedure for removal (see 28 U.S.C. § 1446 for the procedure), there is almost nothing a plaintiff can do to keep the case from going to federal court. Once the case is in federal court, the plaintiff can seek to have the cse sent back to state court through a motion for remand (see 28 U.S.C. § 1447).
The removal provisions of the Class Action Fairness Act of 2005
Subsection (c) has four parts. The first part reads as follows:
That has now changed for class actions. To some degree federal district courts will now be required to hear cases which they were not required to hear before, and now the federal courts of appeal will also be required to hear cases that up until now they did have to address. All this means--once again--that the Class Action Fairness Act of 2005 will increase litigation in the federal courts.
Some might say that I am incorrect because the new provision clearly says that a court of appeals may, rather than must, accept an appeal concerning the grant or denial of a remand order. That is what we call in the lawyer business a distinction without a difference. The only way the court of appeals can decline to hear such an appeal is to make a ruling to that effect, and that can happen only if an appeal is filed. That means that the court of appeals will have to consider the case.
The second part of subsection (c) establishes the following timetable:
The third part of § 1453(c) provides a way by which the 60-day deadline can be extended:
The fourth part of § 1453(c) is very interesting.
All in all, the appeal provisions of § 1453(c) are going to do nothing but increase litigation in the federal courts in the foreseeable future, and that will negatively impact federal courts' ability to deal with their dockets and get their business done. Furthermore, § 1453(c) leaves many procedural questions unanswered, and until those questions are resolved, business in both the district courts and the courts of appeal are going is going to get bogged down.
And one more thing...The appeal contemplated by § 1453(c) is what is known as an interlocutory appeal. For purposes of this discussion, that means that any action taken by the court of appeals will not result in dismissal of the case. The case will continue. During the appeal, the rest of the case will simply be put on hold (this is an assumption on my part, for the Act does not say anything one way or the other), which adds further delay to the case. One reason this is significant is that while § 1453(c)(3) establishes a 60-day deadline, that time period starts when the appeal is accepted, not from the day the order for remand is granted or denied. This means that as of now, there is no prescribed time in which the court of appeals has to decide whether to accept the appeal.
Conclusion
With the addition of § 1453 to the law, the Class Action Fairness Act of 2005 is not any time soon going to solve many problems that people bent on "law suit reform" claim exist today. It adds to the burden of the federal courts in ways that did not previously exist. At best, the Act is taking some problems that exist in state courts and placing them in the federal courts.
As I noted in A second, more detailed look at the new class action law, the Class Action Fairness Act of 2005 technically changes only one aspect of federal subject matter jurisdiction--diversity jurisdiction. I began my analysis of the Act by talking about the possible chilling effect of the combination of the Act's removal provisions and its automatic conversion of some non-class actions to class actions. This post will examine the removal issues in detail.
Removal reprise
Once again, here is a brief description of removal...
28 U.S.C. § 1441(a) allows for cases originally filed in state court to be transferred to federal court through a process known as "removal."
Except as otherwise expressly provided by Act of Congress, any civil action brought in a State court of which the district courts of the United States have original jurisdiction, may be removed by the defendant or the defendants, to the district court of the United States for the district and division embracing the place where such action is pending...What this means is that if a case 1) is originally filed in state court, and 2) contains a federal question or has complete diversity of citizenship (or any other basis for federal jurisdiction), a defendant can have the case "removed" (that is, transferred) to federal court.
Once a defendant starts the procedure for removal (see 28 U.S.C. § 1446 for the procedure), there is almost nothing a plaintiff can do to keep the case from going to federal court. Once the case is in federal court, the plaintiff can seek to have the cse sent back to state court through a motion for remand (see 28 U.S.C. § 1447).
The removal provisions of the Class Action Fairness Act of 2005
- The general provision
A class action may be removed to a district court of the United States in accordance with section 1446 (except that the 1-year limitation under section 1446(b) shall not apply), without regard to whether any defendant is a citizen of the State in which the action is brought, except that such action may be removed by any defendant without the consent of all defendants.(emphasis added). The italicized portion is what is important. Any defendant in a class action can remove the case to federal court. No other rules concerning removal matter.
- Appeal of remand orders
Subsection (c) has four parts. The first part reads as follows:
(1) IN GENERAL- Section 1447 shall apply to any removal of a case under this section, except that notwithstanding section 1447(d), a court of appeals may accept an appeal from an order of a district court granting or denying a motion to remand a class action to the State court from which it was removed if application is made to the court of appeals not less than 7 days after entry of the order.(emphasis added). Under § 1447(d), an order remanding a removed case back to state court is NOT appealable (unless it involves civil rights claims, which the vast majority of class actions will not). That means that until now once a federal sent a case back to state court, that was the end of the story. The federal district court would no longer have to deal with the case, and the federal Circuit Courts of Appeal would never have to deal with the case. Thus, the motion for remand was a way in which federal district courts could control their dockets. By remanding removed cases, federal judges could cut down on the amount of litigation in their courts. Moreover, by making orders of remand not subject to review by the appellate courts, § 1447(d) made sure that the federal appellate courts would not be burdened by additional appeals.
That has now changed for class actions. To some degree federal district courts will now be required to hear cases which they were not required to hear before, and now the federal courts of appeal will also be required to hear cases that up until now they did have to address. All this means--once again--that the Class Action Fairness Act of 2005 will increase litigation in the federal courts.
Some might say that I am incorrect because the new provision clearly says that a court of appeals may, rather than must, accept an appeal concerning the grant or denial of a remand order. That is what we call in the lawyer business a distinction without a difference. The only way the court of appeals can decline to hear such an appeal is to make a ruling to that effect, and that can happen only if an appeal is filed. That means that the court of appeals will have to consider the case.
The second part of subsection (c) establishes the following timetable:
(2) TIME PERIOD FOR JUDGMENT- If the court of appeals accepts an appeal under paragraph (1), the court shall complete all action on such appeal, including rendering judgment, not later than 60 days after the date on which such appeal was filed, unless an extension is granted under paragraph (3).So under this provision, if the court of appeals accepts the appeal, it MUST act on it with 60 days. Thus, this provision puts further demand and restraint on how the court of appeals handles its case load. This will have the effect of slowing down the process on other appeals, for the court of appeals will necessarily have to put some matters aside in order to deal with the appeal of a remand order.
The third part of § 1453(c) provides a way by which the 60-day deadline can be extended:
(3) EXTENSION OF TIME PERIOD- The court of appeals may grant an extension of the 60-day period described in paragraph (2) if--Ten whole days--what a relief! Also, this provision raises the possibility that the court of appeals will have to spend additional time considering and ruling on a motion.
(A) all parties to the proceeding agree to such extension, for any period of time; or
(B) such extension is for good cause shown and in the interests of justice, for a period not to exceed 10 days.
The fourth part of § 1453(c) is very interesting.
(4) DENIAL OF APPEAL- If a final judgment on the appeal under paragraph (1) is not issued before the end of the period described in paragraph (2), including any extension under paragraph (3), the appeal shall be denied.What this means is that if the court of appeals accepts an appeal from the grant or denial of remand and does absolutely nothing, the appeal is denied. What, then, is the point of filing the appeal? Aside from that, what happens if a motion for extension is filed on day 59 or 60 and the court of appeals does not rule on it? Will the period be extended until such ruling? What if the ruling comes after the supposed 10-day maximum extension would have otherwise terminated? The Act does not address these questions--and believe me, they will come up.
All in all, the appeal provisions of § 1453(c) are going to do nothing but increase litigation in the federal courts in the foreseeable future, and that will negatively impact federal courts' ability to deal with their dockets and get their business done. Furthermore, § 1453(c) leaves many procedural questions unanswered, and until those questions are resolved, business in both the district courts and the courts of appeal are going is going to get bogged down.
And one more thing...The appeal contemplated by § 1453(c) is what is known as an interlocutory appeal. For purposes of this discussion, that means that any action taken by the court of appeals will not result in dismissal of the case. The case will continue. During the appeal, the rest of the case will simply be put on hold (this is an assumption on my part, for the Act does not say anything one way or the other), which adds further delay to the case. One reason this is significant is that while § 1453(c)(3) establishes a 60-day deadline, that time period starts when the appeal is accepted, not from the day the order for remand is granted or denied. This means that as of now, there is no prescribed time in which the court of appeals has to decide whether to accept the appeal.
Conclusion
With the addition of § 1453 to the law, the Class Action Fairness Act of 2005 is not any time soon going to solve many problems that people bent on "law suit reform" claim exist today. It adds to the burden of the federal courts in ways that did not previously exist. At best, the Act is taking some problems that exist in state courts and placing them in the federal courts.
posted by WCharles @ 2/28/2005 02:37:00 AM
0 Comments:
Post a Comment
<< Home