Graphic Communications Local 1B Health & Welfare Fund "A" v. CVS Caremark Corp.
2011 U.S. App. LEXIS 4747
| 8th Cir. | 2011Background
- Plaintiffs are union-sponsored health benefit funds presenting generic drug pricing claims against major retail chains.
- Plaintiffs sought class certification for all Minnesota purchases of, or third-party payments for, generic prescription drugs dispensed since July 28, 2003.
- Defendants removed the case to federal court asserting CAFA jurisdiction with minimal diversity, >$5,000,000 in controversy, and 100+ class members.
- District court dismissed the complaint without prejudice, then Plaintiffs filed a second amended complaint and moved to remand based on CAFA’s local controversy provision.
- The district court remanded to state court, concluding it lacked subject matter jurisdiction due to the local controversy provision.
- Defendants appeal, contending the local controversy provision does not divest jurisdiction and remand was untimely under 28 U.S.C. § 1447(c); the court reverses and remands.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Does CAFA's local controversy provision divest subject matter jurisdiction? | Plaintiffs: provision abstains, not divests, jurisdiction; remand proper. | Defendants: local provision is a jurisdictional defect; remand improper. | Local provision does not divest jurisdiction; abstention only. |
| Is remand under § 1447(c) timely given non-subject-matter 'defects'? | Remand timely under abstention-type defect. | Remand untimely unless defect is jurisdictional. | Remand timely only if defect falls within § 1447(c); abstention not jurisdictional. |
| What is the proper interpretation of 'defect' under § 1447(c)? | Defect should be read narrowly to include abstention. | Defect should be read broadly to cover any remand ground. | Defect is not broad; abstention not within § 1447(c). |
| Should remand be affirmed or reversed given historical remand limitations? | Remand should be affirmed based on local controversy. | Remand should be reversed for lack of jurisdictional defect. | Remand reversed and case remanded for further proceedings. |
Key Cases Cited
- In re Otter Tail Power Co., 116 F.3d 1207 (8th Cir.1997) (abstention does not deprive jurisdiction)
- Wallace v. La. Citizens Prop. Ins. Corp., 444 F.3d 697 (5th Cir.2006) (abstention as limitation on jurisdiction, not divestiture)
- Snapper, Inc. v. Redan, 171 F.3d 1249 (11th Cir.1999) (defect in removal proceeding; §1447(c) scope)
- Kamm v. ITEX Corp., 568 F.3d 752 (9th Cir.2009) (defect breadth under §1447(c) narrowly construed)
- Ericsson, Inc. v. Autoridad de Energia Electrica de Puerto Rico, 201 F.3d 1 (1st Cir.2000) (abstention doctrines and remand scope)
- Braden v. Wal-Mart Stores, Inc., 588 F.3d 585 (8th Cir.2009) (remand timing and threshold questions on remand orders)