Liberty Mutual Fire Insurance Co. v. EZ-FLO International, Inc.
877 F.3d 1081
| 9th Cir. | 2017Background
- Plaintiffs: 26 insurance companies sued EZ-FLO as subrogees, asserting claims based on defective plastic nuts on supply lines that allegedly caused water damage to insured homeowners.
- The insurers claim subrogated losses for 145 insured homeowners and amended their complaint to seek over $5,000,000 in aggregate damages.
- EZ-FLO removed the case to federal court under the Class Action Fairness Act (CAFA) mass-action provision, 28 U.S.C. § 1332(d)(11)(B)(i).
- The district court remanded, concluding the suit did not meet CAFA’s requirement of “claims of 100 or more persons” because the complaint named only 26 plaintiffs (the insurers).
- The Ninth Circuit reviewed de novo whether the insureds (145) count as the “100 or more persons” required for a mass action; the court relied chiefly on the Supreme Court’s decision in Mississippi ex rel. Hood v. AU Optronics.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether CAFA’s mass-action numerosity (“100 or more persons”) counts the underlying insureds (real parties in interest) or only the named plaintiffs | Insurers: their suit as subrogees represents 145 insureds so the “100 persons” threshold is met | EZ-FLO: the insureds should be counted because subrogees “stand in the shoes” of insureds and real parties in interest should be counted | Held: Only named plaintiffs count; the insureds are not plaintiffs for CAFA purposes, so numerosity not satisfied and federal jurisdiction under CAFA fails |
Key Cases Cited
- Mississippi ex rel. Hood v. AU Optronics Corp., 134 S. Ct. 736 (U.S. 2014) (holding "100 or more persons" means named plaintiffs proposed to be tried jointly)
- Corber v. Xanodyne Pharm., Inc., 771 F.3d 1218 (9th Cir. 2014) (de novo review standard for remand under CAFA)
- United States v. Aetna Cas. & Sur. Co., 338 U.S. 366 (U.S. 1949) (subrogee who pays entire loss is the real party in interest)
- United States ex rel. Eisenstein v. City of New York, 556 U.S. 928 (U.S. 2009) (party named in caption not necessarily a party for all purposes)
- Dean v. United States, 556 U.S. 568 (U.S. 2009) (interpretive canon: differing statutory language indicates intentional congressional choice)