Westwood Apex v. Contreras
644 F.3d 799
9th Cir.2011Background
- CAFA permits removal of large interstate class actions to federal court when certain conditions are met, including minimal diversity and amount in controversy over $5,000,000.
- Contreras filed a class action counterclaims in state court against Westwood Apex and additional counterclaim defendants (Westwood College entities).
- Additional counterclaim defendants removed the case to federal court under CAFA § 1453(b), arguing removal by any defendant is permitted.
- The district court remanded, holding that § 1453(b) does not authorize removal by an additional counterclaim defendant.
- The appeal was granted to determine whether CAFA § 1453(b) allows removal by those joined as defendants to a counterclaim.
- The Ninth Circuit affirmed the remand, holding that CAFA § 1453(b) does not extend removal rights to additional counterclaim defendants.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether § 1453(b) authorizes removal by additional counterclaim defendants | Westwood Apex argues no, such defendants may not remove. | The removing parties contend § 1453(b) allows removal by any defendant, including counterclaim defendants. | No; § 1453(b) does not permit additional counterclaim defendants to remove. |
| Whether Shamrock Oil's original defendant rule applies to CAFA removals | Westwood Apex relies on Shamrock Oil to bar removal by non-original defendants. | Removing parties argue CAFA overrides Shamrock Oil by allowing removal by any defendant. | Shamrock Oil's original defendant rule remains applicable; non-original defendants cannot remove. |
| Whether CAFA's structure and history show intent to modify removal of cross/third-party defendants | Westwood Apex contends CAFA did not intend to alter the traditional defendant concept for removals. | Removing parties assert CAFA eliminates barriers to removal, including unanimity and home-state restrictions. | CAFA eliminates certain barriers but does not rewrite the meaning of 'defendant' to include counterclaim/third-party defendants for removal. |
Key Cases Cited
- Palisades Collections LLC v. Shorts, 552 F.3d 327 (4th Cir.2008) (CAFA removal barriers; supports non-extension to counterclaim defendants)
- First Bank v. DJL Props., LLC, 598 F.3d 915 (7th Cir.2010) (defendant meaning; reading 'any' with 'defendant' must be consistent)
- Shamrock Oil & Gas Corp. v. Sheets, 313 U.S. 100 (Supreme Court 1941) (original plaintiff vs defendant removal scope; basis for narrow 'defendant' in removal)
- Progressive West Ins. Co. v. Preciado, 479 F.3d 1014 (9th Cir.2007) (CAFA removal barriers; discussion of eliminating obstacles to removal)
- Abrego Abrego v. Dow Chemical Co., 443 F.3d 676 (9th Cir.2006) (CAFA context; legislative history and intent guiding CAFA interpretation)
- Lively v. Verizon Commc'ns, Inc., 627 F.3d 409 (9th Cir.2010) (CAFA jurisdiction and de novo review principles)
- Unites Steel v. Shell Oil Co., 602 F.3d 1087 (9th Cir.2010) (CAFA framework and removal jurisdiction context)