731 F.3d 918 | 9th Cir. | 2013
Lead Opinion
Opinion by Judge RAWLINSON; Dissent by Judge GOULD.
OPINION
This case presents the issue of whether removal was proper under the “mass action” provision of the Class Action Fairness Act of 2005 (CAFA), Pub.L. No. 109-2, 119 Stat. 4 (2005), when plaintiffs moved for coordination pursuant to California Code of Civil Procedure section 404. CAFA authorizes federal removal for mass actions when “monetary relief claims of 100 or more persons are proposed to be tried jointly on the ground that the plaintiffs’ claims involve common questions of law or fact....” 28 U.S.C. § 1332(d)(ll)(B)(i). Because we conclude that this CAFA jurisdictional requirement was not met under the totality of the circumstances in this case, we affirm the district court’s remand order.
I
Defendant-Appellant Teva Pharmaceuticals USA, Inc. (Teva) appeals the district court’s order remanding this case to state court. This case was one of twenty-six pending before the district court alleging injuries related to the ingestion of propox-yphene, an ingredient found in the Darvo-cet and Darvon pain medications, as well as in their generic brand counterparts. There are additional propoxyphene cases pending in multidistrict litigation in the Eastern District of Kentucky. See In re Darvocet, Darvon & Propoxyphene Prods. Liab. Litig., 780 F.Supp.2d 1379 (E.D.Ky.2011).
Propoxyphene is a pain reliever that was used in the United States to treat mild to moderate pain from 1957 through November, 2010, when drugs containing propoxy-phene were taken off the market because of the Food & Drug Administration’s safety concerns. Teva held the rights to the generic formulary of Darvocet and Darvon, and Plaintiffs allege that Teva was involved in all aspects of the creation, distribution, and sale of generic propoxyphene products.
To date, more than forty actions have been filed in California state courts regarding products containing propoxy-phene. On October 23, 2012, a group of attorneys responsible for many of the pro-poxyphene actions filed a petition asking the California Judicial Council to establish
Coordination of civil actions sharing a common question of fact or law is appropriate if one judge hearing all of the actions for all purposes in a selected site or sites will promote the ends of justice taking into account whether the common question of fact or law is predominating and significant to the litigation; the convenience of parties, witnesses, and counsel; the relative development of the actions and the work product of counsel; the efficient utilization of judicial facilities and manpower; the calendar of the courts; the disadvantages of duplicative and inconsistent rulings, orders, or judgments; and, the likelihood of settlement of the actions without further litigation should coordination be denied.
After Plaintiffs’ petition for coordination was filed, Teva removed the case to federal district court under CAFA’s mass action provision.
CAFA provides federal district courts with original jurisdiction over “mass- actions” if the actions meet all of the statutory requirements. CAFA defines a mass action as:
any civil action ... in which monetary relief claims of 100 or more persons are •proposed to be tried jointly on the ground that the plaintiffs’ claims involve common questions of law or fact, ...
28 U.S.C. § 1332(d)(ll)(B)(i) (emphasis added). The only disputed issue in this case is whether Plaintiffs’ petition for coordination constitutes a proposal to be tried jointly under CAFA.
The district court found that there was no federal jurisdiction under CAFA because Plaintiffs’ petition for coordination did not constitute a proposal to try the cases jointly, and remanded the case back to state court. The district court distinguished this case from the Seventh Circuit’s decision in In re Abbott Laboratories, Inc., 698 F.3d 568 (7th Cir.2012), explaining that Plaintiffs’ petition for coordination differed from the Plaintiffs’ consolidation request in Abbott because Plaintiffs’ petition focused on pretrial matters while the Plaintiffs’ consolidation request in Abbott specifically sought consolidation “through trial.”
Defendants sought permission to appeal the district court’s remand order, which we granted on July 26, 2013. We review the district court’s remand order de novo. See Abrego Abrego v. The Dow Chemical Co., 443 F.3d 676, 679 (9th Cir.2006).
II
The statutory issue for us to decide is whether the petition seeking coordination of the California propoxyphene actions was a proposal in substance for those actions to be tried jointly. This is a question of first impression in our circuit, as it was for the Seventh Circuit in Abbott.
We start from the well-established premise that the removal statutes are to be strictly construed. See Scimone v. Carnival Corp., 720 F.3d 876, 882 (11th Cir.2013). A corollary precept is that we apply a presumption against removal and construe any uncertainty as to removability in favor of remand. See id.; see also Tanoh v. Dow Chemical Corp., 561 F.3d 945, 953 (9th Cir.2009); Abrego Abrego 443 F.3d at 685. We have correctly observed that CAFA’s mass action provision is “fairly narrow,” Tanoh, 561 F.3d at 953, given that a qualifying mass action will only be present if there is an aggregate amount in controversy of five million dollars or more, at least one plaintiff who is a citizen of a state or foreign state different from that of any defendant, and “monetary relief claims
Tanoh also instructs that plaintiffs are the “masters of their complaint,” and do not propose a joint trial simply by structuring their complaints so as to avoid the one hundred-plaintiff threshold. 561 F.3d at 953, 956; see also Anderson v. Bayer Corp., 610 F.3d 390, 393 (7th Cir.2010); Seimone, 720 F.3d at 883-84. Under this view, plaintiffs can structure actions in cases involving more than one hundred potential claimants so as to avoid federal jurisdiction under CAFA.
Plaintiffs argue, and the district court agreed, that their analogous petition for coordination was not a proposal to try the cases jointly. We also agree. California Code of Civil Procedure section 404 allows the coordination of “all of the actions for all purposes.” However, the plaintiffs’ petition for coordination stopped far short of proposing a joint trial. This fact is important because, as discussed, both the Supreme Court and our court recognize that the plaintiff is, and should be, in control of selection of the litigation forum. See Standard Fire Ins. Co. v. Knowles, — U.S. -, 133 S.Ct. 1345, 1350, 185 L.Ed.2d 439 (2013) (reiterating in the CAFA context that plaintiffs are the “masters of their complaints”); see also Tanoh, 561 F.3d at 953 (referencing “the well-established rule that plaintiffs as masters of their complaint, may choose their forum by selecting state over federal court ... ”).
Plaintiffs asked for coordination under section 404, and submitted a Memorandum of Points and Authorities in support of the petition for coordination. We now turn to that memorandum to discern whether plaintiffs proposed that the claims of 100 or more persons were “to be tried jointly.” 28 U.S.C. § 1332(d)(ll)(B)(i).
On page 6 of the Memorandum of Points and Authorities, plaintiffs gave the following explanation for seeking coordination:
Petitioners’ counsel anticipates that the actions will ... involve duplicative requests for the same defendant witness depositions and the same documents related to development, manufacturing, testing, marketing, and sale of the Dar-vocet Product. Absent coordination of these actions by a single judge, there is*923 a significant likelihood of duplicative discovery, waste of judicial resources and possible inconsistent judicial rulings on legal issues.
One would be hard pressed to parse a proposal for a joint trial from this language. Rather, the obvious focus was on pretrial proceedings, i.e., discovery matters.
On page 7 of the memorandum, plaintiffs informed the court that coordination was also sought because “[u]se of committees and standardized discovery in a coordinated setting will expedite resolutions of these cases, avoid inconsistent results, and assist in alleviating onerous burdens on the courts as well as the parties.” Again, we see emphasis on pretrial proceedings with no mention of a joint trial.
On page 8, the plaintiffs urged coordination on the following bases:
One judge hearing all of the actions for all purposes in a selected site or sites will promote the ends of justice; Common questions of fact or law are predominating and significant to the litigation; Coordination may serve the convenience of parties, witnesses and counsel the relative development of the actions and the work product of counsel; Coordination may facilitate the efficient utilization of judicial facilities and manpower; Coordination may enhance the orderly calendar of the courts; Without coordination, the parties may suffer from disadvantages caused by duplicative and inconsistent rulings, orders or judgments ...
(Emphases added).
Isolation of phrases such as “for all purposes,” “inconsistent judgments,” and “conflicting determinations of liability” to support a conclusion that the plaintiffs sought a joint trial completely ignores all references to discovery, including on the same page containing the reference to liability, where Plaintiffs stated: “[I]n light of the similarity of the actions, there will be duplicate discovery obligations upon the common defendants unless coordination is ordered. Coordination before initiation of discovery in any of the cases will eliminate waste of resources and will facilitate economy-” (Emphases added). As we read the plaintiffs’ petition for coordination, it is quite a stretch to discern a request for joint trial when the clear focus of the petition is on pretrial matters. Reliance on nine words to the exclusion of all else is inconsistent with the principle that any doubt about federal jurisdiction be resolved in favor of remand. See Scimone, 720 F.3d at 882; see also Abrego Abrego, 443 F.3d at 685. In particular, Defendants’ reliance on the plaintiffs’ reference to inconsistent judgments is on shaky ground because judgments may be rendered outside the confines of a trial. Default judgments and summary judgments come readily to mind. See Federal Rules of Civil Procedure 55 and 56 (providing for entry of judgment prior to trial).
Neither are we persuaded that we should reach the same result as the Seventh Circuit in Abbott. Not only did that case involve a completely different procedure, consolidation as opposed to coordination, see 698 F.3d at 570, the plaintiffs’ request in that case explicitly and expressly referenced “consolidation of the cases through trial and not solely for pretrial proceedings,” thereby removing any question of the plaintiffs’ intent. Id. at 571 (footnote reference and internal quotation marks omitted).
This case also differs from Mississippi ex rel. Hood v. AU Optronics, 701 F.3d 796 (5th Cir.2012), where the Fifth Circuit concluded that federal jurisdiction existed under CAFA when the State of Mississippi brought an action pursuant to the Missis
Unlike the AU Optronics case, the plaintiffs here have filed separate lawsuits, none of which have been initiated by the State, so the rationale articulated by the Fifth Circuit is inapposite, even were we inclined to adopt it.
Finally, we consider the rulings of three different district court judges in this circuit who have determined that similar requests for coordination under this California procedural rule were not the equivalent of a request for a joint trial. See Gutowski v. McKesson Corp., No. C 12-6056 CW, 2013 WL 675540 (N.D.Cal. Feb. 25, 2013); Posey v. McKesson Corp., No. C 12-05939 RS, 2013 WL 361168 (N.D.Cal. Jan. 29, 2013); Rice v. McKesson Corp., No. C 12-05949 WHA, 2013 WL 97738 (N.D.Cal. Jan. 7, 2013). These eminent California judges were practitioners in California pri- or to taking the bench and their decisions, with their considerable knowledge of California procedural rules, reinforce our view of the appropriate disposition of this case. We would affirm this fourth California district court judge’s decision to remand this case to state court.
Ill
Because we conclude that Plaintiffs’ petition for coordination was not a proposal to try the cases jointly, we AFFIRM the district court’s order granting Plaintiffs’ motion to remand.
. Amicus curiae Chamber of Commerce of the U.S.A. and amicus curiae PhRMA essentially argue that we should revisit Tanoh and that it has lost its precedential value, urging that plaintiffs should not be able to structure their complaints to avoid federal jurisdiction in light of the purposes of CAFA to curb class action and mass action abuses that have occurred in state courts. We reject this argument because we agree with the reasoning of Tanoh, because as a three-judge panel we do not have authority to overrule a prior circuit precedent, and because the Chamber of Commerce’s position would put us at odds with the Seventh Circuit, which cited Tanoh approvingly in Abbott, and the Eleventh Circuit, which did so in Seimone. See Abbott, 698 F.3d at 572; Seimone, 720 F.3d at 884.
. Amicus curiae Washington Legal Foundation argues that "joint trial” includes cases resolved in conjunction with each other, relying on the dictionary definition of "joint” and the statute's plain language. We agree that "joint trial” does not mean everyone sitting in the courtroom at the same time. However, as made obvious in this opinion, we disagree that mere invocation of the California coordination provision is sufficient to constitute a proposal for joint trial. Rather, as we have done here, we look to Plaintiffs’ petition and supporting documents to determine the extent of Plaintiffs’ request for coordination.
. We recognize that we have discretion to consider alternative bases for the exercise of federal jurisdiction, see Nevada v. Bank of America Corporation, 672 F.3d 661, 673 (9th Cir.2012). We agree with the district court that there is a lack of federal question jurisdiction because Plaintiffs' state law claims do not "aris[ej under the Constitution, laws, or treaties of the United States.” Merrell Dow Pharms., Inc. v. Thompson, 478 U.S. 804, 805, 817, 106 S.Ct. 3229, 92 L.Ed.2d 650 (1986).
We also agree with the district court's conclusion that complete diversity is lacking between the parties inasmuch as plaintiff Judith Romo and defendant McKesson Corporation are both California citizens. See Wisc. Dep’t of Corr. v. Schacht, 524 U.S. 381, 388, 118 S.Ct. 2047, 141 L.Ed.2d 364 (1998) (requiring complete diversity of citizenship for federal jurisdiction).
Dissenting Opinion
dissenting:
I respectfully dissent.
We must decide whether removal is proper under the “mass action” provision of the Class Action Fairness Act of 2005 (“CAFA”), Pub.L. No. 109-2, 119 Stat. 4 (2005), when plaintiffs move for coordination pursuant to California Code of Civil Procedure section 404 and justify their request in part by asserting a need to
I
The issue before us is whether Plaintiffs’ petition to coordinate actions under California Code of Civil Procedure section 404 constitutes a proposal for these actions in California state court to be tried jointly, making the actions a “mass action” subject to federal jurisdiction under CAFA. I agree with the majority that federal courts are courts of limited jurisdiction, and the general rule is that removal statutes are strictly construed against removal.
Congress enacted CAFA in 2005 to “curb perceived abuses of the class action device which, in the view of CAFA’s proponents, had often been used to litigate mul-ti-state or even national class actions in state courts.” Tanoh v. Dow Chemical Co., 561 F.3d 945, 952 (9th Cir.2009) (citation omitted). CAFA further extends federal jurisdiction over “mass action” cases when several requirements are met, although only the “proposed to be tried jointly” requirement is at issue here. See 28 U.S.C. § 1332(d)(2), (6), (11)(A).
Proposals for joint trials may be made implicitly, and a “joint trial” may “take different forms as long as the plaintiffs’ claims are being determined jointly.” Abbott, 698 F.3d at 573; see Bullard v. Burlington N. Santa Fe Ry. Co., 535 F.3d 759, 762 (7th Cir.2008). For example, an “exemplary” or “bellwether” trial may only feature a small group of plaintiffs, but it is still a joint trial when the claims or issues of a larger group are precluded or otherwise decided by the results. See Koral v. Boeing, Co., 628 F.3d 945, 947 (7th Cir.2011). We should be looking at the reality of joint trial proposal, not at how a party may characterize its own actions.
What is critical is that this appeal concerns a set of actions filed in state court followed by a petition by Plaintiffs to coordinate, in part to avoid inconsistent judgments. And so it is on that aspect of this case, distinguishing it from Tanoh, that we should be focused.
Our Ninth Circuit precedent in Tanoh suggests that plaintiffs are the “masters of their complaint,” and do not propose a joint trial simply by structuring their complaints so as to avoid the one hundred-plaintiff threshold. 561 F.3d at 953, 956; see Anderson v. Bayer; 610 F.3d 390, 393 (7th Cir.2010); Scimone v. Carnival Corp., 720 F.3d 876 (11th Cir.2013). That is not surprising and is analogous to the fact that individuals and corporations can structure transactions so as to avoid statutory prohibitions or terms.
But the United States Supreme Court has recently pointed out that there are limits to how far plaintiffs may go in structuring their complaints to avoid federal jurisdiction. Thus in Standard Fire v. Knowles, the Supreme Court rejected the ability of a proposed class action plaintiff to stipulate that damages would not exceed five million dollars. 568 U.S. -, 133 S.Ct. 1345, 1350, 185 L.Ed.2d 439 (2013) (“[T]he stipulation at issue here can tie Knowles’ hands, but it does not resolve the amount-in-controversy question in light of his inability to bind the rest of the class.”). In that case, the plaintiff unsuccessfully attempted to stipulate an amount-in-controversy below five million dollars before his proposed class had been certified. Id. at 1347. Standard Fire arose in the context of a challenge to plaintiffs’ counsel’s attempt to limit damages before class certification, and the Court recognized that plaintiffs’ counsel could not execute a damages stipulation binding class claimants not yet joined. So Standard Fire is in my view not necessarily controlling on the issue before us as to whether there has been a proposal for joint trial. Because in Standard Fire the Supreme Court appeared to reiterate that plaintiffs are the “masters of their complaint,” id. at 1350, if Plaintiffs merely had structured separate actions with less than one hundred claimants, and did not seek to coordinate them, I must currently think that the Supreme Court would hold, as we did in Tanoh, that no
Plaintiffs argue, and the majority agrees, that their petition for coordination was not a proposal to try the cases jointly. I must respectfully disagree. California Code of Civil Procedure section 404 allows the coordination of “all of the actions for all purposes,” and presents a factor-based test to determine whether coordination is appropriate. Plaintiffs asked for coordination under section 404, and submitted a memorandum in support of the petition for coordination. Reasons Plaintiffs listed as supportive of their petition, including the danger of inconsistent judgments and conflicting determinations of liability, in my view could only be addressed through some form of joint trial. When Plaintiffs asked the California Judicial Council to coordinate their cases for reasons that only a joint trial could address, they implicitly proposed a joint trial, bringing their cases within CAFA’s mass action provision.
Plaintiffs further contend that we should interpret the phrase “joint trial” to mean “a joint trial where more than one party (and for purposes of CAFA 100 or more parties) simultaneously present their claims to a trier of fact.” I would reject this interpretation because it violates the canon against reading a statutory provision in such a way as to render another provision superfluous. See Bilski v. Kappos, — U.S. -, 130 S.Ct. 3218, 3228, 177 L.Ed.2d 792 (2010) (citation omitted). If our court were to adopt Plaintiffs’ interpretation of “joint trial,” the mass action statutory exception for “claims [that] have been consolidated or coordinated solely for pretrial proceedings” would be meaningless because a proposal for anything short of a single massive trial for all claimants would already fail the mass action requirement. 28 U.S.C. § 1332(d)(ll)(B)(ii).
Although Plaintiffs argue that the Seventh Circuit decision in Abbott is inapplica
In light of the specific reasons given for coordination of the California actions that involve propoxyphene, it is a natural and probable consequence of the grant of the petition seeking coordination, indeed it seems an inevitable result, that these varied actions must be tried together, or coordinated in a way to avoid inconsistent results as with bellwether trials, which amounts to the same thing. If the natural and probable consequence of coordination of separate actions has an impact indistinguishable from joint trial, then it is sensible to treat such a petition for coordination as a proposal for joint trial. I conclude that the circumstances presented here are a proposal for a joint trial within the meaning of what Congress said and intended in CAFA, and for that reason would reverse the district court’s order granting Plaintiffs’ motion to remand.
.In the petition Plaintiffs asked for coordination of their lawsuits for reasons including concerns that there could be potential "duplicate and inconsistent rulings, orders, or judgments,” and that without coordination, "two or more separate courts ... may render different rulings on liability and other issues.” After this petition for coordination was filed, Teva removed the case to federal district court under CAFA’s mass action provision.
. The Seventh Circuit has held that CAFA "must be implemented according to its terms, rather than in a manner that disfavors removal of large-stakes, multistate class actions,” and I agree. Back Doctors Ltd. v. Metro. Prop. & Cas. Ins. Co., 637 F.3d 827, 830 (7th Cir.2011).
. The amicus curiae Chamber of Commerce of the U.S.A. and amicus curiae PhRMA want us to revisit Tanoh, to say that it has no vitality and that plaintiffs cannot structure
. Amicus -curiae Washington Legal Foundation argues that "joint trial” includes cases resolved in conjunction with each other, relying on the dictionary definition of "joint” and the statute's plain language. This argument has some weight, and with the majority I would say that “joint trial” does not mean everyone sitting in the courtroom at the same time. Washington Legal Foundation also asserts that whenever the California coordination provision is invoked, that in itself will be enough to constitute a proposal for joint trial. I would not need to go so far to resolve this case because I rely in part on Plaintiffs' petition's explanation that there was concern to avoid inconsistent judgments, and because this case does not factually present as one where only coordination of pretrial matters was requested.
. I agree with Chief Judge Easterbrook of the Seventh Circuit that "[cjourts do not read statutes to make entire subsections vanish into the night.” Bullard v. Burlington N. Santa Fe Ry. Co., 535 F.3d 759, 762 (7th Cir.2008).
. Illinois Supreme Court Rule 384(a) says: “When civil actions involving one or more common questions of fact or law are pending in different judicial circuits, and the supreme court determines that consolidation would serve the convenience of the parties and witnesses and would promote the just and efficient conduct of such actions. The supreme court may ... transfer all such actions to one judicial circuit for consolidated pretrial, trial, or post-trial proceedings.”
. In light of what I would decide, I would not need to reach Defendants’ alternative arguments that federal subject-matter jurisdiction exists on other grounds.