Massachusetts Federal Court Agrees With Defense that Post-CAFA Amendment of Class Action Complaint Rendered Suit Removable But Rejects Defense Claim that CAFA Shifts Burden of Proof to Plaintiff to Prove Remand is Warranted
Plaintiff filed a putative class action in Massachusetts state court against Bayer, Crompton Corporation and Uniroyal Chemical on February 10, 2005, alleging a conspiracy to fix prices on certain rubber and urethane products. Plaintiff amended the complaint in May 2005, and defense attorneys consented to the filing of a second amended class action complaint on February 6, 2006. Defense attorneys then removed the action to federal court on February 10, 2006, under the Class Action Fairness Act of 2005 (CAFA). Moniz v. Bayer A.G., 447 F.Supp.2d 31, 32-33 (D.Mass. 2006). Plaintiff filed a motion to remand the action to state court.
CAFA became effective on February 18, 2005. As a preliminarily matter, the federal court rejected the defense claim that CAFA shifted the burden of proof to the plaintiff to demonstrate that remand is warranted. Moniz, at 33-34. As the district court explained at page 34, “the clear majority of courts that have addressed the issue have held that, even where CAFA applies, the burden of proof on a motion to remand remains with the removing party because the text of the statute says nothing about changing that long-standing rule.”
Turning to the merits, the district court rejected plaintiff’s claim that “no amendment to a complaint could invoke CAFA because a civil action may be commenced only once.” Moniz, at 34. Rather, the federal court explained that the remand decision turned on whether the amendments to the class action complaint related-back to the filing of the original complaint. Id., at 35. “In general, two kinds of amendments that constitute the commencement of a new action for purposes of CAFA are: 1) amendments that add new defendants and 2) amendments that assert a wholly distinct claim for relief into a pending suit.” Id., at 37 (citations omitted). The Court noted that this case involved the second factor, id., and it summarized the differences at page 33 as follows:
The Second Amended Complaint alleges the same conspiracy to fix prices as the original complaint. The most recent version of the complaint consists, however, of three substantive changes from prior versions of the complaint: 1) it adds a claim under … the Massachusetts Consumer Protection Act, 2) it expands the kind of damages for which plaintiff seeks redress and 3) it includes a claim for relief related to an additional product (Neoprene). Plaintiff’s complaint insists that no member of the class wants, nor will accept, an award in excess of $74,999 and that the suit is intentionally brought only under Massachusetts state law.
The district court focused particularly on the addition of claims relating to Neoprene, which it characterized as the “biggest obstacle” to plaintiff’s motion to remand. Moniz, at 36. After a detailed analysis of the controlling case law and the facts, the district court held that the amendments to the complaint did not relate back to the original complaint because the amendments incorporated new claims that did not arise out of the same conduct, transaction or occurrence. Id., at 36-38. “Plaintiff’s putative class is the result of his inclusion of a new claim arising out of the addition of a new product, Neoprene, that was not previously part of the litigation… . [¶] In essence, [plaintiff] has added a novel claim to the existing case. The complaint that he filed on February 10, 2005, made no mention of Neoprene nor even hinted that any of the defendants was accountable for an alleged price-fixing conspiracy concerning that product.” Id., at 38. Accordingly, the class action was properly removed to federal court.
NOTE: The district court left open the question of whether the relation-back analysis is governed by state or federal law, concluding that in this case Massachusetts law mirrored federal law. Moniz, at 35.
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