CAFA Class Action Defense Cases-Main Drug v. Aetna: Eleventh Circuit Dismisses For Lack Of Jurisdiction Appeal From District Court Refusing To Remand Class Action Removed Under Class Action Fairness Act (CAFA)

Feb 11, 2008 | By: Michael J. Hassen

Failure to Timely Seek Permission to Appeal Denial of Motion to Remand Class Action Complaints Removed to Federal Court under CAFA (Class Action Fairness Act) Required Dismissal of Appeals for Lack of Jurisdiction Eleventh Circuit Holds

Plaintiff, a pharmacy, filed a putative class action against insurance/pharmacy benefit management companies for misrepresentation, breach of contract, unjust enrichment and conspiracy, alleging that defendants failed to reimburse pharmacies “according to an agreed-upon formula for brand name prescriptions dispensed to Defendants’ insureds.” Main Drug, Inc. v. Aetna U.S. Healthcare, Inc., 455 F.Supp.2d 1323, 1324 (M.D. Ala. 2006). Defense attorneys removed the action to federal court asserting, inter alia, federal court jurisdiction under the Class Action Fairness Act of 2005 (CAFA), 28 U.S.C. § 1332(d). Id. Plaintiffs moved to remand the class action to state court, arguing that the defense had not established the requisite $5 million amount-in-controversy, id. The district court held that even under CAFA the defense bears the burden of establishing removal jurisdiction, but concluded that the defense had satisfied the amount in controversy requirement. Our summary of that district court order may be found here. Plaintiffs filed notices of appeal with the Eleventh Circuit; the Circuit Court dismissed the appeals for lack of jurisdiction. Main Drug, Inc. v. Aetna U.S. Healthcare, Inc., 475 F.3d 1228 (11th Cir. 2007).

The Eleventh Circuit noted the two consolidated class action lawsuits had been filed prior to CAFA’s effective date but the clerk of the court did not issue the summons until after CAFA’s effective date. Defense attorneys removed the class actions to federal court, and plaintiffs’ lawyers filed motions to remand arguing that the class action complaints had been filed before CAFA went into effect. The district court denied the motion. Main Drug, at 1229. Plaintiffs appealed the denial of the motion to remand within seven (7) days of the district court order, but never sought permission to appeal pursuant to Rule 5. Id. The Circuit Court explained at pages 1229 and 1230,

Interlocutory appellate jurisdiction to review CAFA remand orders is provided in 28 U.S.C. § 1453©(1). We held in Evans v. Walter Industries, Inc., 449 F.3d 1159, 1162 (11th Cir. 2006), that § 1453©(1) appeals are subject to the requirements of Fed. R. App. P. 5. That holding should have come as no surprise to anyone, because Rule 5 applies to appeals “within the court of appeals’ discretion,” id. 5(a)(1), and § 1453©(1) plainly makes appeals from CAFA remand rulings discretionary. 28 U.S.C. § 1453©(1) (“[A] court of appeals may accept an appeal from an order of a district court granting or denying a motion to remand a class action to the State court … .”).

Because plaintiffs failed to seek permission to appeal within the statutory time period specified for discretionary appeals, the Eleventh Circuit lacked jurisdiction over the appeals. Main Drug, at 1230. Accordingly, the Circuit Court dismissed the appeals for lack of jurisdiction. Id., at 1232.

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