United States: Circuits Aligning That Mass Actions Should Stay In Federal Court

A Sixth Circuit opinion that two cases each with over 100 personal injury claims against 3M should remain in federal court affirms Congress's intention in passing CAFA that that's where mass actions belong, Mayer Brown's Michael Scodro and Christopher Ferro write.

Confirming the broad scope of federal jurisdiction under the Class Action Fairness Act, the US Court of Appeals for the Sixth Circuit recently held that CAFA jurisdiction extended to personal-injury claims filed by hundreds of individual plaintiffs in state court.

In Adams v. 3M Company, the Sixth Circuit aligned with other circuits in deciding that two lawsuits qualified as "mass actions" under CAFA because they each joined more than 100 plaintiffs in the same complaint. The plaintiffs couldn't avoid federal jurisdiction by omitting from their filings that the cases would be "tried jointly."

The decision is a victory for defendants seeking to remove mass-tort claims to federal court and offers a clear rule supporting their right to a federal forum.

CAFA Framework

Congress passed CAFA in 2005 to address "abuses of the class device" that "undermine the national judicial system" by "keeping cases of national importance out of Federal court." CAFA thus expanded federal courts' diversity jurisdiction over class actions by eliminating the traditional requirement of complete diversity, and by allowing courts to aggregate class members' claims to meet a $5 million amount-in-controversy requirement.

But Congress also found that "mass actions" are "subject to many of the same abuses" as class actions. So CAFA similarly loosened jurisdictional requirements for mass actions, which CAFA defined as cases 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."

Sixth Circuit's Analysis

In Adams, 3M removed two cases from Kentucky state court to federal court under CAFA's mass-action provision. Each complaint named more than 100 plaintiffs who sought to hold defendants liable for manufacturing or distributing allegedly defective respirators. But the district court granted the plaintiffs' motion to remand the cases to state court, ruling that CAFA's requirements for mass actions were not met because there was "no signal for joint trial" and no "penetrating commonality" among the plaintiffs' claims.

After granting 3M's petition for permission to appeal, the Sixth Circuit reversed. In an opinion by Chief Judge Jeffrey Sutton, the court concluded that the cases qualify as CAFA mass actions.

Interpreting CAFA's plain text, the court ruled that the plaintiffs had "proposed" to try their claims "jointly" because each of their complaints named more than 100 plaintiffs. And the plaintiffs had proposed to try their claims on the "ground" of common questions because they had joined their claims under Kentucky's permissive joinder rule, which requires a common question of law or fact.

As the court explained, "[t]aking the complaints and what they propose at face value comports with ... the Court's preference for clear jurisdictional lines."

The Sixth Circuit rejected each of the plaintiffs' arguments for withholding CAFA jurisdiction. The plaintiffs argued that a joint trial would never actually be held, but the court ruled that the plaintiffs nevertheless had "proposed" a joint trial.

The plaintiffs argued that their claims were too diverse to be tried based on common questions—because the plaintiffs worked in different places using different respirators made by different defendants—but in the court's view, that meant only that the plaintiffs had made an "unwarranted" proposal for a joint trial, and "an unwarranted proposal remains a proposal."

The plaintiffs also pointed out that they sought individual trials in a related case, but the court explained that jurisdictional rules should be "simple," and "[r]equiring courts to divine counsel's unexpressed intentions and compare different cases' trial-management plans would be anything but."

Additionally, the court rejected the plaintiffs' request to affirm remand based on CAFA's local-controversy exception, holding that the plaintiffs' claims against the in-state distributor defendants were clearly "derivative" of their claims against the out-of-state manufacturer defendants, so the plaintiffs could not show that the in-state defendants were a "significant basis for the claims."

Takeaways

The Sixth Circuit in Adams thus joined other circuits in holding that civil cases naming more than 100 plaintiffs can be removed under CAFA even if the plaintiffs argue post-removal that they never intended to seek a joint trial based on common questions.

Adams is noteworthy not only for its clear statement of that rule, but also for expressly grounding it on the fundamental need for courts to establish clear rules to apply to threshold jurisdictional questions.

Adams is also a valuable, practical reminder that CAFA may permit defendants in state-court lawsuits to remove them to federal court even if the plaintiffs have not brought them as class actions.

Moreover, mass actions under Adams are presumed to be removable when they name more than 100 plaintiffs—so long as CAFA's other jurisdictional requirements, such as minimal diversity and a $5 million amount in controversy, are met, and certain exceptions specified in the mass-action provision to do not apply.

The Sixth Circuit's decision potentially will make it easier for mass-action defendants to litigate in federal court, consistent with Congress's intent in enacting CAFA to expand federal jurisdiction over large-scale litigation.

The case is Adams v. 3M Co., No. 23-5232, (6th Cir., April 19, 2023).

Originally published by Bloomberg Law.

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