Class action practitioners are now on notice that not all decisions remanding class actions to state court are appealable. Appealability of a remand order in certain types of class actions now depends on the location of the case and whether a motion by one of the parties was the basis for remand. In a divided opinion, the U.S. Court of Appeals for the Eleventh Circuit split with its sister circuits and held that a litigant does not have the right to appeal a sua sponte district court order remanding a class action to state court. The decision curtails the rights of litigants to seek appellate relief for a remand decision, at least in the Eleventh Circuit.
Sua Sponte Remand of a Removal Under CAFA
In Ruhlen v. Holiday Haven Homeowners, Inc., the plaintiffs sued alleging violations of both Florida state laws and the Americans with Disabilities Act (ADA). The plaintiffs framed their action as a “representative action” under Florida Rule of Civil Procedure 1.222. Citing the ADA claim and that the plaintiffs characterized their claim as a “representative action,” the defendants removed the case to the U.S. District Court for the Middle District of Florida under the Class Action Fairness Act (CAFA).
CAFA generally permits removal of class actions that satisfy three requirements. First, the class must exceed 100 members. Second, the amount at issue in the case must exceed $5 million. And third, the action must satisfy “minimum diversity”—at least one member of the class of plaintiffs must be a citizen of a state different from any defendant. In Ruhlen, the defendants argued that federal jurisdiction was appropriate both because of the ADA claim and because the “representative action” satisfied CAFA’s removal requirements
After removal, the plaintiffs amended their complaint, dropping the ADA claim. Subsequently, the district court remanded the action sua sponte, holding that federal question jurisdiction no longer existed. It also held that a “representative action” under Florida Rule of Civil Procedure 1.222 was “not a class action, as that term is understood for CAFA jurisdiction.”
Ordinarily district court remand decisions are not appealable. However, CAFA includes an exception to that general rule—permitting appeal of an order granting or denying a motion to remand a class action. Based on CAFA, the defendants filed a petition for permission to appeal, which the appellate court denied for lack of jurisdiction.
The court of appeals analyzed the language of §1453(c)(1), which provides that “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 from which it was removed. . . .” (emphasis added). It then asked “whether the phrase ‘an order of a district court granting or denying a motion to remand a class action’ covers a district court’s sua sponte remand order.” In “ordinary legal parlance” a “motion is a request or an application made by a party,” the court reasoned. In Ruhlen, neither party had filed a motion to remand, and the district court acted sua sponte. Therefore, the majority reasoned, §1453(c)(1) did not apply to grant jurisdiction over an appeal of the district court’s remand decision.
Textualism, Legislative Intent, or Both?
The Ruhlen decision was not unanimous. And, as pointed out in the dissenting opinion, “the circuits that have explicitly or implicitly addressed the issue” namely, the Seventh, Eighth, Ninth, and D.C. Circuits, “have all concluded that an order remanding a case removed based on CAFA jurisdiction does not become unreviewable simply because it was remanded sua sponte.” The dissenting judge noted that both the Eleventh Circuit and the U.S. Supreme Court have defined “sua sponte” as meaning a decision by a district court “on its own motion.” Thus, “it is fair and reasonable to understand a court’s sua sponte remand as [a] court’s ‘granting of its own motion to remand a class action.’” And if a sua sponte remand is a grant of a court’s own remand motion, then “a sua sponte remand fits within the language of § 1453(c)(1).”
ABA Litigation Section leaders are similarly divided on the proper interpretation of § 1453(c)(1) in the context of a sua sponte remand. “The clear reading of the black letter law says there’s no right to appeal, under these circumstances, because of that phrase ‘granting or denying a motion’ in the statutory language,” explains Andrew D. Tharp, Nashville, TN, vice-chair of the Litigation Section’s Mass Torts Litigation Committee. “The reality is Congress could have omitted that phrase ‘granting or denying a motion,’ and the reading of the statute would still make sense.”
But “[i]t’s a thorny issue in the CAFA context because of the way this statute is written, as the majority and the dissent obviously wrestled with here,” comments Joshua F. Kahn, Baltimore, MD, cochair of the Section’s Mass Torts Litigation Committee’s MDL and Class Procedures Subcommittee. Ultimately, Kahn finds the dissenting rationale more compelling. “There was room for a wider view of what the statute meant,” opines Kahn. “The entire dispute hinged on what Congress meant by a ‘motion to remand’ and whether a sua sponte order could fall within the scope of a motion,” Kahn adds.
W. Clay Massey, Atlanta, GA, a chair of the Section’s Mass Torts Litigation Committee’s Environmental & Toxic Torts Litigation Subcommittee notes that the dissent’s reading also aligns with Congress’s intent to permit aggrieved parties to appeal remands of CAFA actions. “[T]he principal objective in statutory construction is to understand and execute the intent of Congress,” explains Massey. In the context of §1453(c)(1), that intent was to “provide an aggrieved party a path to review of that [remand] decision,” Massey concludes, even if the decision was made sua sponte.
Limited Immediate Impact
The Ruhlen decision is unlikely to spur an uptick in district court sua sponte remand orders. Kahn suggests that the court’s decision “may actually have the opposite effect—it may give district court judges in the Eleventh Circuit a lot of pause before issuing a sua sponte remand order in a class action because they don’t want to put parties out of court, and they don’t want to foreclose appeal rights.” But “[y]ou need to be aware of it especially if you’re in the Eleventh Circuit” or a circuit that hasn’t yet ruled on the issue, advises Kahn.
Hashtags: #CAFAremand, #appealofremand, #classactionremandappeal
- Jennifer L. Gray, “Navigating CAFA Removal and Remand Strategies,” Corp. Counsel (May 26, 2014).
- Karen S. Precella & Kelli Benham, “Appeal of Interlocutory Remand Orders in Putative Class Action Cases,” Appellate Practice Litig. (Sept. 24, 2012).
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