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: CAFA Law Blog - Information, cases and insights regarding the Class Action Fairness Act of 2005

Removal By a Third-Party Defendant? It's a Theory That's Not "Built Ford Tough."

Ford Motor Credit Co. v. Frederick Jones, et al., No. 1:07 CV 728, 2007 WL 2236618 (N.D. Ohio July 31, 2007)

Jonesing for federal court CAFA jurisdiction on removal? Then, you better be the defendant! The Northern District of Ohio remanded this class action removed from state court by a third-party defendant under CAFA, holding that, under Sixth Circuit law interpreting 28 U.S.C. § 1441(c), a cross-claim defendant cannot remove a case.

You can almost hear the oral argument.

The Court:  Who removed this case?

Mullinax Ford:  Me and Mr. Jones, Mr. Jones, Mr. Jones.  We had a thing going on.  We both know that its wrong.  But it much too strong to let it cool down now.

The lawsuit started out simply enough, as a collection action by Ford Motor Credit filed against a customer who defaulted on his lease and his co-signatory. Ford repossessed the car after the customer defaulted, re-sold it for less than the amount remaining owed under the lease, and then filed suit to recover the deficiency. All pretty much standard stuff. 

The co-signatory then filed a counterclaim against Ford Motor Credit and a cross-claim against Mullinax Ford East, LLC, the dealership at which the car was leased. She also--enter CAFA--sought to certify a statewide class based on claims for alleged violation of Ohio’s Consumer Sales Practices Act and Retail Installment Sales Act. Mullinax then removed the case, arguing that because CAFA was enacted to expand federal jurisdiction, its provision that “any defendant” can remove the action is broader than the reference to removal by “the defendant or the defendants” contained in the removal provision of 28 U.S.C. § 1441(a) and, therefore, includes third-party defendants.

The district court was not persuaded. While agreeing that CAFA is intended to expand federal jurisdiction over class actions (which pretty much everyone now knows now but some still ignore), it declined to interpret the act as so expansive as to allow a cross-claim defendant to remove a case. Applying Sixth Circuit law holding that a third-party defendant cannot remove a case under 28 U.S.C. § 1441(c), it held that Mullinax could not remove the case and sent it back to state court.

The court also noted, in dicta, that even if Mullinax could remove the case, it would remand the action anyway because it would decline jurisdiction under 28 U.S.C. § 1332(d)(4). The complaint expressly limited the class members to “Ohio residents;” the principal injuries occurred in Ohio; Mullinax was a significant resident defendant; and neither party had identified a class action filed within the last three years with the same or similar factual allegations.

Full post as published by CAFA Law Blog - Information, cases and insights regarding the Class Action Fairness Act of 2005 on January 23, 2008 (boomark / email).