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

And Then There Were Seventy-Five

Aburto v. Midland Credit Management, Inc., No. 3:08CV1473K, 2009 WL 4884147 (N.D. Tex., Dec. 16, 2009).

This tidy four-page opinion appears to be a mere procedural footnote, but lurking between the lines is a tale of… murder! 

Here is how the events unfolded.   Upon receiving a state court lawsuit containing the claims of 154 plaintiffs, the defendant, Midland Credit Management, timely removed the lawsuit to federal court. Thinking all was well, the defendant alleged federal court jurisdiction was based on CAFA. The defendant breathed a sigh of relief when the district court denied the plaintiffs' motion to remand, finding that the lawsuit was a classic 'mass action' under CAFA.

The plaintiffs obtained permission from the Fifth Circuit for an interlocutory appeal of the district court's denial of remand. The defendant would have been justified in thinking it had the appeal in the bag. However, just when the defendant's guard was down, something happened. Something terrible. 

Seventy-eight of the plaintiffs filed in the district court stipulations of dismissal of their claims, leaving only seventy-six plaintiffs in the litigation. Perhaps they had something to hide or something to fear? Regardless of motive, with this act, the plaintiffs killed the defendant's hopes of retaining federal court jurisdiction over the case, though the defendant was as yet unaware. The district judge, whose powers of observation rival Inspector Poirot's, was not so unaware. He sua sponte remanded the case to state court, because there were no longer more than 100 plaintiffs.

In a plot twist, the Fifth Circuit voided the district court's sua sponte  remand order, withdrew its permission for the appeal, and dismissed the appeal. Twisting the knife, the plaintiffs then moved the district court to reinstate its remand order, and another one filed a stipulation of dismissal.

And then there were seventy-five. This brings us to the now-inescapable conclusion of Midland Credit Management's brief stay in the federal court, for the district judge declined to exercise supplemental jurisdiction over the state law claims of the remaining seventy-five plaintiffs. To the defendant's certain horror, the district court remanded the case to state court. And then there were none (in federal court anyway).

SGJ

Full post as published by CAFA Law Blog - Information, cases and insights regarding the Class Action Fairness Act of 2005 on April 18, 2010 (boomark / email).