Emily Franco
Emily Franco is a Resident Forum Blogger bringing insight to class action law and policy regarding consumer, product, and commercial fraud litigation.
2014 has certainly earned its mark as the year for employer and manufacturer defendants in class action matters. The frontrunner in this defense-favoring movement is the United States Court of Appeals for the Ninth Circuit, leading the circuit court split over the latest approach to the interpretation and application of California Code of Civil Procedure Section 404 and of Class Action Fairness Act of 2005 (“CAFA”). CAFA extends federal jurisdiction to class actions and mass actions that fall within its scope, the spirit of which prevents potential class-action abuse. Furthermore, CAFA, in conjunction with Section 404, defines a mass action as civil suits involving 100 or more individuals that should be tried jointly should the plaintiff’s claim pertain to a common question of law or fact.
On November 18, 2014, the Ninth Circuit through Corber v. Xanodyne Pharmaceuticals (“Corber”) solidified potential defense strategies to secure removal of class actions to federal courts, a notoriously more favorable turf for employer and manufacturer defendants. Corber is one case in a slew of recent federal judgments partially restraining plaintiffs’ ability to avoid federal class or mass action jurisdiction.
Corber involved two of twenty-six cases before the district court against Xanodyne Pharmaceuticals, Inc. and Teva Pharmaceuticals USA, Inc. alleging injuries based on the ingestion of the controversial pain reliever ingredient propoxyphene, used in the U.S. to treat moderate pain since 1957, and later taken off of the market in 2010 due to safety concerns.
In line with Section 404, a number of these propoxyphene actions were filed by plaintiffs who sought merely a coordination of civil actions containing a common question of fact or law to be heard before the same panel. The aim was to produce corresponding, yet separate, decisions in cases that covered related, but not identical, matters. In the attempt to achieve coordination, plaintiffs ostensibly assembled small groups of less than 100 and drafted the Section 404 motions to obtain coordination in state court, avoiding federal jurisdiction all together. Unfortunately, plaintiffs’ efforts instead prompted the consolidation of all actions to be heard jointly by one judge, where all petitions are conjoined for a single order entered in the same administrative proceeding.
Seeking to invoke federal jurisdiction under CAFA’s class action provision, the Ninth Circuit initially affirmed the remand orders as the petitions did not expressly propose the cases be tried jointly. Tides changed on rehearing, however, when plaintiffs’ attempt to circumvent CAFA’s 100-person requirement was rebuked by the circuit court en banc, reclassifying these matters as a “mass action” subject to removal to federal jurisdiction. The primary focus of the Ninth Circuit’s decision was the language in Section 404 and CAFA allowing plaintiffs to seek one judge for all purposes, as well as the absence of any limiting language in the propoxyphene case petitions. Ultimately, the court rejected the rule requiring a class to expressly request a joint trial or joint pretrial matters, and instead looked to the general language of the aggregate petitions. Specifically, the support plaintiffs listed in their coordination motions pertaining to concerns of conflicting liability and inconsistent judgment could be better addressed by issuing a joint, consolidated trial over a coordinating one. In totality, the Court reasoned that the plaintiff’s petition for coordination collectively listed an indication that the plaintiffs evidently sought consolidation for purposes of the full trial, and not merely for selective purposes and aspects of the action.
The Ninth Circuit also considered the Seventh Circuit’s In re Abbott Laboratories decision and the Eighth Circuit’s Atwell v. Boston Scientific decision, which had both held that despite the lack of an explicit request for consolidated trial, the plaintiffs’ petitions for coordination equated to inherent proposals for a joint trial. Borrowing that rationale, the Ninth Circuit assembled a balancing test, weighing plaintiffs’ Section 404 petitions to coordinate the propoxyphene actions of common law or fact “for all purposes,” and whether these actions would be better served jointly tried in a consolidated matter for purposes of federal mass action jurisdiction. By ending the plaintiff’s CAFA circumventing tactics, the Ninth Circuit has inevitably opened the door for employer and manufacturer defendants to remove to more favorable federal courts based on the class member quantity as well as class action volume.
Despite this favorable defense passage, the court was still unwilling to condemn prosecutorial tactics that circumvent CAFA authority in totality. The court offhandedly noted the holding may have differed should the plaintiffs had explicitly included procedural limiting language to “pretrial” proceedings, or other trial phase levels. But overall, as a pertinent trend to watch for in 2015, any application of the Ninth Circuit expansion of CAFA language should be closely monitored by employer and manufacturer class action defense counsel, for it could mark the beginning of an encouraging Circuit tendency toward federal jurisdiction removal.
Published on April 15, 2015