The Seventh Circuit Court of Appeals has affirmed a trial court’s ruling that a case involving plaintiffs alleging damages from chemicals escaping from a wood-processing facility is a “mass action” that belongs in federal court. See Bullard, et al. v. Burlington Northern Sante Fe Railway, et al., 2008 WL 2941359 (7th Cir. 2008).
A state court complaint by 144 plaintiffs sought damages from four corporations that had designed, manufactured, transported, or used chemicals that allegedly escaped from a Texas wood-processing plant and purportedly injured people living nearby. Among the plaintiffs’ claims are negligence, trespass, willful and wanton conduct, and fraudulent concealment, asserting that chemicals associated with creosote used to preserve wood were released into the environment through soil, ground water, and/or air mechanisms.
Defendants removed the suit, relying on the Class Action Fairness Act of 2005. CAFA expanded federal jurisdiction over various types of class actions. CAFA’s expanded jurisdiction was not limited to pure class actions, however. It also reaches a category of cases – “mass actions” – in which monetary claims of 100 or more persons are proposed to be tried jointly on the grounds that the plaintiffs’ claims allegedly involve common questions of law or fact. See 28 U.S.C. ¶1332(d)(11)(B)(i).
Plaintiffs moved to remand. They denied that the suit was a “mass action,” noting their complaint never proposed a trial. Thus, according to plaintiffs, defendants may remove a “mass action” only when a final pretrial order or equivalent document identifies the number of parties to the trial, which is to be “joint.” The district judge denied the motion for remand, and plaintiffs obtained interlocutory review “because the legal issue is novel.”
On appeal, plaintiffs argued they are entitled to litigate in state court because the Class Action Fairness Act has a loophole. Section 1332(d)(11)(B)(i) refers to “claims of 100 or more persons … proposed to be tried jointly.” Complaints do not propose trials, plaintiffs insisted; they’d be happy to win by summary judgment or get a settlement. The case may never get to a trial. Cross that bridge when you come to it.
The Court rejected this reading. Plaintiffs’ lawyers who want to avoid federal court, the Court said, have simply designed a class-action substitute. Their complaint alleges that several questions of law and fact are common to all 144 plaintiffs; it provides no more information about each individual plaintiff than an avowed class complaint would do. No one supposes that all 144 plaintiffs will be active; a few of them will take the lead, just as in a class action, and as a practical matter counsel will dominate, just as in a class action.
If the plaintiffs’ proposed strict reading were right, then, actually, §1332(d)(11) would be defunct, because it defines a class action to include a mass action. Taken to its logical end, in plaintiffs’ view, no “mass action” could ever be a “class action”, for a suit cannot be officially identified as a “mass action” until the trial is finalized, not on the date of filing which, plaintiffs say, is the operative date. But “courts do not read statutes to make entire subsections vanish into the night,” said the Court.
A second reading would be to reject the date of filing as the only operative date and find that a case could become a “mass action” at any time. That could be long after filing, once plaintiffs are formally and explicitly proposed to be tried jointly. The prospect of this situation is why §1332(d)(11) allows the definition to be applied after the suits’ filing date. But nothing in the statute says that the eve of trial is the only time when a “mass action” can be detected.
When plaintiffs take advantage of procedural rules that permit the joinder of multiple plaintiffs in a single suit where the claims arise out of “the same transaction or series of transactions” and “common questions of law or fact” are allegedly present, that’s “exactly when a single trial is appropriate.” It does not matter whether a trial covering 100 or more plaintiffs actually ensues; the statutory question is whether one has been “proposed.” This complaint, which describes circumstances common to all plaintiffs, proposes one proceeding and thus, for statutory purposes, sufficiently alleges one trial.
And the Seventh Circuit went on to anticipate and reject plaintiffs’ next likely reaction: A proposal to hold multiple trials in a single suit, or just one trial with 10 plaintiffs and the use of preclusion to cover everyone else, does not take the suit outside the language applying to any “civil action … in which monetary relief claims of 100 or more persons are proposed to be tried jointly.” The question is not whether 100 or more plaintiffs answer a roll call in court, but whether the “claims” advanced by 100 or more persons are proposed to be tried jointly. A trial of 10 exemplary plaintiffs, followed by application of issue or claim preclusion to 134 more plaintiffs without another trial, is one in which the claims of 100 or more persons are being tried jointly, and this would bring the suit within federal jurisdiction.