Braud v. Transport Service Co. of Illinois

• Decision Date: 06 April 2006
• Docket Number: No. 06-30088.,06-30088.
• Citation: 445 F.3d 801
• Parties: Pamela BRAUD; Ibrahim Autamari; Nicole Calvin; David Jackson; Djuanna Knapper; Derryl Dunn, Sr.; Troy Lambert, Individually and on Behalf of All Others Similarly Situated; Plaintiffs-Appellees, v. TRANSPORT SERVICE COMPANY OF ILLINOIS, Defendant-Appellant.
• Court: U.S. Court of Appeals — Fifth Circuit

445 F.3d 801

Pamela BRAUD; Ibrahim Autamari; Nicole Calvin; David Jackson; Djuanna Knapper; Derryl Dunn, Sr.; Troy Lambert, Individually and on Behalf of All Others Similarly Situated; Plaintiffs-Appellees, v. TRANSPORT SERVICE COMPANY OF ILLINOIS, Defendant-Appellant.

No. 06-30088.

United States Court of Appeals, Fifth Circuit.

April 6, 2006.

John Paul Massicot, Frank A. Silvestri (argued), Damien Savoie, Silvestri & Massicot, Gonzalez, LA, for Plaintiffs-Appellees.

J. Warren Gardner, Jr. (argued), Gregory Scott LaCour, Christovich & Kearney, New Orleans, LA, for Defendant-Appellant.

Appeal from the United States District Court for the Eastern District of Louisiana.

Before SMITH, GARZA and PRADO, Circuit Judges.

JERRY E. SMITH, Circuit Judge:

This case presents an issue of first impression for this court: whether amending a complaint to add a defendant "commences" a new suit under the Class Action Fairness Act of 2005 ("CAFA"), Pub.L. 109-2, 119 Stat. 4. We answer in the affirmative and, for that reason, we reverse the district court's order of remand, and we remand to that court for further proceedings.

I.

On August 30, 2004, Pamela Braud and certain other plaintiffs (the "Braud plaintiffs") filed a "Class Action Petition for Damages" in state court. On April 8, 2005, the Braud plaintiffs amended their petition to name as an additional defendant Ineos Americas, LLC ("Ineos"), which plaintiffs contend was the owner and co-shipper of the chemical that allegedly spilled. Ineos was served with the original and supplemental class action petition on April 19, 2005.

On May 19, 2005, Ineos timely removed the action to federal court, basing removal jurisdiction on CAFA. The Braud plaintiffs are citizens of Louisiana, and Ineos is a foreign corporation authorized to do business in Louisiana.

On June 17, 2005, the Braud plaintiffs moved to remand to state court, and on July 12, 2005, they filed a purported unopposed motion to dismiss Ineos. By order entered on December 9, 2005, the district court remanded, finding that CAFA does not apply because the Braud plaintiffs had filed their initial complaint before CAFA's effective date, despite the fact that Ineos was not named as a defendant until after the effective date, which is February 18, 2005. Transport Service Company of Illinois ("Transport"), pursuant to 28 U.S.C. § 1453(c), filed on December 16, 2005, a timely application for leave to appeal,¹ which we granted on January 27, 2006.²

II.

Section 9 of CAFA provides that "[t]he amendments made by this Act shall apply to any civil action commenced on or after the date of enactment of this Act." 119 Stat. at 14. To determine whether a lawsuit was commenced on or after February 18, 2005, the district court relied on Federal Rule of Civil Procedure 3, which, as plaintiffs correctly point out, reads that "[a] civil action is commenced by filing a complaint with the court." Despite the logical of this argument, the courts of appeals that have examined the issue have unanimously held that when a lawsuit is initially "commenced" for purposes of CAFA is determined by state law.³ We agree.

As the court in Bush explained, CAFA broadens diversity jurisdiction for certain qualifying class actions and authorizes their removal, and thus, "given its context, CAFA's `commenced' language surely refers to when the action was originally commenced in state court." Bush, 425 F.3d at 688. Furthermore, when an action is commenced in state court is determined based on the state's own rules of procedure.⁴ In most states "commencement" occurs either when the suit is filed or when the complaint or summons is served, but in Connecticut the action commences by service.⁵ In Louisiana, a suit is commenced by filing of a pleading presenting the demand to a court of competent jurisdiction. LA. C.C.P. art. 421. Therefore, the Braud plaintiffs' original action commenced on August 30, 2004.

A distinct issue, however, is whether an amendment of the complaint through the addition of a new defendant "commences" a new suit for purposes of CAFA. The defendants urge us to employ the reasoning of Knudsen I, 411 F.3d at 807, and Schillinger v. Union Pac. R.R., 425 F.3d 330 (7th Cir.2005), to hold that the post-CAFA amendment of a pre-CAFA complaint by adding a new defendant "commences" a new suit. Plaintiffs respond that (1) CAFA was not meant to be retroactive; (2) Knudsen I is inapposite, and any language that may support appellants' position is "mere dicta;" (3) even applying Knudsen I's reasoning, no new suit would commence here, because the addition of Ineos "related back" to the original complaint; and (4) in any event, Ineos's dismissal after removal and before the ruling on the motion to remand ousted the court of subject matter jurisdiction.

A.

Plaintiffs' argument regarding "retroactivity" is without merit. Although CAFA is meant to apply only to suits "commenced" after the effective date, and courts apply a presumption against the retroactivity of a statute absent a plain congressional intent to the contrary, Landgraf v. USI Film Prods., 511 U.S. 244, 280, 114 S.Ct. 1483, 128 L.Ed.2d 229 (1994), the issue is not whether CAFA should apply to suits "commenced" before February 18, 2005, but whether the addition of a new defendant "commences" a new suit. That is, if under the applicable decisional law, Ineos's addition "commenced" a new suit on April 8, 2005, the removal would not be retroactive, because the suit would be considered "commenced" on or after February 18, 2005.

B.

Plaintiffs' argument that Knudsen I and the other cases cited by defendants are inapposite and provide mere "dicta" is also misplaced. Even if the statements are dicta, they are persuasive; moreover, the court in Schillinger explained that the defendants "correctly observe that in general, `a defendant added after February 18 could remove because suit against it would have been commenced after the effective date[.]'" Schillinger, 425 F.3d at 333 (quoting Schorsch v. Hewlett-Packard Co., 417 F.3d 748, 749 (7th Cir.2005)). The Schillinger court noted that this principle was inapplicable to the defendant in that case because his addition to the amended complaint was a "scrivener's error." Id.

C.

We agree with the Seventh Circuit that amendments that add a defendant "commence" the civil action as to the added party.⁶ We reach this conclusion based on two considerations, of which only the latter has been discussed by that court.

First, the district court's remark that "there's no specific language in the CAFA legislation itself . . . that would support that position that if a new party was added [post-CAFA to a pre-CAFA case then] CAFA would apply" misses the mark.⁷ Precisely because CAFA does not define "commencement" of an action, it is obvious that CAFA is not intended to replace caselaw deciding when a lawsuit is considered "commenced" as to a new defendant.

The caselaw holds that generally "a party brought into court by an amendment, and who has, for the first time, an opportunity to make defense to the action, has a right to treat the proceeding, as to him, as commenced by the process which brings him into court." United States v. Martinez, 195 U.S. 469, 473, 25 S.Ct. 80, 49 L.Ed. 282 (1904) ((citing Miller v. M'Intyre, 31 U.S. (6 Pet.) 61, 8 L.Ed. 320 (1832))). As the Miller Court explained, this is because it "would be a novel and unjust principle to make the defendants responsible for a proceeding of which they had no notice." Miller, 31 U.S. at 64.⁸ Therefore, if a defendant was added post-CAFA, the suit commences post-CAFA as to him.

Second, we agree with the Knudsen I court that the addition of a new defendant "opens a new window of removal" under 1446(b).⁹ Section 1446(b) indicates that a case that was previously non-removable can become removable when a new party is added. As explained in WRIGHT, MILLER & COOPER, supra, § 3732 at 311-48, § 1446(b) "supplements the thirty-day removal period described in the first paragraph of the provision," which covers only the period for effecting removal to federal court following the "receipt or filing" of the initial pleading.

That is, if an original complaint is not amended, removal must be determined based only on the law and facts as to removability at the time of filing or receipt of the initial pleading under § 1446(b) 1. If the complaint is amended, however, § 1446(b) 2 provides that the new defendant has a new window to remove as of the date of receipt of service of the amended complaint:

[I]f the case stated by the initial pleading is not removable, a petition for removal may be filed within thirty days after receipt by the defendant, through service or otherwise, of a copy of an amended pleading, motion, order or other paper from which it may first be ascertained that the case is one which is or has become removable.

28 U.S.C. § 1446(b). Therefore, as to the new defendant, removability is determined as of the date of receipt of service of the amended complaint, not as of the date on which the original suit was filed in state court.

Furthermore, under CAFA a new defendant may remove regardless of whether it was added more than one year after the original complaint was filed in state court. Therefore, the district court incorrectly pointed out that the addition of a new party does not commence a new suit because (as the district court improperly reasoned) Congress "give[s] you a specific time period within which you must remove or forever lose your right to remove without regard to if you happen to add a party—if the plaintiff decides to add a party a year and a half from now, your time period doesn't run again."

Instead, a new defendant can remove even if the plaintiff decided to add it more than one year after the initial suit. Therefore, there is no indication that the time when the initial suit was filed has any relevance as to when an action "commences" under CAFA for an amendment adding a...