Buller Trucking v. Owner Operator Indep. Driver

• Decision Date: 03 November 2006
• Docket Number: No. 05-CV-00165-MJR.,05-CV-00165-MJR.
• Citation: 461 F.Supp.2d 768
• Parties: BULLER TRUCKING CO., Plaintiff/Counter-Plaintiff/Counter-Defendant, v. OWNER OPERATOR INDEPENDENT DRIVER RISK RETENTION GROUP, INC., Defendant/Counterclaimant.
• Court: U.S. District Court — Southern District of Illinois

461 F.Supp.2d 768

BULLER TRUCKING CO., Plaintiff/Counter-Plaintiff/Counter-Defendant, v. OWNER OPERATOR INDEPENDENT DRIVER RISK RETENTION GROUP, INC., Defendant/Counterclaimant.

No. 05-CV-00165-MJR.

United States District Court, S.D. Illinois.

November 3, 2006.

COPYRIGHT MATERIAL OMITTED

Christopher T. Kolker, Charles Kolker Law Office, Belleville, IL, Elizabeth V. Heller, Goldenberg, Heller, et al., Edwardsville, IL, for Plaintiff/Counter-Defendant.

David A. Cohen, Randall Herrick-Stare, Cullen Law Firm, Washington, DC, Michael A. Lawder, Anderson & Gilbert, St. Louis, MO, for Defendant/Counterclaimant.

MEMORANDUM and ORDER

REAGAN, District Judge.

This matter comes before the Court on the mandate of the United States Court of Appeals for the Seventh Circuit directing the Court to determine whether federal subject matter jurisdiction is proper in this case pursuant to 28 U.S.C. § 1332, as amended by the Class Action Fairness Act of 2005, Pub.L. No. 109-2, 119 Stat. 4 (codified in scattered sections of 28 U.S.C.) ("CAFA"). The Court concludes that it is not and, therefore, this action is REMANDED to the Circuit Court of the Twentieth Judicial Circuit, St. Clair County, Illinois, for lack of subject matter jurisdiction.

INTRODUCTION

This case arises from an incident on July 29, 2003, in which the refrigeration system in a truck owned and operated by Plaintiff Buller Trucking Company ("BTC") failed, causing a $35,000 loss to the truck's perishable cargo. See Doc. 24 ¶¶ 18-23. BTC's claim on its cargo loss insurance with Defendant Owner Operator Independent Driver Risk Retention Group, Inc., ("Risk Retention Group") was denied on the grounds that the loss was due to BTC's failure to maintain an adequate supply of refrigerant in the truck's cooling system, so that the loss was excluded from coverage under the terms of a "Refrigeration Breakdown Endorsement" in BTC's cargo loss policy. See id. ¶¶ 12-13, ¶¶ 24-27. On January 7, 2004, BTC filed this action against Risk Retention Group in the St. Clair County Circuit Court, alleging breach of contract, vexatious delay in paying insurance claims, consumer fraud, and common-law fraud in connection with Risk Retention Group's refusal to pay BTC's claim on its cargo loss insurance. See Doc. 65, Ex. A. On February 7, 2005, BTC filed a motion to amend its complaint to seek certification of three nationwide classes as to BTC's claims for breach of contract, vexatious delay in paying insurance claims, and consumer fraud. See Doc. 24 ¶¶ 37-46, ¶¶ 48-76. On February 18, 2005, the effective date of CAFA, the St. Clair County court granted BTC's motion to amend. See Doc. 13, Ex. D.

On March 7, 2005, Risk Retention Group removed this case to this Court, asserting federal subject matter jurisdiction under 28 U.S.C. § 1332 as amended by CAFA. See Doc. 1. Although the case originally was assigned to United States District Judge David R. Herndon, it later was transferred to the docket of the undersigned District Judge. See Doc. 33.¹ On September 29, 2005, the Court remanded this case to state court for lack of subject matter jurisdiction. See Doc. 53. On petition for leave to appeal from the Court's order of remand pursuant to 28 U.S.C. § 1453(c), the Seventh Circuit Court of Appeals vacated the Court's remand order. See Doc. 57. The Seventh Circuit directed the Court to determine whether the St. Clair County court's action in granting BTC leave to amend its complaint to assert class-action allegations on the effective date of CAFA operated to commence this action on the effective date of the statute so as to make the case removable to federal court under CAFA. See id. Accordingly, after issuance of the Seventh Circuit's mandate, the Court directed the parties to submit briefs on the issue of whether federal subject matter jurisdiction is proper in this case under CAFA. See Doc. 58. The issue of subject matter jurisdiction under CAFA has been fully briefed by the parties, see Doc. 62; Doc. 63; Doc. 65, and the Court now is prepared to rule.

DISCUSSION

A. Legal Standard

Removal of actions from state court to federal court is governed by 28 U.S.C. § 1441, which provides that "any civil action brought in a State court of which the district courts of the United States have original jurisdiction, may be removed by the defendant or the defendants, to the district court of the United States for the district and division embracing the place where such action is pending." 28 U.S.C. § 1441(a). In other words, "[a] defendant may remove a case to federal court only if the federal district court would have original subject matter jurisdiction over the action." Disher v. Citigroup Global Mkts., Inc., 419 F.3d 649, 653 (7th Cir.2005), vacated on other grounds, ___ U.S. ___, 126 S.Ct. 2964, 165 L.Ed.2d 947 (2006). The defendant has the burden of establishing that an action is removable, and doubts concerning removal must be resolved in favor of remand to the state court. See Brill v. Countrywide Home Loans, Inc., 427 F.3d 446, 448 (7th Cir.2005); Boyd v. Phoenix Funding Corp., 366 F.3d 524, 529 (7th Cir.2004); Fiore v. First Am. Title Ins. Co., No. 05-CV-474-DRH 2005 WL 3434074, at *2 (S.D.Ill.Dec.13, 2005). Cf. Prime Care of N.E. Kan., LLC v. Blue Cross & Blue Shield of Kan. City, Civil Action No. 05-2227-KHV, 2006 WL 2734469, at *1 (D.Kan. Sept.25, 2006); Beegal v. Park W. Gallery, Civil No. 05-5625(RBK), 2006 WL 2645123, at *1-2 (D.N.J. Sept.14, 2006).

B. Diversity Jurisdiction under CAFA

Under CAFA, federal courts have jurisdiction in diversity, with exceptions not at issue here, see 28 U.S.C. § 1332(d)(3), (d)(4), (d)(5), (d)(9), over class actions with one hundred or more class members, see 28 U.S.C. § 1332(d)(5)(B), in which any member of the plaintiff class is a citizen of a state different from that of any defendant, or any member of a plaintiff class or any defendant is a foreign state or a citizen or subject of a foreign state. See 28 U.S.C. § 1332(d)(2). In a class action in which CAFA's requirement of minimal diversity is met, a federal court has jurisdiction if, after aggregating class members' claims, more than $5 million, exclusive of interest and costs, is in controversy. See 28 U.S.C. § 1332(d)(2), (d)(6). Class actions filed in state court that satisfy the jurisdictional prerequisites of CAFA are subject to removal to federal court. See 28 U.S.C. § 1453(a), (b).

"The CAFA is not retroactive and therefore only applies to class actions which are `commenced on or after the date of enactment' of the statute, February 18, 2005." Schillinger v. 360Networks USA, Inc., Civil No. 06-138-GPM, 2006 WL 1388876, at *2 (S.D.Ill. May 18, 2006) (quoting Pub.L. 109-2, § 9, 119 Stat. 4). In general a class action is commenced for purposes of removal under CAFA on the date it originally was filed in state court. See Knudsen v. Liberty Mut. Ins. Co., 411 F.3d 805, 806 (7th Cir.2005); Alsup v. 3-Day Blinds, No. Civ. 05-287-GPM, 2005 WL 2094745, at *2-3 (S.D.Ill. Aug.25, 2005). In some instances, however, an amendment to a complaint may commence (or perhaps more correctly, recommence) a class action after the effective date of CAFA so as to make the action removable under the statute. The general test of whether an amendment of a class-action complaint after the effective date of CAFA "commences" the action so as to permit removal under the statute is whether the amendment "relates back" to the filing date of the original complaint: if it does, then the case is not removable, but if it does not, the case is subject to removal under CAFA. See Knudsen, 411 F.3d at 807; Schillinger, 2006 WL 1388876, at *3; In re General Motors Corp. Dex-Cool Prods. Liab. Litig., No. CIVMDL-03-1562GPM, Civ. 05-10007-GPM., 2006 WL 644793, at *2 (S.D.Ill. Mar.9, 2006). In Knudsen the Seventh Circuit explained that "a new claim for relief (a new `cause of action' in state practice), the addition of a new defendant, or any other step sufficiently distinct that courts would treat it as independent for limitations purposes, could well commence a new piece of litigation for federal purposes even if it bears an old docket number for state purposes." 411 F.3d at 807.

In this case, as discussed, the Seventh Circuit has directed the Court to decide whether the St. Clair County court's grant of BTC's request for leave to amend its complaint to assert class-action allegations commenced this action on the effective date of CAFA so as to make the case removable under the statute. The Court finds Schillinger v. Union Pacific Railroad Co., 425 F.3d 330 (7th Cir.2005), instructive on this question. In Schillinger landowners filed a class action in 2002 against two railroad companies, Union Pacific Corporation ("UPC") and Union Pacific Railroad Company ("UPRR"), in state court. See 425 F.3d at 331-32. The plaintiffs alleged that UPC and UPRR held easements on their property and the property of the proposed class, and that the defendants had trespassed on that property and been unjustly enriched when they leased space in their easements to telecommunications companies for the installation of fiber-optic cables. See id. The case was removed to federal court, then remanded to state court, whereupon the plaintiffs voluntarily dismissed UPC from the suit. See id. at 332. In 2003 the plaintiffs requested leave to file an amended complaint that appeared once more to join UPC as a party defendant and expanded the definition of the proposed class. See id. Leave to file the amended complaint was granted in May 2005, whereupon UPC and UPRR sought removal of the case under CAFA. See id. at 332-33.

The district court held that the joinder of UPC did not commence the action after the effective date of CAFA because the record established that the joinder was inadvertent and merely the product of a drafting error by the plaintiffs' attorneys. See Schillinger, 425 F.3d at 333. On appeal, the Seventh Circuit affirmed remand:

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