Bush v. Cheaptickets, Inc.

Decision Date06 October 2005
Docket NumberNo. 05-55995.,05-55995.
Citation425 F.3d 683
PartiesRonald BUSH; Juliane Dyer; Josh Kramer; Ana Lopez; Ashley Salisbury, On Behalf of Themselves and All Others Similarly Situated, Plaintiffs-Appellees, v. CHEAPTICKETS, INC.; Cendant Corporation; Expedia Inc.; IAC/Interactivecorp; Hotels.Com, L.P.; Hotels.Com GP, LLC; Orbitz Inc.; Orbitz LLC; Priceline.Com Inc., Defendants-Appellants.
CourtU.S. Court of Appeals — Ninth Circuit

Gordon Greenberg, McDermott Will & Emery, Los Angeles, CA, for defendant-appellant.

Martha Boersch, Jones Day, San Francisco, CA, for defendant-appellant.

Darrel Hieber, Skadden, Arps, Slate, Meagher & Flom, Los Angeles, CA, for defendant-appellant.

Michael Reese, Milberg Weiss Bershad & Schulman, New York, NY, for plaintiff-appellee.

Blake Harper, Hulett Harper Stewart, San Diego, CA, for plaintiff-appellee.

Appeal from the United States District Court for the Central District of California; Percy Anderson, District Judge, Presiding. D.C. No. CV-05-02285-PA.

Before: FARRIS, THOMPSON, and JAY S. BYBEE, Circuit Judges.

BYBEE, Circuit Judge:

The question before us is when is a class-action suit "commenced" for purposes of the effective date of the Class Action Fairness Act ("CAFA," or "the Act"), Pub.L. No. 109-2, 119 Stat. 4 (2005). The plaintiffs-appellees, Ronald Bush and others ("Bush"), filed suit in state court against various internet-based travel companies ("Cheaptickets"). Cheaptickets removed the case to federal court, but the district court ordered the case remanded to state court. Bush claims that removal was not authorized because the suit was filed on the day before CAFA became effective. Cheaptickets argues that the suit was commenced when it was removed to federal court; alternatively, it argues that the action was not commenced in state court until the defendant received service of process. We reject both assertions and affirm the district court's remand of the class action to state court.

I. FACTS AND PROCEEDINGS BELOW

On February 17, 2005, Bush filed a civil class action in Superior Court, Los Angeles County, alleging that Cheaptickets had imposed illegitimate "taxes and fees" in connection with the sale of online travel and accommodations services, and that this conduct violates California's Unfair Business Practices Act and constitutes unlawful conversion. Cheaptickets responded that there are multiple lawsuits asserting similar charges and seeking nationwide class certification, that several of the named plaintiffs-appellees appear in a number of these cases, and that these plaintiff classes are represented by many of the same attorneys.

On February 18, 2005, the day after Bush filed his complaint in state court, the President signed into law the Class Action Fairness Act (CAFA), Pub.L. 109-2, 119 Stat. 4 (2005). CAFA amends, inter alia, the federal diversity statute, 28 U.S.C. § 1332, and now vests original jurisdiction for class actions in federal court where there is minimal diversity and the amount in controversy exceeds $5,000,000. 28 U.S.C. § 1332(d). By its own terms, the Act became effective for all actions that "commenced on or after" February 18, 2005. Pub.L. 109-2, § 9.

On March 28, 2005, Cheaptickets removed the class action to the United States District Court for the Central District of California, asserting jurisdiction under 28 U.S.C. § 1332(d), the new codification of CAFA's jurisdictional prerequisites. The district court remanded the action to state court on May 5, 2005, holding that a class action was "commenced" for purposes of CAFA when the original complaint was filed in state court, not when it was removed to federal court, and finding that the action commenced in state court on February 17, 2005, the day before CAFA's enactment. The remand order was entered on May 9, and Cheaptickets filed its appeal on May 16, 2005. We accepted the appeal on July 13.

II. JURISDICTION

We have jurisdiction to hear Cheaptickets' petition under 28 U.S.C. § 1453(c)(1), recently enacted as part of CAFA. Section 1453(c) provides that an appellate court "may accept an appeal from an order of a district court granting or denying a motion to remand a class action to the State court," provided that the appeal is filed "not less than 7 days" after entry of the remand order.

We have a preliminary question to resolve: whether Cheaptickets filed a timely appeal from the district court's order. The statute provides that application must be made "not less than 7 days after entry of the order." 28 U.S.C. § 1454(c)(1) (emphasis added). Literally, a party who filed an appeal "less than" seven days after the district court entered its remand order would have appealed too early. Only if the appeal is filed seven or more days after entry of the order would the appeal be "not less than" seven days. Moreover, there is apparently no upper limit on when an appeal may be taken so long as it is filed after more than seven days.

The Tenth Circuit has recently offered its opinion that the statute contains a "typographical error" and must be read to say "not more than 7 days after entry of the order." Pritchett v. Office Depot, Inc., 420 F.3d 1090, 1093 n. 2 (10th Cir.2005) ("Given Congress' stated intent to impose time limits on appeals of class action remand orders and the limited availability of appeals prior to the statute's enactment, we can think of no plausible reason why the text of the Act would instead impose a seven-day waiting period followed by a limitless window for appeal.").

Fortunately, though we note the apparent drafting error and the Tenth Circuit's analysis, we are not called upon to speculate whether it is appropriate or even permissible for this Court to correct Congress's "typographical" mistake in this case.1 Cheaptickets filed its appeal on the seventh day following the district court's remand order which is, happily for Cheaptickets, "not less than" seven days after the district court ordered the remand. Even under the Tenth Circuit's "corrected" reading of the Act, Cheaptickets filed a timely appeal because, having filed on the seventh day, it was "not more than" seven days.

Cheaptickets filed a timely appeal. We accepted the appeal on July 13, 2005, set a briefing schedule, and set oral argument for the next available panel. Unless extended, the period within which we must issue judgment would expire on September 12, 2005, four days prior to oral argument (set for September 16, 2005).2 The parties have filed a joint supplemental brief, agreeing under § 1453(c)(3)(A) to such time as the court needs to render judgment following oral arguments, and we have issued an order extending the time for judgment.

III. ANALYSIS

Cheaptickets advances two primary arguments in their petition. First, Cheaptickets asserts that the action "commenced" when it was removed to federal court. Since the action was removed in March 2005, more than a month after the enactment of CAFA, Cheaptickets contends that CAFA applies and the remand was in error. Second, Cheaptickets avers that for purposes of removal, an action is "commenced" when process is served upon a defendant; given that Cheaptickets was served with process on February 24, 2005, a week following CAFA's enactment, Cheaptickets argues that removal was timely. As we consider CAFA's requirements, we may review the construction, interpretation, or applicability of a statute de novo. United States v. Ventre, 338 F.3d 1047, 1052 (9th Cir.2003).

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." Pub.L. 109-2, § 9. CAFA broadens diversity jurisdiction for certain qualifying class actions and authorizes their removal; given its context, CAFA's "commenced" language surely refers to when the action was originally commenced in state court. It is axiomatic that an individual or entity may not remove a dispute before it has commenced in state court. The removal statute, 28 U.S.C. § 1441, is quite clear that only a "defendant" may remove the action to federal court, see Shamrock Oil & Gas Corp. v. Sheets, 313 U.S. 100, 61 S.Ct. 868, 85 L.Ed. 1214 (1941), and there is no defendant until a lawsuit has been properly initiated in state court.

A state's own laws and rules of procedure determine when a dispute may be deemed a cognizable legal action in state court. See Herb v. Pitcairn, 324 U.S. 117, 120, 65 S.Ct. 459, 89 L.Ed. 789 (1945) ("Whether any case is pending in the Illinois courts is a question to be determined by Illinois law"); Cannon v. Kroger Co., 837 F.2d 660 (4th Cir.1988) ("It is clear that a federal court must honor state court rules governing commencement of civil actions when an action is first brought in state court and then removed to federal court . . ."). In most states this occurs either when the suit is filed or when the complaint or summons is served. See Murphy Bros. v. Michetti Pipe Stringing, Inc., 526 U.S. 344, 351-52, 119 S.Ct. 1322, 143 L.Ed.2d 448 (1999) (noting that in some states, such as New York, service of the summons commences the action); Pritchett, 420 F.3d at 1094 (noting that filing commonly commences the action, but that in Connecticut the action commences by service; citing CONN. GEN. STAT. § 52-45a (2003)). In California, as in the federal courts, a suit is "commenced" upon filing. CAL. CIV. PROC. CODE § 350 ("An action is commenced, within the meaning of this Title, when the complaint is filed."); see FED. R. CIV. P. 3 ("A civil action is commenced by filing a complaint with the court."). Accordingly, under California law, Bush commenced his class-action lawsuit on February 17, 2005.

Cheaptickets would have us read "commenced" to mean "when removed." That construction makes unnecessarily complex what appears to be a very simple provision and statutory scheme. Had Congress wished to permit the removal of state suits...

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