Moniz v. Bayer A.G.

• Citation: 447 F.Supp.2d 31
• Decision Date: 14 August 2006
• Docket Number: Civil Action No. 06-10259-NMG.
• Parties: Shawn MONIZ, individually and on behalf of himself and all others similarly situated, Plaintiff, v. BAYER A.G. et al., Defendants.
• Court: U.S. District Court — District of Massachusetts

447 F.Supp.2d 31

Shawn MONIZ, individually and on behalf of himself and all others similarly situated, Plaintiff, v. BAYER A.G. et al., Defendants.

Civil Action No. 06-10259-NMG.

United States District Court, D. Massachusetts.

August 14, 2006.

Kenneth G. Gilman, Gilman and Pastor, LLP, Boston, MA, for Plaintiff.

Benjamin G. Bradshaw, O'Melveny & Meyers LLP, NW Washington, DC, Caryn L. Daum, Lee M. Holland, John W. Steinmetz, Robinson & Cole LLP, John D. Hanify, Jeffrey J. Upton, Hanify & King Professional Corporation, Boston, MA, for Defendants.

MEMORANDUM & ORDER

GORTON, District Judge.

On February 10, 2005, plaintiff Shawn Moniz ("Moniz"), individually and on behalf of himself and others similarly situated, filed a class action lawsuit in Middlesex Superior Court against defendants Bayer A.G. and Bayer Corporation ("Bayer"), Crompton Corporation ("Crompton") and Uniroyal Chemical Company, Inc. ("Uniroyal")(collectively "the defendants").¹ Defendants removed to this Court on February 10, 2006. Plaintiff now moves this Court to remand the case.

I. Background

The class action filed by Moniz arises from defendants' alleged conspiracy from approximately 1994 through 2004 to fix the price of certain rubber and urethane products. Plaintiff and the other members of the putative class are indirect purchasers of those products. Both Crompton and Bayer have already pled guilty and paid criminal fines following prosecution by the United States Department of Justice ("DOJ"). This action is for equitable relief for the injuries sustained by Moniz and the class that were allegedly caused by the defendants. Plaintiff estimates the class to consist of tens of thousands of persons.

On May 11, 2005, Moniz filed a First Amended Class Action Complaint ("First Amended Complaint") with the Middlesex Superior Court. On February 1, 2006, Plaintiff filed an assented-to motion for leave to file a Second Amended Class Action Complaint ("Second Amended Complaint") with the state court. That motion was allowed on February 6, 2006, and the Second Amended Complaint was filed on that same day.²

The Second Amended Complaint alleges the same conspiracy to fix prices as the original complaint. The most recent version of the complaint consists, however, of three substantive changes from prior versions of the complaint: 1) it adds a claim under Chapter 93A (the Massachusetts Consumer Protection Act), 2) it expands the kind of damages for which plaintiff seeks redress and 3) it includes a claim for relief related to an additional product (Neoprene). Plaintiff's complaint insists that no member of the class wants, nor will accept, an award in excess of $74,999 and that the suit is intentionally brought only under Massachusetts state law.

On February 10, 2006, the defendants removed the case to this Court, arguing that the Second Amended Complaint makes the case removable under the recently enacted Class Action Fairness Act, Pub.L. No. 109-2, 119 Stat. 4 (2005)("CAFA"). Defendants argue that they have satisfied the procedural requirements for removal and that this Court has subject-matter jurisdiction over the case.

On March 6, 2006, pursuant to 28 U.S.C. § 1447, plaintiff filed a motion to remand the case to the Massachusetts Superior Court for Middlesex County, which defendants oppose. On April 18, 2006, defendants filed a joint motion to dismiss Plaintiff's Second Amended Complaint for failure to state a claim upon which relief can be granted and failure to plead fraudulent concealment with particularity. Until this Court resolves the pending motion to remand, the case is in a state of suspension. Thus, having reviewed the memoranda and heard oral argument in support of and opposition to the pending motion to remand, the Court resolves it as follows.

II. Plaintiff's Motion to Remand

A. Legal Standard

"If at any time before final judgment it appears that the district court lacks subject matter jurisdiction, the case shall be remanded." 28 U.S.C. § 1447(c). The First Circuit Court of Appeals has held that the removal statute is to be strictly construed and defendants have the burden of demonstrating the existence of federal jurisdiction. Danca v. Private Health Care Sys., Inc., 185 F.3d 1, 4 (1st Cir.1999).

Defendants contend that CAFA specifically altered the burden of proof in removed cases and made it incumbent on the plaintiff to demonstrate that remand is warranted. They point to the Senate Report accompanying CAFA which states that "it is the intent of the Committee that the named plaintiff(s) should bear the burden of demonstrating that a case should be remanded to state court." S.Rep. No. 109-14, at 43. Defendants also cite Natale v. Pfizer, Inc., 379 F.Supp.2d 161 (D.Mass. 2005), in which another session of this Court held that, under CAFA, "the burden of removal is on the party opposing removal to prove that remand is appropriate." Id. at 168 (citing Berry v. American Express Publ'g Corp., 381 F.Supp.2d 1118, 1122-23 (C.D.Cal.2005)).

This argument of the defendants' is unpersuasive. First, the clear majority of courts that have addressed the issue have held that, even where CAFA applies, the burden of proof on a motion to remand remains with the removing party because the text of the statute says nothing about changing that long-standing rule. See, e.g., Brill v. Countrywide Home Loans, Inc., 427 F.3d 446, 448 (7th Cir.2005)("The rule that the proponent of federal jurisdiction bears the risk of non-persuasion has been around for a long time. To change such a rule, Congress must enact a statute [to that effect]. A declaration by 13 Senators will not serve."); Werner v. KPMG LLP, 415 F.Supp.2d 688, 695 (S.D.Tex. 2006)("The textual silence on the burden of proof, which contrasts with Congress's express provisions changing a number of aspects of removal practice ... under CAFA, leads this Court to join those holding that the party opposing remand continues to bear the burden of proving federal jurisdiction.").

Second, the Berry decision, upon which a session of this Court based its holding with respect to CAFA's burden of proof in Natale, was effectively overturned by the Ninth Circuit Court of Appeals in a decision in April, 2006. See Abrego Abrego v. Dow Chem. Co., 443 F.3d 676, 686 (9th Cir.2006)("We join [the Seventh Circuit] and hold that CAFA's silence, coupled with a sentence in a legislative committee report untethered to any statutory language, does not alter the longstanding rule that the party seeking federal jurisdiction on removal bears the burden of establishing that jurisdiction."). Thus, defendants retain the burden of establishing this Court's jurisdiction.

B. Legal Analysis

In support of the motion to remand, Moniz argues that CAFA applies only to cases commenced on or after February 18, 2005, and because this action was filed eight days before that date, it doesn't apply here. The original complaint was, however, amended subsequent to February 18, 2005. Moniz contends that 1) numerous courts have held that the amendment of a complaint is not the equivalent of "commencing" a new action under CAFA and 2) the Second Amended Complaint makes only minor changes and relates back to the original complaint, thereby precluding any applicability of CAFA.

As a preliminary matter, plaintiff obfuscates the issue when he cites several district court decisions which have held that no amendment to a complaint could invoke CAFA because a civil action may be commenced only once. Almost every court that has reviewed cases similar to the one at bar has applied relation-back analysis in the context of CAFA commencement issues. See, e.g., Schorsch v. Hewlett-Packard Co., 417 F.3d 748, 749 (7th Cir.2005). The cases cited by Moniz were all published by district courts located in the Eighth Circuit which has recently concluded that an amended pleading can commence a new action for purposes of CAFA if it does not relate back. See Plubell v. Merck & Co., 434 F.3d 1070, 1071-72 (8th Cir.2006). This Court, as do the clear majority of courts that have faced similar CAFA commencement issues, will apply relation-back analysis to the facts of this case.

Defendants argue that plaintiff's Second Amended Complaint does not relate back to the original complaint and, therefore, constitutes a new action for the purposes of CAFA. Specifically, defendants argue that Moniz changed the claim in the Second Amended Complaint in several ways that effectively converted it into a "new" action under CAFA. Thus, for the purposes of resolving the motion to remand, the critical inquiry for this Court is whether the "amended pleadings so change the claims or parties as to be a new civil action, rather than a `workaday change' that continues a pending action." Werner, 415 F.Supp.2d at 700.

While it remains an open question whether the relation-back analysis under CAFA should be conducted pursuant to state or federal law, see id. at 701, it ultimately makes little difference in this case because the language of Fed.R.Civ.P. 15(c)(2) mirrors the language of Massachusetts Rule of Civil Procedure 15(c). That rule states that an amended pleading relates back to an original complaint only if

the claim or defense asserted in the amended pleading arose out of the conduct, transaction, or occurrence set forth or attempted to be set forth in the original pleading....

Mass. R. Civ. P. 15(c). The Supreme Judicial Court has interpreted Massachusetts Rule 15(c) to mean that an original complaint must provide a defendant with sufficient notice of the misconduct alleged against it in the amended complaint in order for relation-back to be appropriate. See Weber v. Cmty. Teamwork, Inc., 434 Mass. 761, 784-85, 752 N.E.2d 700 (2001)(stating that plaintiff's original complaint, which brought an unlawful termination claim, made "no mention of any retaliatory behavior or retaliation claim ... and afforded the defendants no notice that they would be required to defend...